The Talent Dilemma: A Result or a Trend
Through my career in Human Capital Management one of the most prominent concerns that I have heard expressed from senior organizational leaders is a growing lack of talented staffing options. This comes out in a variety of fields. From functional working areas of oil and gas, to the middle and upper management in finance the request is the same. “Where can I find the top tier talent that I need to move the needle in my organization?” The answer is the focus of this article.
My belief is that the talent pool of the past is just as available as it has always been. I do not believe that we have experienced a significant reduction of skilled workers. I believe that the environment and skill sets have changed but the core work ethic has not. Work ethic still exists today, but as a result of the environment we exist in we are seeing the greatest departure of hard workers from the traditional workforce that we have ever seen. We are also seeing a significant shift in the environmental expectations of the new workforce. Every day I am told of a quality professionals exiting the corporate work force and how there is not anyone to replace them. As I review organizational structures weekly I find that while I am not inclined to admit it the quality of professionals in the workforce seems to be lacking. So why is this the case? Why has the workforce seen a reduction in quality talent available in well-established organizations?
The Great Awakening
The great awakening started some time during Gen X joining the workforce and the evolution continued through Gen Y and into the new to the game Gen 20/20. This great awakening as I refer to it was the realization to the workforce that there is life outside of the workday and while the incremental increase in pay and gradual improvement in social status had its benefits the workforce began to recognize that the companies were in a symbiotic working relationship with the employees and that they had a voice.
This realization led to a significant shift in the expectations in the mind of the employee. No longer were they willing to sit in an organization and survive. They decided that to wait their turn was not the plan for the future. When we look at a simple statistic like average job tenure in a vacuum we see that things are changing. The average job tenure of a Baby Boomer was 7 years. Generation X saw this drop to 5 Years. Generation Y or the Millennials saw another drop to 2 years. And finally the Generation Z or Gen 20/20 is dropping even lower. This shift in loyalty to the corporate entity is leading to this misconception that there is a decline in the quality of the workforce. What has shifted is not the knowledge or ability of the generation or even the number of them in the workforce. In fact 63% of Millennials have a college degree. What has changed is the expectations of the environment they work in on a daily basis. Here are the statistics that validate this perspective.
Gen X employees:
• Gen X ranked workplace flexibility as the most important perk (21%) and are more likely to walk away from a job if flexibility isn’t available.
• 40% are working in the career they intended when they entered the workforce. Almost a quarter have been with the same employer for fifteen years or longer.
• 74% of Gen Xers agreed with this statement “hard work is the key to getting ahead.”
• 70% prefer to work independently.
• 66% of Gen X women, and 55% of Gen X men want flexible work arrangements.
Gen Y/ Millennial employees:
• By next year, millennials will account for 36% of the U.S. workforce and by 2025, they will account for 75% of the global workplace.
• 41% of millennials do what their managers tell them to do, which is greater than older generations.
• 84% say that helping to make a positive difference in the world is more important than professional recognition.
• Millennials say they do not deserve special treatment and are equally as committed as non-Millennials.
• Millennial employees have about the same level of organizational commitment as boomers and Gen Xers.
• 29% of Millennials workers think work meetings to decide on a course of action are very efficient. Compared to 45% of Boomers
• 80% of Gen Y said they prefer on-the-spot recognition over formal reviews, and feel that this is imperative for their growth and understanding of a job.
• 70% have “friended” their managers and/or co-workers on Facebook.
• 71% don’t always obey social media policies at work.
• Connected to an average of 16 co-workers on Facebook
• It costs an average of $24,000 to replace each Gen Y employee.
• 15% of Gen Y’s are already managers.
• 56% of Gen Y’s won’t work at a company if they ban social media access.
• 69% believe office attendance is unnecessary on a regular basis.
Generation Z or Gen 20/20 employees:
• Gen Z respondents say they prefer in-person communications with managers (51%), as opposed to emailing (16%) or instant messaging (11%).
• 17% of Gen Z wants to start a business and hire others.
• 34% are most motivated by opportunities for advancement, followed by more money (27%) and meaningful work (23%).
• Gen Z expects to work for an average of four companies throughout their lifetimes
• 52% of Gen Z state that honesty is the most important quality for being a good leader.
• 41% want to work at midsize organizations as the ideal work environment, followed by large organizations (38%).
• 28% said balancing work and personal obligations was the top future career concern, followed by making enough money (26%) and finding a stable job (23%).
• 32% believe they will be managing employees within the next 5 years.
• 45% cited potential challenges working with baby boomers, compared to 17% who anticipate difficulties with Gen X and 5% with millennials.
• 60% want to have an impact on the world with their jobs (compared to 39% of millennials).
• 89% say they spend part of their free time in activities they consider productive and creative instead of just “hanging out”.
• Gen Zs are more likely to have worked on a craft than Gen Ys at that age (42% vs. 25%).
What we can gleam from this information is that the future of business talent is looking for more than just a job. They are looking to partner with an organization and if we as business owners want the opportunity to hire the brightest and the best we need to create a culture that connects with the people we want working for us. We are doing no one any favors by providing them with a job. We need to open ourselves up and partner together to grow our organizations and have an impact on the world around us (I know, written like the Gen X/Y crossover that I am).
The Entrepreneurial Shift
The second and equally significant shift involves an area that is near and dear to my heart. This shift is the move out of the world of mid-sized and corporations into the Entrepreneurial sector.
The failure of corporations to focus on societal impact and the ongoing infringements on the lifestyles of their employees despite the evolution in technology combine with the rapidly changing environment of the nation have led to a migration toward entrepreneurship. I want to remind you this is not only the youngest of the work force. Gen X is 34-50 years old, Gen Y is 20-33 years old, and Gen Z is currently between age 5 and 21. This is the future of the workforce and if organizations do not embrace the required change the future of the biggest and best of corporate America are in serious trouble. That is not to say that we will not have another generation of great companies leading the charge in our economy. Just look at the entrepreneurial statistics below:
Generation X as entrepreneurs:
• 41% of Gen Xers consider themselves entrepreneurs.
• 40% of Gen Xers identify themselves as being “high risk”.
• 40% of Gen X men and 25% of Gen X women reported that they want to eventually become entrepreneurs.
• 37% had an early entrepreneur role model in their family.
• 39% of Gen X men and 28% of Gen X women aspire to be an entrepreneur.
Generation Y as entrepreneurs:
• 35% of employed Millennials have started their own business on the side to supplement their income.
• 90% say being an entrepreneur is a mindset instead of the role of a business owner
• 46% of Gen Y wants to start a business in the next 5 years.
• 54% either want to start a business or already have started one.
• More than a quarter (27%) are already self-employed
Gen Z’s as entrepreneurs
• 72% of Gen Z wants to start a business someday.
• 61% of Gen Z would rather be an entrepreneur instead of an employee when they graduate college.
• 62% would rather start their own companies than work for one.
• 58% have shown interest in developing skills tied to how to start a business.
• 71% expect to experience significant failure before achieving success, and nearly 40% say they see failure as an opportunity to try again.
• 76% wish their hobby would turn into a full-time job compared to 50% of millennials.
• 42% plan to start their own businesses and 3% currently run their own business.
• 38% say they will invest something that changes the world.
Based on the statistics and the conversations I have with clients I can only come to one conclusion. The talent dilemma is not a lack of talent, it is a failure on the part of organization to create an organizational culture that attracts and keeps the best of this generation. So is this a trend or a result? The answer is both. There is a growing trend away from corporate loyalty and toward entrepreneurship. There is also a significant failure on the part of companies to adopt organizational change practices in order to adapt their cultures and keep current with the workforce expectations.
So what is next? What do we do as business owners?
The answer is simple, it is time for change. We can lead the change or have change forced upon us. By leading change and being aware of what is coming we can position ourselves to capitalize on the opportunity that it presents.