As young, technology-savvy workers spring into executive positions, many more workers enter the autumn of their careers. Corporate executives can expect to have their managerial timber tested by demographic shifts that change the makeup of the workforce.

The U.S. workforce is entering a difficult age. Twenty-something executives have begun to wrest management positions from their skeptical predecessors. According to a recent Dun & Bradstreet report, 14 percent of today’s top executives are in their twenties or thirties. However, even though seniority, experience and gray hair are no longer requirements for leadership and advancement, the historical transfer of power and responsibility from older workers to younger employees has, in many companies, hit a dead end. The population-heavy baby boomer generation dominates the workforce, and 80 percent of these workers expect to continue their careers past traditional retirement age. As a result, typical manager-employee relationships are in turmoil. (See Typical on-the-Job Clashes)

Amid the uneasy generational mix, the continuing worker shortage is forcing executives to boost employee retention and recruit with a vengeance. The recruiting spotlight is currently aimed at technology-savvy younger workers, but the U.S. Census Bureau reports that by 2003, for the first time ever, more workers will be over 40 than under 40. Steven G. Vernon, vice president, consulting actuary, at Watson Wyatt Worldwide in Los Angeles, states, "We are predicting that with the economy so strong, there is going to be a worker shortage. Companies are going to need workers of all ages. We are forecasting a lot of interest in different kinds of working arrangements. This is going on now at the local level in companies. Local personnel managers are trying to make ends meet, and they are making deals with people who are retired. This is just the tip of the iceberg."

Finance professionals face a number of dilemmas in managing a cross-generational staff. Many older workers resent supervisors and mentors who are the same age as their children. And after patiently and diligently pursuing career advancement for decades, experienced employees aren’t thrilled at the prospect of competing with fast-track kids. At the same time, younger workers resent high-paid senior executives who are entrenched in old-world economics and management systems. Intergenerational clashes reduce productivity and can have an enormous influence on absenteeism and employee retention. These conflicts can also boost the number of age-discrimination lawsuits employees file. If the generations don’t learn to get along, they will hurt employers’ bottom line.

Ron Zemke, author of "Generations at Work: Managing the Clash of Veterans, Boomers, Xers, and Nexters in Your Workplace" (Amacom, 1999), says, "At no previous time in our history have so many and such different generations with such diversity been asked to work together shoulder to shoulder, side by side, cubicle to cubicle." Zemke, president of Performance Research Associates Inc. in Minneapolis, adds, "If you pay attention to the mix and use it to your advantage, you get a richer pool of ideas and a better mixing of talents and a lot more creativity. If you don’t pay attention, what you get is turnover and conflict and backbiting and all kinds of unhealthy competition."

Profiles of the Generational Groups

Zemke and his co-authors Claire Raines and Bob Filipczak divide the current workforce into four generational groups:

  • The Veterans: born 1922 to 1943; the generation includes 52 million people. These workers lived through World War II and the Korean War, and some survived the Great Depression. They are staunch supporters of family values. They believe in hard work and dedication. Although they hold about 75 percent of all financial assets in the United States, veterans tend to be conservative and risk-averse with money. They grew up in an era when the roles of men and women were distinct: Men went to work, and women reared the children.

    Comfortable with the old command-and-control style of leadership, veterans may find it difficult to speak out and express opinions that conflict with the views of senior management. Job hopping runs contrary to their mind-set; they are loyal to their employers. Because computers were not a part of their formative years, they are sometimes stereotyped as technophobes. However, when properly trained, the veterans adapt well to computer technology, in part because they are detail-oriented and disciplined.

  • The Baby Boomers: born 1943 to 1960; the generation includes 73.2 million people. The baby boomers grew up with economic prosperity at a time when children’s needs and wants were center-stage. They have been criticized as being pampered and self-centered, but they are also credited with having a strong commitment to personal relationships and with being goal- and results-oriented. Currently, the boomers account for 53 percent of all workers, and they will dominate the workforce for at least the next 15 years.

    Boomers like team work; this was the first generation to have "works well with others" on grade-school report cards. However, their individualistic nature and need to prove themselves can wreak havoc on team efforts. In the workplace they are optimistic, service-oriented and willing to do whatever it takes to get the job done. Yet they are somewhat uncomfortable with conflict, can put process ahead of results and are overly sensitive to criticism.

  • The Gen Xers: born 1960 to 1980; the generation includes 70.1 million people. They grew up in the shadow of the boomers and at first were considered slackers because they seemed to lack the drive and initiative of their predecessors. The Xers are the latchkey kids who grew up in two-income families. They watched their stressed-out parents work long hours and learned how to be self-reliant at an early age. They are skeptical about rules and authority, and want to find a balance between their work lives and their personal lives.

    As a whole they are technologically brilliant, adaptable, informal and globally oriented. According to Zemke, "Those born in the second half got in on the beginning of the technological explosion. They are the first high-tech graduates whom businesses did bidding wars around." Yet the Xers can be too cynical and impatient, and they tend to lack people skills.

    Of the four generations, the two most likely to clash are the baby boomers and the gen Xers. According to Zemke, boomer managers are often unnerved when Xer job candidates initiate conversations about perks and hiring bonuses and ask questions such as "Why should I work for you?" Zemke says, "Remember that the veterans taught the boomers not to talk about money at work. Boomers would rather tell you about their sex lives than about their checking accounts. Xers are just the opposite. Boomers want to talk about cooperation and collaboration — let’s all get together and sing ‘Kumbaya.’ Xers want to know ‘What’s the career path around here?’ " In addition, the huge number of boomers is clogging whatever upward mobility is left in flattened organizations, and the Xers wish the boomers would step aside and free up some space.

  • The Nexters: born 1980 through the present; the generation includes 69.7 million people, to date. This group is just beginning to enter the workforce, so the jury is still out on how they will fit in. Zemke observes, "The significant events that form the core of your values don’t really get into place until you are really on your own — in your 20s." Nonetheless, research has shown the nexters to be hard-working, optimistic and confident; they have a strong sense of civic duty and are more tolerant of racial, gender and ethnic differences than any other generational group. Reared by soccer moms and Little League dads, they like and respect their parents and seem to have a strong moral code. In fact, the generational group the nexters seem to have the most affinity with is the veterans.

    Are the nexters a dream come true for employers? They were born into homes that already had computers, learned teamwork in school and are achievement-oriented. In addition, Zemke says, "They have an amazing capacity for multitasking. They know how to do more in less time." However, the nexters are used to getting what they want and can be very demanding. In addition, some pundits say they are naive and may need supervision, structure and mentoring. Their workplace attitudes will, of course, be shaped by the job market that awaits them. Whether the economy will support their idealistic career expectations remains to be seen.

The birth years Zemke attributes to some of these groups differ from those used by demographers. For example, his baby boomers are born between 1943 and 1960; others define that generation’s span as people born between 1946 and 1964. Zemke’s groupings are designed to reflect similarities of values, attitudes and experiences. The commonalities cut across racial, ethnic and economic differences.

However, the descriptions are not chiseled in concrete. As Zemke puts it, "To say that gen Xers are more attuned to rock climbing and extreme sports than veterans doesn’t preclude the possibility of avidly rappelling grandmas. It does suggest, however, that aside from the passion for climbing inclines, the veteran grandma will have fewer attitudes and experiences in common with the gen Xer than would another gen Xer."

Mixing the Generations: A Case in Point

Steve Buege, vice president of technical services for West Group, a worldwide supplier of legal books and online materials in St. Paul, Minn., manages 400 people in seven departments. The great majority of his employees are baby boomers and gen Xers. According to Buege, the corporate culture of West Group (formerly West Publishing) began changing in the mid-1980s, when the company’s technical areas grew, causing an increase in the hiring of gen Xers. Then in 1996 the company was acquired by The Thomson Corp., an organization with its own legal-publishing business. Buege says, "The culture that Thomson brought was quite different than the culture at West Publishing. In addition, because of the acquisition, a large tier of West’s senior executives left the business. So again the demographics changed fundamentally."

Regarding managing across generations, Buege says, "To a great extent you have to deal with people as individuals. However, we emphasize teamwork and collaboration and open communication — all the way up to the early recruiting and interview process. If you can’t successfully work on a small team and develop strong relationships, then that is going to limit what kinds of roles and responsibilities you get. Part of how you are going to be evaluated is on the success of the team. We set those expectations early on." Recruiting and management efforts are helped, he says, by the fact that "we place a big value on diversity." Apparently, the blending of generations at West Group is working. Buege reports that turnover is so low that the company cut recruiting costs by two-thirds in the past year.

How does West Group avert clashes between older and younger workers? Buege says, "New, young entrants into the company — those who have been heavily courted and well-compensated — may be met with some cynicism from long-time employees. But that evaporates once they see the skills these people bring, because they have been working with technology for so long. And it works the other way, too. The younger people know the technology; nothing intimidates them. But what they don’t know is the business — the business model, your applications and how you make money, your value proposition. There is a lot they need to learn, and they draw upon the more senior people. When the groups help each other, that cynicism erodes. It takes time; it’s not a first week kind of thing."

Cross-Generational Management

A cross section of the generational groups — Zemke, a veteran; Vernon, a baby boomer; and Buege, a gen Xer — provide the following suggestions for managing employees of all ages:

1. Recruit and manage with attitudes in mind. According to Zemke, veterans want to hear that age and experience are assets, not liabilities. They want to know about the company’s long-term goals and strategies, and how they can fit in. Baby boomers want the challenge of solving problems, and they want to know how they can make a difference, how they can stand out and be recognized. Gen Xers want to know that they will be evaluated on merit instead of seniority, that they won’t be asked to sacrifice their personal lives for their work lives and that they won’t be micromanaged. Nexters like the idea of working in teams. They want to join companies that are on the cutting edge of new technologies and that will provide them with continuing educational and learning opportunities.

2. Treat everyone as a peer. Effective management across generations means putting age and status in the background. Buege says, "When I’m dealing with people on a one-on-one basis, what I want from them isn’t just the facts and the statistics. I want their judgments and opinions. You need to make people comfortable so they can be honest and open."

3. Recognize the value and necessity of older workers. Vernon states, "A lot of attention has been paid to the younger workers, those coming out of school with technical skills. But that’s not all that is needed in the workforce. In most situations you need people who have lots of experience, particularly in the managing of companies. When work was really physical, people burned out in their 40s and 50s, and that’s a leftover attitude that a lot of people still have. However, people can keep working into their 60s and 70s and still be very productive. That gap between the leftover attitude and reality will need to be addressed as we start having worker shortages."

4. Praise the team, but don’t forget the star performers. Regardless of their age, employees need to be recognized for outstanding contributions. Buege asserts, "Playing the team game doesn’t replace or relieve you of the responsibility to recognize your star performers. Not everyone on a team always pulls equal weight on a project. You need to say to the star performer, ‘I recognize and appreciate what you did. Maybe I can’t run around and wave the flag for you as publicly as I can for the team, but understand that I see your contribution.’ That works wonders with high performers."

5. Be flexible, and accommodate employee differences. This can be a painstaking process because what pleases one group may alienate another group. Gen Xers might want casual Fridays all year long, but the veterans may deem that policy unprofessional. Zemke says, "You need to set dress standards so that people who like to wear ties are just as comfortable as people who like to wear chinos. The whole idea of casual dress, if it’s got 27 rules, defeats the whole purpose of accommodation."

6. Manage around career advancement and opportunities. All generational groups respond positively when they feel their work contributes to the company and to their personal lives. Buege says, "You need to quickly demonstrate that you value and reward initiative. The minute employees see that, it’s reassuring and motivating." Zemke adds, "Broaden assignments. If I’m on a team and my real function is to write brochure copy, let me sit in on the meetings about the advertising strategy as well. You’ll get the advantage of my opinion and give me a broader piece of the project to feel ownership over and involvement in."

The Big Picture

The four generational groups span nearly 80 birth years. Finance professionals can view that as a management nightmare or as a rich mix of talent and ability that they can tap to increase profit and growth. Blending the generations in a business environment where no job is secure and no career is assured is a formidable challenge that usually rests squarely on the shoulders of individual managers. Underlying all the policies, learning opportunities and motivational techniques executives can use to deal with intergenerational conflicts are the issues of trust and inclusion. Zemke asks, "Are you clear and forthright with employees? Do you keep your promises? Are you seen as being fair? Are you inclusive, and do you listen to everyone’s ideas and take them into account? When you finally decide on a course of action, do you explain why you picked one way over another? People know that mergers happen and whole departments go away — that it’s a business necessity. They know that in the classical sense you can’t trust the company. The company is bricks and mortar. But they need to know that they can trust in the boss, in the individual manager."