Gen Y get their skates on

An Australian 'Generation Y' expert says New Zealand employers pay poorly for the skills of well-educated Generation Y employees and need to do more to develop leadership talent in their organisations.

"New Zealand employers feed the [overseas exodus] problem by not investing in Generation Y because they think they will leave to go overseas," says Peter Sheahan.

Sheahan, a "talent specialist", has written four books on Generation Y (people age between 12 and 28), delivered more than 1500 seminars and presentations; and counts CBA, Westpac, IAG, the Royal Australian Air Force and the Victoria Department of Justice as clients.

Just 26, Sheahan brims with the confidence, intelligence and impatience - stereotypical of the well-educated of that generation. He says New Zealand employers who choose to ignore generational differences will quickly find they can't afford to.

"The law of supply and demand gives Generation Y the option to leave a job whenever they want to and be sure of getting another one," says Sheahan.

He's not alone in that opinion. Paul Stevenson, principal consultant for Grafton Consulting Group, says Generation Y is expected to call the employment shots for some time.

"Some have goals like 'I will be a CEO by the time I am 35'," says Stevenson.

Stevenson says employers will win if they concentrate on what young people really want and improve their people management skills accordingly. While new technologies ease the labour pressure on employers, there will continue to be strong demand for Generation Y employees and this is exacerbated by the fact the well-educated Generation Y workforce is smaller than the overall Generation Y population, says Stevenson.

He says: "There is a considerable part of Generation Y that for a range of social reasons has missed the education boat."

This observation is backed up by New Zealand statistics that show people in their early 20s have roughly double the unemployment rate of the overall working population at around 7.9 per cent. As such, employers need to be more committed to on-the-job training and development of individuals, says Stevenson.

Sheahan is well researched, rattling off studies and statistics pertaining to Generation Y and backing these up with an impressive number of anecdotes. After building a career out of conversations with Gen-Yers (he has a database of 7000) and employers of all generations, Sheahan know what he knows: attracting and retaining Generation Y employees is difficult and employers are worried about it.

"Generation Y is characterised as difficult to attract, hard to manage and harder to retain. They want jobs with purpose and meaning now; big challenges now; promotion and responsibility now. No wonder figuring out how to get the best out of them is high on the agenda of most employers," says Sheahan.

Stevenson agrees well-educated Generation Y candidates aren't available in the New Zealand workforce in high enough numbers. According to local statistics, at least a fifth wants to work overseas and that percentage is higher for the tertiary educated. Meanwhile Generation X and Baby Boomer employees want lighter workloads as they head into parenting and retirement.

Employers anxious to maintain a fully-resourced and competitive workforce are asking recruitment specialists and HR managers to develop specific recruitment and retention strategies to attract Generation Y candidates and keep them.

"Managers haven't really stepped up to deal with generational differences, yet they have become business critical. Today, you can't just put an ad in paper and get someone else when someone leaves," says Stevenson.

One Auckland consultancy recently gave a 24-year old employee a pay rise of $15,000 after just 18 months of employment in the hope of staving off the inevitable 'OE'; Stevenson says chances are high that employees will dither for a while then take the OE anyway.

"Most of the time more money works in the short term but not in the long term. The personal reasons the employee has for wanting to go remain, the [new] salary gets eaten away and the individual thinks 'I've made a mistake'," says Stevenson.

He says smart employers maintain contact with former employees on an OE and use a larger salary as a post-OE carrot in the hope the employee will return to the organisation.

"Employers can say 'here are a couple of contacts that might help you overseas; this is where we will be at as a company when you come back; when you do we can talk about a significant increase in salary on your return'. The goal is always to maintain the relationship," says Stevenson.

Sheahan is also hot on relationships and says employers with top people managers and a people-sensitive culture have more success retaining Generation Y than those who use only generational profiles to develop blanket retention strategies.

He says: "To segment people into 15 years blocks through generational research is a flawed model, although employers would be equally crazy to ignore it. They need to build a culture that genuinely connects people one-on-one. Too many employers have a habit of promoting highly technically competent people into management positions rather than those with people management skills."

Interestingly, Sheahan says anecdotal research suggests Baby Boomer managers develop a closer rapport with Generation Y employees than Generation X managers. The theory behind this is that Baby Boomers are the parents of Generation Y and so both generations are somewhat familiar with each other. Generation X on the other hand (people age between 28 and 40) think Generation Y employees are self-indulgent and need a good slap.

"Generation X employees aren't that much older but faced economic crises and unemployment and 'did it hard'. I wouldn't be so harsh as to say 'get over it' but Generation X really needs to. I encourage Generation X managers to focus on what's useful for the business and that's attracting talent and retaining it for a longer period of time," says Sheahan.

Stevenson says it's fair to say Generation Y can be somewhat categorised, but there is an area of grey between Generation X and Y employers need to be careful of - widespread assumptions about what each generation wants will be less accurate the closer the individual is to the 'blend years' between the generations.

"Instead the employer's employment brand should be: 'here is an organisation that develops people; that understands the differences between people, and that listens and communicates in a way people of all generations understand'," says Stevenson.

How to keep Gen-Y on board

* Are managers tolerant of younger generations? Are they prepared to support them in a way that they may have not been supported themselves; are they good communicators and team-building?

* Is the interaction managers have with Generation Y employees relevant, personalised and entertaining?

* Don't under-estimate the need to develop a Gen Y- friendly culture now. Last year around 56,000 new employees entered the NZ workforce; two fifths of these were immigrants.

* Generation Y abhors a rigid 40-hour, Monday to Friday work week. If more fluid hours are not offered, freelancing or entrepreneurship will become more attractive careers.


Reader comment:

The writer is eloquent about the risk employers may run by not rewarding Generation Y adequately. I have no doubt that many readers agreed. She does not seem aware that Generation X and the Baby Boomers before them (of which I am at the tail end) have had to face the same poor rewards system.

In my experience, the groups most affected, across the generations, are tertiary educated science and professional workers. Ironically, these are the very people successive governments have told us are so valuable to the New Zealand economy and of whom there should be more to help build our economy. If they cannot find employment, even with comparatively ungenerous remuneration, they will leave, perhaps never to return.

To build our economy we also need business of the sort that employ these expensively educated people and an economic environment which supports these businesses. I fear that free trade agreements, with China, for example, will not provide nor support such an environment.

Finally, among my co-workers and friends there seems to be an increase in those of the opinion that New Zealand has a first world facade on a third world economy. The above points certainly do not disuade me from this perception. But I do not believe the rot has penetrated to the core yet. There is some hope.

Perhaps these are areas Vicki Bland could explore in future articles.
- - - posted July 5, 2006 by Colin