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Younger management, older workers and how companies can adapt


By Neil Amato and Sabine Vollmer

As the face of management gets younger around the world, a shift is underway in how supervisors interact with their direct reports.

Older workers are staying on the job longer, meaning the manager accustomed to overseeing only younger employees is having to adjust. The needs of the workers in Generation Y, Generation X and the Baby Boomers are different.

That’s according to a survey by EY, which compared the generational strengths and preferred workplace perks of three age groups. In the US survey, Generation Y is those 18 to 32 years old; Generation X, those 33 to 48; and Baby Boomers, 49 to 67. The older workers are taking on fewer management roles and have different needs than a 25-year-old does.

Dealing with a greying workforce is a global concern. Workers staying on the job into their mid- to late 60s mean more costs for companies and, often, lower productivity, research has shown. Employees are delaying retirement because they stay in good physical and mental health longer as life expectancy increases, because of poor investment results and, in some cases, because their adult offspring are unemployed and need continued parental support.

In the UK, the number of workers age 65 and older has doubled in the past decade to about a million, according to labour data from the Office for National Statistics. The population of elderly UK residents is projected to double to 20 million by 2050 and the pension age is moving up to 68.

Other countries in Europe and North America mirror the aging population trend in the UK.

So managers are dealing with more multigenerational teams, a concern for 75% of management respondents in the EY survey. The leading challenges for managing across generations were different work expectations (77%) and a lack of comfort with younger employees managing older ones (72%).

Different skills and different priorities contribute to that discomfort. Overall, the most important factor in retaining employees is pay (49%), followed by benefits such as health care and retirement (22%) and day-to-day work flexibility (18%).

Generationally, there is a difference in views on benefits, for example. They are the most important perk, outside of salary, for Boomers (29%), compared with 19% for Gen X and 17% for Gen Y.

Flexibility is a priority for Gen X first, followed by Gen Y and then Boomers. The middle age group seeks this out most because they are the ones raising children.

From 2008 to 2013, 87% of Gen Y managers moved into that role, compared with 38% of Gen X managers and 19% of Boomer managers. In the survey, the generational mix of those moving into management from 2003 to 2008 was 23% Boomers, 30% Gen X and 12% Gen Y.

Gen X managers were seen as best-equipped to manage current economic conditions (80%), just ahead of Boomers (76%) and well ahead of Gen Y (27%). Gen X is still the preferred generation to manage in 2020 (65%), according to the survey, but Gen Y (51%) is far ahead of the Boomers (27%).

“As management shifts to younger generations, the research reveals areas companies can focus on to enhance skill sets, address the challenges of managing multiple generations, and retain and engage employees by understanding which workplace perks they may value most,” Karyn Twaronite, the EY Americas Inclusiveness Officer and a partner of Ernst & Young LLP, said in a news release. “While it’s encouraging that millennials are expected to significantly grow their managerial skills by 2020, the onus is on companies to also give them equitable opportunities to gain the right mentors, sponsors, career experiences and training to capitalise on this optimism.”

So how does a company equip a manager to engage workers with such wide-ranging needs? Towers Watson, a global professional services company, offers three tips for managing multigenerational teams:

  • Use older workers, who are reliable and knowledgeable resources, as mentors for younger employees. Use younger workers to train older workers on social media and technology.
  • Offer support that goes beyond workplace management, such as employee assistance programmes, and takes differing needs of different age groups into account, including the needs of those 65 and older.
  • Allow employees who are about to make important professional decisions to take extended time off in the form of, for example, sabbaticals.

Related CGMA Magazine content:

Older Workers, More Cost for Companies in Developed Regions”: Older workers are staying longer in jobs, resulting in top-heavy companies whose per-employee cost in Europe has risen 16% since 2009. Productivity is down, and younger workers are having a tougher time finding work, according to a PwC report.

Five Likely Threats That Should Keep Global Leaders up at Night”: Threats that keep top experts and high-level leaders up at night are the risks that are beyond any one company or even one nation to handle, including a greying workforce. A report from the 2013 World Economic Forum lists the most likely ones with the biggest damage potential.

Study Finds Early Warning Signs for a Looming Global Talent Imbalance”: Companies are overhauling their business strategies to adjust to the rise of emerging markets, research shows. But demographic trends will add new challenges over the next five to ten years, specifically in talent management.

Neil Amato (namato@aicpa.org) and Sabine Vollmer (svollmer@aicpa.org) are CGMA Magazine senior editors.