Companies are rightly focused on attracting and retaining young talent who are part of the so-called Millennial Generation or Generation Y. We have talked about it here.
However, recent research shows that Generation X, which generally refers to those individuals born from the early 1960s to the early 1980s, now make up the bulk of companies' key employees and require attention too. This is particularly true as companies emerge from the recession and further into recovery.
According to the PwC Saratoga 2011/2012 US Human Capital Effectiveness Report, Generation X employees now outnumber Millennials by five to one and are increasingly filling the senior ranks as the Baby Boomers retire.
In many ways, Generation X, at one time referred to as the Baby Bust generation because of their much smaller numbers compared to the Baby Boomers, has been overlooked in favor of Millennials just as it was overlooked by the much larger Baby Boomers. However, companies that overlook the needs of Generation X do so at their peril.
The PwC Saratoga report focuses on the need to continue to adapt the workplace to Generation X values, including freedom and responsibility in the workplace, a dislike of micro-management, a casual attitude toward authority, and a focus on a better work/life balance.
As we talked about in this post, companies need to make sure their employee value proposition is still working and relevant to employees. Now that Generation X has assumed a dominant position in the workforce and the Millennials continue to enter the workforce, having a flexible value proposition is crucial. For example, when it comes to offering non-financial benefits, the report notes that Generation X tends to respond positively to fitness centers, on-site clinics, and coaching services, as well as other programs that help to improve work/life balance.
The need to focus on key employee retention is becoming more pressing as the economy recovers and employee mobility increases. The PwC Saratoga report noted that, "As the economic situation improves and the artificially low turnover rates revert to normal levels, the time is right for HR to develop solid employee retention plans."
Although the turnover rate within the first year after hire declined significantly during the recession from 31.7% in 2007 to 22.7% in 2010, the PwC Saratoga report predicts much of that improvement could be lost by 2013 with first-year turnover potentially reaching 28% unless companies make sustained structural improvements to talent acquisition processes.
More daunting is the fact that turnover for key segments, including high performers, is also increasing. For example, the high performer turnover rate declined from 4.8% in 2007 to 3.7% in 2009 then increased again to 4.3% in 2010. This indicates that high performers were once again finding new opportunities, a trend that is only likely to increase as the economy recovers more fully.
The full report is available online here.