The ‘Z’ factor
Henrik Bresman and Vinika Rao, INSEAD, talk about how workplace dynamics will evolve when three generations function together.
Today’s organizations are already in the process of onboarding Gen Z who are going to make up about 20% of the workforce by 2020. For the first time, three distinct generations working simultaneously. What does this signify for employers?
The future of work and the dynamics of the workplace are changing constantly—are employers ready? Technological advances ensure that the physical aspects of work environments will be far removed from what we see in offices or home work stations today. But there is another change, less obvious but no less impactful—the dynamics introduced by a multigenerational workforce. Much has been written about the impact millennials have had on the workplace. Now, as Gen Z prepares to make up about 20% of the workforce by 2020, more upheavals are to be expected.
For the first time in human history, we will have three distinct generations—X, Y, and Z—working together. Increased life expectancy and advanced medical care are postponing retirement and keeping older workers in the
workplace for longer periods. On the other end, young people are starting businesses and becoming employers and bosses, sometimes even while they are studying.
Techpreneurs have changed everything, even the way venture capitalists evaluate business plans for potential funding. In fact, these days, they do not even ask for business plans. Develop a rough prototype of the planned product, do a pilot release, demonstrate results—and the first tranche of venture funds may be allotted. Change is happening at breakneck speed, across the business ecosystem. And the traditional constructs of work, office, employers, and employees are all being summarily deconstructed.
The INSEAD Emerging Markets Institute, Universum, the HEAD Foundation, and the MIT Leadership Centre conducted a survey recently of over 18,000 students and professionals from nineteen countries, covering these three most recent generations: Gen X (born between 1965 to 1983), Gen Y (born between 1984 to 1996), and Gen Z (born between 1997 to 2002).
In an earlier global survey in 2014, we looked exclusively at millennials. Commonly held perceptions about them were busted and new trends revealed, especially related to their career decisions, leadership behavior, and work styles. With this second iteration of the collaboration, we broadened the scope of analysis to also include Gen X, which has wielded influence over the workplace for some two decades, and Gen Z which is poised to take up jobs and reshape the future of work in its own unique way.
The countries covered included both developed and emerging economies.
Sandwiched between the baby boomers and the millennials, Gen X-ers have taken up positions of power in multinational C-suites as well as in the ranks of successful entrepreneurs. They experienced childhood without computers and witnessed the shift from analogue to digital technology in their adulthood. At work, they are taking over the mantle from the baby boomers and mentoring Gen Y. At home, they are caring for their boomer parents on one hand, and their millennial children on the other, who often do not seem ready to leave home.
millennials, generation me, the Peter Pan generation, the boomerang generation
New labels are still being coined for this most visible generation. Gen Y-ers have forced a new look at everything. Growing up with unprecedented access to technology, they have used it to bring about massive changes in the workplace. Commonly perceived to seek work-life balance, frequent career advancement, and constant feedback, while being socially conscious, open minded, and eager to make a difference, they are also seen as delaying the common adulthood markers like marriage, moving out of parental homes, and starting careers.
Gen Z-ers were born into a VUCA world and that is the environment they are used to. They fear for the future of the planet, value their education, worry about their future careers, and want to make the world a better place. They are the quintessential digital natives—quite helpless in a non-digital world.
What are the implications for the employer or HR manager who is trying to attract, manage, and develop these distinct groups—should they develop three different sets of policies for them or find a way to integrate them optimally?
There is also the question of whether the three generations really have a permanently different outlook, or is this just about age. Are we overthinking the generational pivots? Are Gen Y and Gen Z truly different from Gen
X in their expectations and preferences at the workplace? Or, will they begin to behave much like their older peers
as they grow older and gain experience at work? There are undoubtedly some differences that are about age and experience. However, our research did reveal that not all the differences can be explained away in this fashion— some are generational and will not go away with age.
Let us consider an example of each. Our survey showed that in terms of their outlook towards the future of their work, there is a clear generational divide with one generation feeling increasingly hopeful and another increasingly fearful. Gen Y is more optimistic in their expectations regarding their future careers and work than Gen X, across the geographies surveyed.
On the other hand, one difference that is probably related to age and may go away with experience is that Gen Z seems to be less concerned about flexible work locations and timings than the older generations. There is a good chance this may just be because they take a certain amount of flexibility for granted, treating it as a given rather than a perk. Having never experienced what it feels like to be desk bound from 9 to 5, they probably cannot visualize such a scenario, so this difference may go away with experience as they actually start work.
main insights from the survey:
■ “I won’t get a job that matches my personality”— this fear of not finding their ‘fit’ is particularly great among younger people who have not yet entered the workforce. Almost 53% of Gen Z chose this as their most significant job-related fear. lesson to employers: A company that is able to articulate its vision, culture, and values clearly and convincingly will have an easier time attracting and retaining top talent.
“I’ll get stuck, not be able to realize my career goals”— more than half of Gen Y professionals and 47% of Gen X professionals cited this fear of stalling without development opportunities. lesson to employers: Developing appropriate training and leadership development opportunities, particularly for younger workers is important. Consider both the content and the mode of delivery. The assumption that younger workers prefer online training is not true. The survey showed that all three generations prefer in-person training. In fact, Gen X is more likely to opt for online training than Gen Y or Z— possibly because of the perceived efficiency of this mode in terms of fitting in with their busy work calendars.
women’s concerns at work
Women’s fears about their professional lives vary significantly, both by country and generation. The geographical diversity is more than for their male counterparts. for women in India: ‘No one will listen to me’ was the most commonly cited fear. They also feared mixing up their personal and professional lives in a way that their male colleagues just do not seem to worry about. lesson to employers: Blanket initiatives for ‘women in the workplace’ have little utility. If your organization launches women-targeted initiatives that vary little country by country, they are probably not having the desired effect. Most companies tend to at least regionalize their gender diversity efforts, but the survey shows important differences within regions too. For instance, women in India face different challenges and have varying expectations from the workplace as compared to those in China or Singapore. Cultural values, social norms, state of economic development, availability of child care, family support for child rearing—all play a part in defining how women feel about their future in the workforce.
work for yourself or for someone else
The startup mindset is here to stay with all three generations and will have an important impact on the modern workforce. Almost 25% of students and 33% of working professionals surveyed expressed a powerful interest in starting their own business. Others want to work for startups. Rapidly evolving tech platforms are making remote, flexible, and freelance work more viable and cost effective. Business innovation today is coming more from start-small techpreneurs from all over the world than from established MNCs. Little wonder then that they are losing their cache as employers of choice. lessons to employers: Harnessing entrepreneurial energy or the best talent does not necessarily mean you must hire it. Employers must think more broadly about how to engage talent. Optimizing the gig economy, contracting work out, increasing flexible work options—especially when it comes to the much-required digital talent, these options will work better than the traditional hiring of fulltime employees.
Each generation brings different expectations to the workplace—hopes and fears regarding how their jobs will be defined, how their career paths will evolve, how they will lead and be led, and increasingly, what role technology will play in their work lives. Employers and leaders who understand these expectations and work towards meeting them will have the edge in attracting and retaining the best from each group. ■
Gen Y-ers are also seen as delaying the common adulthood markers like marriage, moving out of parental homes, and starting careers.
Gen Y is more optimistic in their expectations regarding their future careers and work than Gen X.
The assumption that younger workers prefer online training is not true. The survey showed that all three generations prefer in-person training.