INSIGHTS EDITION 2 • OCTOBER 2008
RECRUITING THE NEXT GENERATION:
The battle for talent and the impact of demographic changes on the future world of work, by Axel Praus, DEGW Germany
The battle to secure future talent is about to enter its most critical phase. In the next five to ten years, significant demographic changes, combined with continuing, rapid technology development, will radically alter not just who is available to enter the workplace, but the way in which they expect, or even demand, to work. Whilst salary and career prospects are the most appealing factors for company and job attractiveness, new DEGW research has also identified that the workplace environment and flexible approaches to working are equally important to students soon to be entering the job market. To position their companies successfully, it is essential that employers around the world understand both the fundamental changes taking place and the expectations of this pool of future employees, in particular Generation Y. Furthermore, if they are to attract, motivate, and, most importantly, retain the best employees, it is vital that they adapt their recruitment and retention strategies now. Those that fail to do so will be left behind in the race to secure the most talented students. These are just some of the conclusions of DEGW’s research study Recruiting the Next Generation, undertaken by the Munich office and launched by founder Frank Duffy at Orgatec in Cologne on 22 October.
Recruiting the Next Generation
DEGW conducted this major research study with students from more than 20 universities across Germany, Switzerland, and Austria, and interviewed top employer representatives and HR executives in major global companies. The major goal was to close knowledge gaps and provide access to comprehensive information about the upcoming changes in the world of employment and the major impact that Generation Y will make upon it.
Demographic developments over the next decades will have huge repercussions for employment and employers. In Germany alone, approximately 30% fewer people per age group are entering the labour market than five years ago. According to statistics, the labour force aged 20-59 will decline significantly because of these demographic changes. Consequently, companies currently tackling a labour surplus will soon be facing labour bottlenecks. Within five to ten years, the situation will be characterized by reduced availability of young employees. Companies that want to remain internationally competitive will have to compete even more for highly qualified employees. This intensive competition is already affecting some sectors experiencing a shortage of qualified labour.
Highly-skilled specialist and executive personnel will increasingly be sought after globally. Companies and human resources managers must be fully aware of relevant trends and causes, along with the introduction of new ways of working.
Work is Changing
In the developed world, the current world of work is changing at a pace faster than ever. New digital technologies and devices facilitate new forms of work, and we are rapidly becoming truly digitalised. As a consequence, work and leisure are increasingly intertwined. Corporate management has to be aware of, and plan now, for the changing attitudes, aspirations and demands of employees who dislike traditional “command and control” management. Systems and methods that once served to hold organisations together are now more likely to be negatives. Companies need new kinds of organisational glue and new ways of working that create more flexibility while allowing for necessary controls. Traditional communication forms are making way for new forms of digital communication, and knowledge exchange is becoming more diverse.
Crucial factors in the changing world of work encompass the ongoing impact of technology, the rapid change of work styles, temporary teamwork, innovation as a key business driver, the creation of a new global knowledge community, the importance of the individual, and the merging of work and leisure time. New jobs will emerge which will be carried out by the creative class – a global knowledge elite. Therefore, efficient workplaces that can accommodate technology, flexible ways of working, and support leisure and family time will be critical to future business success.
Generation Y – The next generation
The anticipated impact of Generation Y on the workplace puts it squarely in front of many employers. Generally characterized as optimistic, multicultural, happy to try out new things, entrepreneurial, highly informed, ambitious, and challenging, this is the new generation of employees that will end traditional ways of working.
Generation Y has grown up in a digitalised world. Using the Internet and new media in intensive and pervasive ways, they have set themselves apart from previous generations. They are often characterised as having one thing in common: the extensive use of technology and new media in all aspects of their lives. This is true, but it does not present the complete picture. Recruiting the Next Generation helps to demystify this generation and offers a more precise picture of it.
Is Generation Y – the group keeping the media busier than any other generation – really that different? In a world dominated by an aging population, will its impact really be so significant in the workplace? Our research deals with these and other questions. For this group, careers are no longer the only thing in life. The study illustrates quite clearly that family, personal networks, and home are increasingly taking centre stage. As to the choice of employer, members of Generation Y favour, above all, employers offering positive, attractive work environments and the work/life balance they seek. Financial and material incentives remain important, but are lower priorities. It is evident that this generation wants to assume responsibility, and to shape society and the workplace according to its ideals.
Plan now or lose the battle for talent
It is in the context of this new dynamic that employers have to plan for the future. International competitiveness can only be sustained with a highly qualified, innovative and adaptable workforce. Hence, modern communication tools and workplace environments, which reflect the skills and communication habits of this generation, are extremely important to success.
The extent to which companies have realised that a new generation of future employees is emerging will determine their ultimate success in the battle for talent. Companies already actively thinking about what motivates Generation Y, their preferred ways of working, and how they might become loyal employees will be best positioned to succeed. Those companies that have not yet realised the significance of, and planned for, this shift will be the losers.
The development and implementation of potential strategies cannot be postponed to a future date. Current trends point to a transition of economic power away from the employer and to the employee. This will obviously intensify in the coming years, and recruitment and retention strategies that are attractive to the knowledge-driven and tech-savvy generations to come must be initiated as soon as possible.
The Report
Recruiting the Next Generation is an essential tool for employers. The report provides:
- Access to information on a new generation of employees;
- Access to new demographic trends and developments;
- Analysis and know-how gathered from national and international models of good practice;
- Elaboration of the fundamentals for planning and implementing employee recruitment, integration, and retention;
- Expectations held by employers;
- Differences across generations;
- Company readiness for the future; and
- The demystification of Generation Y.
The war for talent is being fought on the international stage. Recruiting the Next Generation is essential for developing the new competitive edge.
For more information, contact Axel Praus at apraus@degw.com