As Canada’s baby boomers retire or cling to the top of the career ladder, the youngest workers are moving up faster than those in mid-career, a new survey has found.
“With older workers staying on longer – many in senior positions – and younger employees with a hunger for advancement coming up from below, the potential for disaffection in Generation X ranks is significant,” concludes the study by PricewaterhouseCoopers.
Boomers are making up less of the Canadian work force than they used to and, to some surprise, it is the Gen Ys who are benefiting more than the so-called “quiet majority” of Gen X workers, says the report.
The study was prepared for the banking industry, but the circumstances parallel what is happening in other industries, said Philip Hunter, a director in PwC’s consulting practice.
The study found promotion rates for members of Generation Y – those born between 1982 and 2000 – have held steady at close to 20 per cent over the three years from 2008 through 2010, while boomers’ promotion rates fell from 5 per cent to 3 per cent. Unexpectedly, promotions of the group dubbed Gen X –born between 1961 and 1981 – fell from 11 per cent to less than 10 per cent.
This was a surprising finding, “because this should be peak years of upward mobility,” Dr. Hunter said.
In addition to being squeezed in the middle, Gen Xers may also be affected by changes in corporate structure that puts more emphasis on relationship skills and less on management expertise to reach more senior levels, Dr. Hunter said.
The upward mobility also appears to have increased retention of younger employees.
Voluntary turnover among Gen Ys between 2006 and 2010 declined from 25 per cent to 16 per cent, which can be attributed in part to the economic volatility over the period, but could also be the result of companies shaping work environments to better suit younger employees, Dr. Hunter said.
The survey’s findings are particularly significant for Canadian banks, in which Gen X is by far the largest generational group, comprising up to 60 per cent of the work force, said Karen Forward, a vice-president in PwC’s financial services advisory practice.
“Banks need to be asking questions such as, ‘How does each generation contribute to our organization across our lines of services and corporate functions?’ and ‘Are we helping the different generations to work together?’” Ms. Forward said.
Companies “need to look at collaboration tools, skill-transfer programs, and address the Gen X ‘squeeze’ to keep these key employees engaged,” she said.
“The challenge will be making certain that Gen X employees feel valued by providing them with opportunities to not only gain experience from baby boomers, but to also share their own expertise and knowledge with Gen Y,” Dr. Hunter added.