Businesses Must Adapt to Multigenerational Workforce

Plan on working past the age of 65? You won't be alone. The U.S. Bureau of Labor Statistics predicts that by 2020, 22.6 percent of Americans over 65 will be working. That's more than double the rate in 1985, when just 10.8 percent of the 65-plus crowd were still at work.

People are living and working longer, and as a result, it's now possible to have an unprecedented five generations in the workplace simultaneously: veterans/traditionalists, baby boomers, Gen Xers, millennials/Generation Y and the next generation. And their values and traits are very different. For instance, in a 2013 Ernst & Young study of 1,200 professionals across a variety of ages and industries, 78 percent believed millennials were tech-savvy, as opposed to 18 percent for Gen Xers and 4 percent for boomers. As for cost-effectiveness, the order was the inverse: 59 percent for boomers, 34 percent for Gen Xers and 7 percent for millennials. For these generations to work together effectively and harmoniously, business culture must change.

Shifting demographics

But that's not the only seismic demographic shift underway. For decades, the birth rate has been falling, which means that future workforce growth will decline precipitously: from over 10 percent per decade in the U.S. to slightly over 2 percent, according to the Bureau of Labor Statistics. Young, educated workers are going to be increasingly scarce, and we — China, Brazil and Russia are experiencing the same population phenomena — are going to need additional labor sources such as those older generations.

Other new realities

Other trends dictate organizational evolution. Unless you've just emerged from a cave after a 20-year hibernation, you realize we're living in the New Economy, one based on technology, not manufacturing. That economy is all about computers, the Internet, data and high-tech tools: We not only use high-tech tools to make and market high-tech tools, but we like to tell those makers and marketers of high-tech tools what we think of them using our high-tech tools. Today's customers aren't content to be sold a service or product. Customers want to be co-creators, says Cognizant, a company that provides customer-information services, consulting and business-process outsourcing worldwide. "So instead of thinking how you can accommodate … think about how you can engage them."

Success depends on innovation

What does this mean for your workplace? It means there's a lot of work to do. According to a paper authored by Tamara J. Erickson (an award-winning author and speaker on the changing workforce), Mark Livingston, James Livingston and Stephen Clarke, "most organizations are ill-prepared because they are structured to respond to a very different set of business conditions than the ones they face today." In the past, business success was predicated on the ability "to make, market and/or deliver large volumes of goods at low cost and consistent quality." Today's companies still must do that. But they also must "attract and develop employees with both the skills and the desire to adapt the business to rapidly changing customer demands via innovation."

Traits of a future-ready organization

Companies can start by offering their employees:

• Collaborative environment: Simply put, collaboration must come to define your business and your workforce. Today's economy is fast-paced, constantly evolving and knowledge-based. Its technology-savvy customers demand around-the-clock interactivity with you. The global nature of commerce means diverse, far-flung workforces, partnerships, markets and dependencies. Companies and employees that cannot connect, communicate, learn and adapt won't succeed.
• Flexibility: Companies will be tapping into every available labor pool, including older, part-time, contract and home-based employees. With technologies such as email, videoconferencing, shared online documents and more, employees don't have to be lumped together on-site to work effectively.
• Engagement: With ever-fiercer competition for top talent and the reality of a multigenerational workforce, employers must win over its people and foster a great work home. Much has been made of young workers' expectations for meritocracy, advancement and work-life balance, but Google HR chief Laszlo Bock argues that the only thing different about millennials is that they're demanding what everybody's always wanted.
• Education: If you can't find the kind of employees you want, you may have to train the kind of employees you want — an investment that's also great for recruitment and retention. Moreover, writes collaboration and social media expert and Forbes contributor Rawn Shah, companies should implement internal "social learning" to share critical knowledge and processes and learn to be innovators.

To improve your 21st-century skills, investigate the continuing education programs at the state's universities, community colleges and Regents Online. If you're not sure how long to work, discuss your goals with a financial planner.

Phoebe Venable, chartered financial analyst, is president & COO of CapWealth Advisors LLC. Her column on women, families and building wealth appears each Saturday in The Tennessean.