When does each generation begin and end

Better collaboration across generations

How do you manage a workforce that spans different generations and has different needs, experiences, views and ways of working?

The labor market is currently shaped by different generations. So-called “digital natives”, who had a Facebook profile before they started their first job, and older service semesters who can still remember when fax machines and floppy disks were the latest technology, now work together as colleagues. This has led to a number of clichés about the employees of the different generations and about their differences - the consequence is firmly entrenched and often obstructive stereotypes.

In order to do away with these, Peakon took a closer look at the views and attitudes of each individual generation and the different ways in which they experience the work. When an awareness arises, organizations can better respond to the needs of the individual and increase the satisfaction of their employees.

Define generations and understand prejudices

Before we get into the analysis, we must first deal with the definition of the individual generations. When one generation ends and the next begins is often a matter of interpretation and is widely discussed. For this investigation, we chose to use the Pew Research Center definition.

At 18 years of age, the baby boomer generation covers the longest period - from 1946 to 1964. Then comes Generation X and describes the subsequent period from 15 years to around 1980. The millennial generation (also known as Generation Y), which will soon represent the largest cohort on the labor market, lies between the years 1981 and 1996.

The generation of traditionalists (“Silent” in the graphic above) are hardly represented in today's job market and Generation Z has so far only been isolated. For this reason, we have significantly less data available on these two groupings than on the other generations. For any analysis, it is much better to examine groups of similar size. Because of this, we decided to focus on the three groups with the largest data sets: Baby Boomers, Generation X, and Millennials.

Allow for data corruption

Before we go into detail about the different experiences of these generations at work and their attitudes towards work and draw conclusions from the data, we should first consider which factors could influence our conclusions. For example, some generations may be more represented than others in certain industries.

With millennials being more involved in tech than other generations, our conclusions about millennials may be due to the influence of tech. Baby boomers, on the other hand, have most likely been with the organization for a long time and our conclusions may therefore reflect their leadership experience rather than general attitudes of their generation.

Fortunately, these factors can be modeled, quantified, and factored in. We did that in our analysis by applying the True Benchmark® to really get to the bottom of the differences between the generations and not to let other factors distort the picture. If you want to learn more about how demographic factors like age, seniority, region department, etc. affect employee engagement, take a look at our True Benchmark® calculator.

01. The baby boomer generation has the greatest employee engagement

The differences in employee engagement between the different generations is possibly the most interesting object of investigation in this study. Employees with a high level of commitment identify more strongly with their job and are willing to give 150% of their own accord. They are also more likely to stay with the company longer, reducing employee turnover and hiring costs.

The most common way to measure employee engagement is with the Employee Net Promoter Score, or eNPS. The approach is based on the NPS®, which was developed by Bain & Company and is now used by hundreds of companies around the world to measure customer satisfaction and loyalty. The engagement score is calculated based on the answer to the following question:

"How likely is it that you would recommend [company name] as an employer?"

("How likely is it you would recommend [Company Name] as a place to work?")

The question works because it encourages respondents to consider all aspects of their job at the same time - from corporate culture to work environment to career prospects.

In addition, a recommendation represents a certain identification. Just as with the recommendation of a brand or a product, the recommendation of the employer shows that the employee identifies himself with his work on a deeper, personal level.

Our data shows that employees of all generations have similar levels of employee engagement in the early stages of their employment. In the first three months - the so-called honeymoon phase - the engagement values ​​tend to be significantly higher than at any other point in time of employment. This effect was corrected in our analysis and the expected above-average engagement value was adjusted to an average "expected engagement value".

This expected engagement value gives us a starting point for what responses to expect from an employee in a particular industry, age, gender, seniority, and location. On this basis, we can then estimate how, for example, the commitment value of an employee in Germany would differ in her first year of employment in the healthcare sector, depending on whether she belongs to the Millennials, Generation X or Baby Boomers.

During the onboarding phase, the baby boomers show lower engagement values ​​than their younger colleagues. This suggests that they are less likely to be swayed by the excitement of a new job. When the effect of the onboarding phase wears off, the generational differences in employee engagement levels become more apparent. The baby boomer generation is then shown to be the cohort that has the highest employee engagement after three years, followed by Generation X and Millennials. The latter consistently have the lowest engagement values.

This tendency becomes even clearer when one looks at the direct consequences of employee engagement: satisfaction and loyalty.

Question: "If you were offered the same job at another company, how likely would it be that you would stay with [company name]?"

("If you were offered the same job at a different company, how likely is it that you would stay with [company name]?")

After three years, baby boomers are 0.5 points higher (on a scale of 0-10) in terms of their intention to stay with the organization. Most likely this is related to their higher engagement scores and the fact that they are closer to retirement and don't want to change jobs again.

Question: "Overall, how satisfied are you with your work at [company name]?"

("Overall, how satisfied are you working for [company name]?")

The generational differences become particularly evident when employees are asked about their job satisfaction. After two years, the baby boomers show significantly higher levels of satisfaction than their younger colleagues. After five years, this difference is greatest with a deviation of 0.7.

By engaging in scientific research on the subject, several reasons can be deduced as to why these intergenerational differences exist. On the one hand, baby boomers are more experienced and have a higher sense of professional competence than their younger counterparts. According to Deci and Ryan's 1985 self-determination theory, a sense of competence is one of the three basic psychological needs that drive our motivation. When we feel ourselves capable of doing a task, our motivation for doing it and the satisfaction we get from it increase.

The expectations of the older generation are also different. With increasing competition for the best talent, employers and their HR departments focus on creating a positive employee experience for their employees. When the baby boomers came on the job, it wasn't like that. While millennials expect to have greater flexibility in terms of home office arrangements or better additional offers, baby boomers still remember times when this was by no means the norm. Therefore, they value these bonuses and freedoms more and feel more valued by their employer as a result. This in turn is reflected in higher engagement values.

02. Baby boomers believe most strongly in the organization's strategy

Research shows that belief in corporate strategy is one of the factors with the greatest impact on employee engagement. It is therefore not surprising that the older generation of employees, who, as already mentioned, show higher employee engagement, believe more in corporate strategy and goals than Generation X or Millennials.

Question: "The general business goals and strategies of the top management lead [company name] in the right direction."

("The overall goals and strategies set by senior leadership are taking [company name] in the right direction.")

From the first year of employment, the baby boomer generation scores 0.5 points higher (on a scale of 0-10) than millennials. A 2013 study by Carpenter and Gong for the Institute for the Study of Labor also found that employees who believe in the organization's mission are 72% more productive than their counterparts who don't.

The disparity between the generations in this case could be due to work experience. With more work experience, workers have a better understanding of how companies work - and better access to information. The more experienced generation is likely to have a better understanding of strategic management decisions and will be able to see progress toward long-term goals. Your younger colleagues still lack the experience for this.

The cause may also be found in the company's communication of the strategy to the teams. Communication channels must be used that appeal to all generations. When communication goes beyond traditional channels and takes place regularly - which baby boomers are not used to - decisions made by corporate management are better understood by the younger generations.

Question: "I am inspired by our company's mission and mission."

Millennials are often described as a generation driven by passion and purpose. Interestingly, however, they themselves state that they are less inspired by the company's mission and goals than their colleagues. This is worrying if the assumption is correct that this is a great motivator for them. In this case, they would lack a source of motivation that is of particular importance to them.

03. Millennials see less point in their work

In surveys, millennials indicate that they see significantly less sense in their work than both baby boomers and Generation X. This is in line with the survey results that they are less inspired by the company's goals and mission. Here you can learn more about what is especially important for millennials in their work life.

Question: "The work I do makes sense."

Meaningful work is a topic that science has already dealt with in many works. Special mention should be made of Hackman and Oldham and their Job Characteristics Model (1975) and William Kahn's study of the psychological conditions for employee engagement (1990). Both research papers highlight that employees need to understand the value and impact of their own work in order to properly identify with their tasks and demonstrate high employee engagement.

The background is simply that we all appreciate it and let it motivate us to make a contribution. This brings the individual to fully immerse themselves in their work.

For this feeling to arise, employees must have the impression of being able to use their very individual skills and observe how they are making a contribution to something bigger - this can be their team, the organization or even society as a whole.

Question: "At work I have the opportunity to use my strengths every day."

In their search for meaning, the younger workers feel that they are less able to use their skills compared to the older generations. Since they are still at the beginning of their careers, millennials may not have found the job that suits them best. They may also lack the belief that their individual abilities are making a unique and important contribution to the organization.

Question: "I make something in my team."

Interestingly, if you take a closer look at how each generation perceives their own contribution to the team, you can see that they hardly differ from each other. Neither the millennials, nor the Generation X, or the baby boomers are more satisfied with their influence on their own team.

This implies that the lack of meaning for millennials is less due to a lack of influence at the micro level, but more at the macro level in the organization or society. This gives them the feeling that they cannot use their personal interests or skills profitably for something greater.

04. Millennials are the most dissatisfied with their salary

As mentioned above, existing stereotypes of different generations suggest that millennial workers are more motivated by experience and purpose than by financial rewards. However, our data clearly show that this generation is the least satisfied with its salary compared to that of its older colleagues. Of all engagement factors, the generation gap is greatest when it comes to remuneration.

Question: "I am fairly rewarded for my services at [company name] (e.g. through remuneration, promotion, further training)."

According to behavioral psychologist John Stacy Adams, the key to employee satisfaction lies in fainess. In 1963, Adams introduced the principle of equality of justice (Equity Theory). It states that employees want to receive fair compensation that reflects their efforts on the one hand and what their colleagues receive on the other. For example, an employee may be absolutely satisfied with his or her salary of € 25,000 - until he or she learns that a colleague with the same responsibility gets double that.

If we look at millennial remuneration in a broader context, it can be seen that they are less satisfied with it than the baby boomers or Generation X.

As a generation, US millennials face $ 1 trillion in student loans (4th quarter 2018, Federal Reserve & New York Federal Reserve) and have to deal with a real estate market that is 1000% worth compared to the 1960s. Overall, millennials have significantly less financial security than their parents of the baby boomer generation.

While employers cannot be expected to adjust salaries to reflect property prices and student loan costs, they still need to ensure that salaries are sufficient to live on. As the organizational psychologist Fredrick Herzberg pointed out, excessive remuneration above a certain threshold is no longer motivating - however, insufficient remuneration will undoubtedly undermine employee motivation.

If sufficient salaries are given, employers should look at the other points of this research to better understand employee engagement and their own options for action. It's not just about motivating and satisfying millennials, but rather getting all generations in the workforce on board. You can do this by providing meaningful work, communicating corporate strategy better, and giving everyone in the organization the opportunity to do what they do best.

Understand the cross-generational workforce

The aim of this study was to better understand the different experiences of different generations in the workplace. This is the basis for responding to their needs and aligning the workplace with them so that each generation can reach their full potential.

Our data collection has revealed some interesting intergenerational differences. In summary, it can be said that the baby boomer generation has a higher level of employee engagement, greater loyalty to the organization, and higher levels of satisfaction with remuneration and corporate strategy than their younger colleagues. According to the US Bureau of Labor Statistics, workers over 65 are the fastest growing demographic cohort in the labor market. For this reason, the value of this group should not be underestimated.

In contrast, millennial generation workers were also found to have lower ratings on all aspects of their daily work. In 2017, millennials became the largest demographic group in the US labor market (source: Pew Research Center). As the number of employees in this group grows, it becomes critical for companies to understand and respond to their needs. Some aspects, such as financial incentives, can hardly be avoided. The good news for companies is: Other aspects, like improving communication or increasing focus on corporate strategy, will also have a positive impact on employee engagement and loyalty.