Managing young workers in the downturn | Generation Y goes to work | The Economist

Generation Y goes to work

Dec 30th 2008 | SAN FRANCISCO
From The Economist print edition
Reality bites for young workers

JESSICA BUCHSBAUM first noticed that something had changed in May 2008. The head of recruitment for a law firm in Florida, Ms Buchsbaum was used to interviewing young candidates for summer internships who seemed to think that the world owed them a living. Many applicants expected the firm to promote itself to them rather than the other way around. However, last May’s crop were far more humble. “The tone had changed from ‘What can you do for me?’ to ‘Here’s what I can do for you’,” she says.

The global downturn has been a brutal awakening for the youngest members of the workforce—variously dubbed “the Millennials”, “Generation Y” or “the Net Generation” by social researchers. “Net Geners” are, roughly, people born in the 1980s and 1990s. Those old enough to have passed from school and university into work had got used to a world in which jobs were plentiful and firms fell over one another to recruit them. Now their prospects are grimmer. According to America’s Bureau of Labour Statistics, the unemployment rate among people in their 20s increased significantly in the two most recent recessions in the United States. It is likely to do so again as industries such as finance and technology, which employ lots of young people, axe thousands of jobs.

This is creating new problems for managers. Because of the downturn, Net Geners are finding it harder to hop to new jobs. At the same time, their dissatisfaction is growing as crisis-hit firms adopt more of a command-and-control approach to management—the antithesis of the open, collaborative style that young workers prefer. Less autonomy and more directives have sparked complaints among Net Geners that offices and factories have become “pressure cookers” and “boiler rooms”. “The recession is creating lower turnover, but also higher frustration among young people stuck in jobs,” warns Cam Marston, a consultant who advises companies on inter-generational matters.

Such griping may reinforce the stereotype of young workers as being afraid of hard work—more American Idle than American Idol. Yet a survey of 4,200 young graduates from 44 countries published in December by PricewaterhouseCoopers, a consultancy, found that they want many of the same things from work as previous generations, including long tenure with a small number of employers. And they are willing to put in the hours to get them, if they are treated well.

Indeed, Net Geners may be just the kind of employees that companies need to help them deal with the recession’s hazards. For one thing, they are accomplished at juggling many tasks at once. For another, they are often eager to move to new roles or countries at the drop of a hat—which older workers with families and other commitments may find harder to do. Such flexibility can be a boon in difficult times. “In the economic downturn what we are really looking for is hungry 25- to 35-year-olds who are willing to travel,” says Frank Meehan, the boss of a fast-growing mobile-phone applications business that is part of Hutchison Whampoa, a conglomerate based in Hong Kong.

Net Geners’ knowledge of internet technology can also help companies save money. Consider the case of Best Buy, a big American consumer-electronics retailer. Keen to create a new employee portal, the firm contacted an external consultancy that quoted it a price of several million dollars. Shocked by this, a group of young Best Buy employees put together a small team of developers from their own networks who produced a new portal for about $250,000. Another Net Gener at the company cobbled together a mobile-phone version of Best Buy’s website for fun in seven days in his spare time.

Best Buy, which announced in December that its third-quarter profit had fallen by 77% compared with the same period a year earlier, is also betting that its Net Geners can come up with new ways of boosting sales using the web and other means. “We’ll weather the storm and be stronger because of the Net Generation,” says Michele Azar, Best Buy’s head of internet strategy. Estée Lauder, a cosmetics firm, is also encouraging Net Geners to help it innovate. It has launched an initiative called iForce which brings together young staff to dream up ways of marketing products using emerging technologies.

Programmes such as iForce are based on the notion that Net Geners are well placed to encourage their peers to dip into their pockets. According to a recent survey by the Economist Intelligence Unit, a sister company of The Economist, Net Geners place more emphasis on personal recommendations than on brands when deciding which products and services to buy. Hence the importance of hanging on to clever youngsters who have grown up with Facebook, MySpace and so forth, and who know how best to create buzz among their peers.

Net Geners who find themselves out of a job are likely to use the same know-how to create a buzz about themselves so they can find another one. Charlotte Gardner, a 25-year-old Californian who was made redundant by a financial-services firm in November, has since been using online job and social-networking sites, as well as micro-blogging services such as Twitter, to promote her skills to potential employers. Ms Gardner, who is optimistic she will find another job soon, describes herself as “a glue kid”—someone who can get different kinds of people to work well together.

Firms battling through the recession will need plenty of “glue managers” who can persuade Net Geners to stick around and work with their colleagues on important projects. They will need to provide regular feedback to young staff on what is happening in the workplace and why—as well as plenty of coaching on their performance (see article). Companies that keep Net Geners in the dark will find themselves the targets of unflattering criticism both inside the firm and online. “These kids will scrutinise companies like never before,” explains Don Tapscott, the author of several books on the Net Generation.

In the end, compromises will have to be made on both sides. Younger workers will have to accept that in difficult times decisions will be taken more crisply and workloads will increase. Their managers, meanwhile, will have to make an extra effort to keep Net Geners engaged and motivated. Firms that cannot pull off this balancing act could see an exodus of young talent once the economy improves. That, to borrow from Net Geners’ text-message shorthand, would be a huge WOMBAT: a waste of money, brains and time.

Generation Y confronts economic crisis

STRUGGLE FOR JOBS
TheStar.com | living | Generation Y confronts economic crisis



As economy lurches, Generation Y members try to launch careers. Message is, stay positive
Nov 28, 2008 04:30 AM
Comments on this story (4)
Sunny Freeman
Staff Reporter

When Noah Schwartz began the second year of his MBA in September, he expected job prospects would be plentiful when he graduates next April.

But that was before the omnipresent "crisis" – you know, the international economic meltdown that causes Schwartz's professors to talk recession, worried baby boomers to discuss layoffs and retirement, and their children to rethink plans as they come of age in an era of economic uncertainty.

Schwartz, 26, says he's now more realistic about the chance of landing his dream job.

"I'm going to have to be a lot less picky," he says. "As a new grad, I'm worried I won't be able to get a good job right away.

"You'll really have to be the cream of crop to even just get an interview, with the way the market is."

Schwartz belongs to a generation of about 85 million tenacious, technologically savvy, multi-tasking North Americans born during a baby bulge in the 1980s.

The generation is so young – its oldest members are not yet 30 – that they have yet to forge one name for themselves, referred to, interchangeably, as Generation Y, the Echo Boomers, or the Millennium Generation.

As the baby boomers born after World War II now watch their pension savings drain, the members of Generation Y are embarking on their careers.

They make up about 17 per cent of the Canadian labour force, whereas baby boomers total about 40 per cent, according to a 2008 Randstad Canada report on the increasingly multi-generational workforce.

The university class of 2009 faces a tight labour market, making it harder to land the "perfect job," says Lauren Friese, 26, founder of talentegg.com, a Canadian career website for fellow recent grads.

And Gen Y job seekers – less willing than prior generations to stay in a career they are not happy with – "shouldn't expect to intern on Monday and have the job on Friday," she says.

During economic downturns, competition for jobs increases, says Terry Power, 44, managing director of the Randstad Canada employment agency. Existing employees are less inclined to change jobs, while companies use more temporary employees and many will wait for a recovery to recruit permanent employees.

But Generation Y shouldn't get their iPod headphones in a twist over the current career climate, employment experts say, because the health of the job market depends more on demographic trends than economic fundamentals.

Despite some short term "hiccups" in the economy, says Power, Gen Yers have "every reason to be optimistic" about finding a meaningful career.

This is partly owing to a wave of boomer retirements, which will accelerate over the next 20 years.

"There will be a prolonged period of baby boomers leaving the workforce and not as many people coming in behind them," Power says. "With previous downturns, you tended to see a lot of job cuts."

This time around, Power says, "we're continuing to see a significant demand from businesses, despite the economy. In a variety of fields, there are certainly not enough people to fill the jobs. (For instance), they don't have enough people in some IT positions and skilled trades."

Young grads also bring fresh ideas and new perspectives, and companies want that.

Employers are fighting a "war for talent" as fiercely as ever because, as boomer executives retire, Gen Yers with leadership potential can help companies weather the economic maelstrom.

Plus, their starting wages are significantly lower than the salary of a boomer with decades of experience, Power says.

Economic crisis aside, Gen Yers "hold the cards now," says Razor Suleman, 34, founder and CEO of I Love Rewards Inc., a Toronto corporate rewards and recognition firm with a mainly under-30 staff.

That's good news for Gen Y folks.



Not only do they expect the world from their employer, they believe that their work can change the world. Gen Yers have grown up during a technological revolution that has created a paradoxical generation, Power says.

They are simultaneously more worldly and more self-centred than prior generations.

"They've grown up in a world where they get what they want and quickly....They expect instant gratification because of their technology and, at the same time, this technology connects them like never before."

For MBA student Schwartz, there is a potentially positive picture despite his job worries.

He says, based on what they've learned at the Schulich School of Business, he and his fellow students believe there are opportunities now for meaningful change.

"It's an exciting time to be an upcoming graduate," Schwartz says. And he remains hopeful that he will eventually get the job of his dreams.

"With the baby boomer generation being set to retire in the coming years, we are the next leaders."