Other parts of this series:
The changing tide of the 21st century workforce is shining a light on a new type of diversity required in the workplace.
It has long been estimated that the aging workforce, or Baby Boomers (those born in the years between 1946 and 1964) in particular, would generate a mass exodus from the workplace, leaving many challenges for employers in terms of recruiting employees to take their place.
In fact, in the United States, the Baby Boomer generation was previously the largest population in the workplace, topping out at 45% as of 2005 and 38% in 2010, while the Millennial generation grew from 25% in 2005 to 36% in 2010. As of 2015, Millennials jumped to 45%, while Baby Boomers dropped to 31%.
Although the exit of older employees isn’t as large in numbers as first predicted, these workers are still leaving the workforce at pace. While there is a lot of focus on recruiting and retaining Millennials, it’s also important that older workers be encouraged to stay engaged because they bring a unique set of skills, experience, value and diversity to the table.
The departure of these workers presents two key challenges:
1. Preserving legacy knowledge. One of the most important tasks in this transition is ensuring that legacy knowledge is passed on. Without a plan that allows this transfer to take place or these skills to be retained in another form, companies risk losing vital information. Forward-looking organisations can create pathways for flexible work schedules so those who are transitioning out of the company can still have meaningful ways of contributing to the transfer of knowledge. For instance, older workers could be engaged as part-time employees or freelance consultants. Companies will need to put a process in place that ensures information is not only captured and secured but properly stored and constantly updated. This accumulated knowledge should then be incorporated into at point-of-need, easily-digestible training format for the younger workforce.
2. Retaining older workers who want to continue making a contribution. The AARP study A Business Case for Workers Age 50+: A look at the Value of Experience 2015 indicates 35% of American workers will be 50 or older by the year 2022. The study also reveals that this demographic is more engaged than any other generation in the workforce, due to their deep experience, knowledge and work ethic. Many workers in this age category want to stay in their jobs as long as possible, not only for financial reasons but also so they can continue to make contributions and be involved in meaningful social interactions that come from being part of the work environment.
What does this all mean for the financial services sector?
Only 7% of Millennials graduating from college in the United States in 2016 indicate an interest in banking and capital markets as a career, and only 3% are interested in working in the insurance industry. Therefore, it is vital to know how to successfully recruit Millennials into the financial services industry as well as how to retain and make the most of the contributing older working generation.
It’s also important to remember that Millennials aren’t sold on working for large organizations. Many are interested in joining Fintechs and start-ups, which will even further impact the changing multi-generational workforce.
For example, Accenture’s Strategy 2016 German University Graduates Study found that only one in four (27 percent) of university graduates want to work for a large company because many feel at risk of becoming lost within the inflexible work experiences and more rigid career paths of a larger organisation. Similarly, just 24 percent of the UK 2016 university graduates we surveyed say the same. Therefore, catering to personalized needs and career-specific expectations will increasingly play a large role in today’s Millennial recruitment to ensure they don’t feel undervalued and underemployed.
In my next post, I’ll take a look at the realities of the aging workforce in the financial services sector.
For more on how business is being disrupted by Millennials, read: Workforce of the Future: Dealing with Business Change and the Millennial Change.