For years, employers have been told to build organisations that meet the demands of generation Y. Has the rise in youth unemployment shifted the balance of power?
Alistair Darling's forecast of a British recovery by the end of this year may have offered him and his neighbour a small glimmer of hope. But when the Office for National Statistics (ONS) released its last set of unemployment figures, it provided a grim reminder of how the recession has been affecting the UK. With just over 2.4 million people unemployed, the jobless rate was 7.8 per cent. And while it's true that all workers—veterans, baby boomers, generation X and generation Y—are finding the environment tough, it's young people who are taking a particularly painful hit.
The ONS data shows unemployment among under-25s has risen from 700,000 in February 2008 to 928,000 in June. In research by the Chartered Institute of Personnel and Development (CIPD) just one in six employers said they intend to recruit someone aged 16-18. In August, BT and Corus joined other major employers suspending or drastically scaling back their graduate recruitment schemes. For school leavers and university graduates, there's little to smile about.
How things change. Until this year, generation Y—those born between 1980 and 2000—had experienced a long period of economic growth. They felt they had the world at their feet. They'd grown up being told to express their opinions and challenge the status quo. They were raised in homes that were liberal, democratic and super-supportive. As business was booming, full and varied employment opportunities for these confident upstarts were there for the taking, along with good wages. And companies fell over themselves to offer generation Y the flexible working environment they demanded.
Now, says Claire McCartney, resourcing and talent planning adviser at the CIPD, this is the generation most likely to lose their jobs. The psychological contract has turned in favour of organisations, she says. "It's tougher for the generation Ys already within organisations. It will be about fitting in and suiting the needs of the business and doing all you can. Along with other employees, these people will really be feeling the pinch."
How HR directors and business leaders react to generation Y's reversal of fortune will have long-term implications. Employers can use it to their advantage. There's a glut of freshly educated talent out there who can't afford to be picky. They're likely to take whatever work is on offer. But now is not the time to start bashing generation Y. Much as some managers might like to tell them what they can do with their demands, there's a good reason why organisations have been courting these "millennials" and learning how to manage them. It would be harmful to alienate them now.
Bruce Tulgan has been conducting in-depth interviews with young people in the workplace since 1993. The founder of US management training firm RainmakerThinking and author of Not Everyone Gets a Trophy: How to manage generation Y, freely admits that while generation Y is likely to be the most high-performing workforce we've ever seen, it is also the most high-maintenance. "Precisely because generation Y seems to both disregard authority figures and at the same time demand a great deal of them, leaders and managers often find them maddening and difficult to manage," he says. He lists some common complaints: they're unwilling to commit to their employer; they have short attentions spans; they need work to be fun; they don't respect their elders; and they are too self-focused.
So why would you want to recruit from this generation, especially during a recession, when the job market appears to have swung in your favour? Because you can't afford not to have that talent, says McCartney. In previous recessions, she says, organisations have put graduate recruitment schemes on hold to their detriment. What happens post-recession when there's no generation Y employees to tap into their peer network for your advantage, to put their technological savvy to good use, or to suggest dynamic ways of getting into new markets? "I think there has been a knee-jerk reaction among some businesses. But most are up to speed about generation Y. They're aware that they bring different perspectives, experiences, ideas, and creativity. It's good to have a diverse workforce, full of different generations," says McCartney.
Sally Bibb agrees. A director of consultancy TalentSmoothie and author of The Rookies Guide to Generation Y, Bibb has been working with organisations including Sony, ITV and The National Trust on why managing generation Y is challenging, but worth the effort. And these clients are listening closely, she says: "Forward-thinking companies are still trying to engage them. It's dangerous to say 'we'll put them back in their box, they'll have to toe the line now', because it's not going to happen." Each generation has its own experience, knowledge and skills and you've got to find ways of using all of those. "They've got different attitudes to us, and you don't change people's attitudes."
Bibb can quickly pull together a whole list of reasons why generation Y employees are a crucial component of the workforce. But she points to two in particular. Generation Y, she claims, is a manifestation of the massive changes that have happened in technology. As "natives" of the highly connected digital world, generation Y has an inherent and natural understanding of it. The rest of us (with the exception of the even younger generation Z, of course) are "immigrants". It is therefore generation Y employees, she says, who will help organisations to adapt to change, and keep them relevant. "It's true that some organisations/managers believe that now there is a recession they can pay less attention to generation Y and the issues surrounding it," she says. "My experience is that smart organisations are thinking medium- to long-term and are not prepared to make the same mistakes that some made before."
Most organisations are likely to have generation Y consumers, or want to attract them. "This is a really important point," says Bibb. "We are advising organisations to use their generation Y employees to help them understand and respond to the needs of generation Y consumers and customers." Without understanding how they tick, your marketing and selling techniques are likely to be way off target. "Directors need to understand generation Y's preferences, values and behaviours if they are to attract the right talent and appeal to the younger generation of consumers," she says.
Tulgan adds that these are the employees of the future. Even though the labour market has some slack in it right now, generation Y is still the emerging workforce. So rather than get frustrated about its attitude—"there's always a hope that the young upstarts will at some point grow up, settle down and start acting like the generation that preceded them, but every generation has its own attitude and behaviours"—he suggests taking comfort in some of the positives.
By employing and learning how to manage generation Y employees effectively you are, in essence, making yourself more attractive, reasons Tulgan. By making sure your managers are highly engaged and collaborative, workers of all ages will be attracted to your organisation. And who can honestly say they want to work in an organisational hierarchy with rigid structures anyway? "These approaches to managing are much more appropriate in an environment in which long-term employment is becoming the exception rather than the rule for all ages," he says. "My view is that generation Y employees are just an indicator. People of all ages are thinking more like free agents these days."
And if there's one silver lining to this recession, it's that it's made generation Y think a little more carefully about the workplace and their place in it. They understand that it's tough out there. Employers can use that to their advantage.
"There's a growing appreciation [among generation Y] that it's not all about me," says Tulgan. "They're a little more concerned about fitting in rather than sticking out. There's a greater sense of the employee side of the workplace quid pro quo. 'Here's what I can do', rather than 'this is what I want'."
In practice, Tulgan suggests, the smart ones will focus on good self-management, being prompt, and taking on more tasks and responsibilities. "They're realising that their energy, creativity, enthusiasm, technical ability, and drive for innovation might not be enough at the moment. They think, 'this might be a good time to take notes, say please and thank you, try to be a good workplace citizen and volunteer for some grunt work'."
And it's worth remembering that before long, generations X and Y will become the dominant players in the workforce, with generation Z snapping at their heels and bringing their own revolution to bear. This recession won't last forever. The companies that come out of it with a competitive advantage will be those that have employed the best talent and worked out how to get the most out of their multi-generational workforce while meeting their demands.
Tulgan spells it out: "The best way for business leaders to increase productivity, quality and cost-effectiveness will be to customise work conditions, requirements and rewards for employees, one person at a time. And leaders and managers will come to accept this new environment."
