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Managing the Multi-Generational Workforce

Case Profile Study

for IT Human Capital Management Executives

Managin

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ulti-G

enera

tional

Work

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For more information about the study for IT Human Capital Management Executives, contact [email protected].

Quarter 1, 2007

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© 2007 Gartner, Inc.

Managing the Multi-Generational Workforce 1

Preface

This Gartner EXP HR study, Managing the Multi-Generational Workforce,draws on insights from select HR and IT leaders and real-world case profiles. The study also includes substantive, practical approachesdesigned to improve the performance of the IT organization. Three keyquestions addressed are:

• What are the characteristics of a multi-generational workforce?

• How do you blend, manage and maximize the contributions of eachgeneration of the workforce?

• How do you develop and retain a multi-generational workforce?

To help address these questions, the study analyzes in-depth case profiles

of the experiences of IT and HR executives. The experiences shared focus

on developing people strategies to build highly effective IT organizations,

drawing on the strengths of each generation in the workforce. The common

trends noted among the case profiles are integrated with supporting

secondary research and Gartner analytic frameworks. From the study and

explicit advice of practitioners, the lessons learned are incorporated into a

set of recommendations that provide practical advice for HR executives

supporting IT leadership teams.

2 Gartner EXP HR

The research team

Authors

Andrew Walker, research director, Executive Programs Content

Diane Berry, managing vice president, Executive Programs Content

Lily Mok, research director, Executive Programs Content

Contributors

Dave Aron, vice president, Executive Programs Content

Bill Link, program director, EXP HR

Rick Poppell, regional vice president, Executive Programs Fulfillment

Andy Rowsell-Jones, vice president, Executive Programs Content

Research for

IT Human Capital Management Executives

The EXP HR program for IT Human Capital Management Executives focuses on providingmembers with a case-based research and peer-advisory offering. The program is exclusivelytargeted to those executives who have responsibility for IT human capital management.

The EXP HR program specifically comprises a family of offerings that provide a dynamic,community-based, interactive membership for senior HR/IT executives who are facingsimilar issues and working toward finding applicable solutions. Program activities includemember-driven research, real-world case profiles, interactive peer-exchange summits andpersonalized service from the group’s program director. The key value proposition deliv-ered to the members of the program is practical and actionable advice on the mostpressing IT/HR management issues. Benefits of the program for members include:

• Learning from experiences of peers who are addressing the same challenges.

• Saving time and money as they identify appropriate solutions with the help of Gartnerand their peers.

• Seeing how they compare to other peers and organizations as they validate currentpractices, measure their progress and compare real-world implementations.

• Working with Gartner experts, including an assigned Gartner management consultantand appropriate Gartner analysts.

• Receiving exclusive concierge treatment—personalized service and preferential accessto the peer network and program resources.


Table of contents

Executive summary 4

Introduction 9

Section 1: Understand the changing demographic context 15

Section 2: Assess and plan for a multi-generational mix 29

Section 3: Review sourcing strategies for a mixed workforce 39

Section 4: Integrate the multi-generational workforce 59

Section 5: Executive action plan 75

Appendices 87

4 Gartner EXP HR

Executive summary

This research study draws on interviews conducted with 10

organizations. The IT functions within these organizations were

found to apply common practices for enabling the successful

blending of generations across the workforce. These practices

involved creating a multi-generational talent pipeline and

harmonious culture that supports age diversity. As a result, the

organizations have gained early awareness into multi-generational

workforce issues and developed a framework for planning and

responding to changes in the workforce composition.

Alternatives are also considered for sourcing a talent pipeline of

younger workers to replace retiring Baby Boomers. Lastly,

recommended approaches and principles are identified for

sustaining and retaining a blended workforce. This includes

analyzing workforce requirements now and hiring early enough

to find and grow necessary skills before employees decide to

exit. Organizations can effectively manage the risks of workforce

transition through building their own pipelines of talent.


Understand the changing demographiccontext

U.S. organizations face challenges in finding the

right talent despite there being enough people in

the workforce. A skills gap is projected, arising

from a lack of students opting to go into

computer sciences and engineering. IT organi-

zations have deterred would-be students by

reducing entry-level and ground-up learning

opportunities, preferring to hire those with

experience. Such sourcing is likely to create

scarcity of skills and become too expensive.

Also, the reduction in workforce supply after

Baby Boomers exit the workforce could

jeopardize the current success of the U.S. as

the world leader in innovation.

Several of the research participants said that the

issue of skill losses through Baby Boomer retire-

ment and lack of pipeline bench strength had

been raised at HR departmental staff meetings.

However, urgency and awareness of the differ-

ences between generations were often lacking

because attrition rates were not yet adversely

impacted.

Understanding the key characteristics and work

style of different generations is the first step to

creating awareness. The definitions of the

generations used in this report are those

commonly applied by commentators. The timing

is probably less important than appreciating the

broad differences between generations. Those

of the generation just starting up their careers

aim to accelerate in pay and status (commonly

known as Generation Y or Millennials, born in or

after 1978). Those in their early-to-mid career

stage are challenged with balancing family

responsibilities and increasing expectations at

work (commonly known as Generation X, born

between 1965 and 1977). The remaining others

(commonly known as Baby Boomers, born

between 1946 and 1964), are peaking in their

careers and preparing for retirement.

Differences between generations can be seen in

IT, not only because the personal styles of each

generation vary but also because their attitudes

to and prowess with technology are enhanced

by each oncoming group. The key to managing

style differences is to understand them and see

them for the strengths they bring, and not focus

on the weaknesses. The blended workplace

culture that best suits a multi-generational

workforce is one that is flexible enough to adapt

to differing needs in learning, communication,

diversity and work/life balance.

Assess and plan for a multi-generationalmix

Organizations must have the needed bench

strength to replace retiring Baby Boomers. They

need to get ready for the natural attrition of the

workforce and prepare to grow their own talent.

Planning now will enable them to attract and

retain an integrated mix of the different genera-

tions that can adapt to changing skill needs.

The value of workforce planning comes in

enabling the organization to build a pipeline of

talent at various levels of experience and

responsibility.

6 Gartner EXP HR

Effective workforce planning will enable IT

organizations to manage their skills inventory

through the coming period of transition. A

workforce analysis is conducted initially to

provide a clear view of skills mix by demographic

composition of the organization. Based on skills

inventory and attrition analysis, including retire-

ment projections, skills gaps and timing can be

identified. A series of retirement scenarios can

be used to plan and address skills and knowl-

edge transitioning from retiring Baby Boomers

to younger generations. The skills sourcing plan

is created to identify the sourcing channels to

be used to fill each projected skills gap for both

the short term and long term.

Review sourcing strategies for a mixedworkforce

The IT strategy should provide a technology

projection that, in turn, can be translated into a

skills forecast. Recent research has shown a

shift in IT hiring trends as computer science

graduates become scarcer. More entry-level

opportunities and career routes are opening up

directly from business rather than technical

sources. With the call for IT to be closer to the

business and create business value, the merits

of a business education equal those of the more

technical. By assessing underlying skill needs

and hiring criteria, the right sourcing channels

can be identified and planned to bring in

younger generation workers that possess both

technical and business skills.

Contracting and on-call arrangements are useful

solutions, particularly in prolonging the working

life of the Baby Boomer. Deferred retirement

Baby Boomers offer a viable, ready-now

resource. Most want flexible schedules or larger

chunks of time—up to six months—on and off,

which suits both project work and the

contracting model. Organizations using such a

model get to retain Baby Boomers long enough

to transfer that knowledge while replacements

are recruited. On-call arrangements are the

equivalent of placing the individual on a retainer

and having them available for specified times on

specified days. These arrangements also enable

the transition of knowledge from Baby Boomers

to those who now must assume responsibility.

The multi-generational talent pipeline is likely to

be fueled in part by external hiring. Those who

are serious about creating a talent pipeline

should use a multitude of sourcing channels

for hiring. Maintaining relationships with local

institutes of technology and chapters of profes-

sional associations can help hiring managers

network with possible candidates. Former

associates, now organizational alumni, can be

sent copies of company newsletters so that

they can stay in touch and interested. Internal

candidates from areas of the business are also

worthy of consideration. While job descriptions

may seem similar to all the others on the

Internet, rebranding the recruitment image

encourages greater interest in the organization.

Internship and internal job rotation programs are

ideal for bringing Generations X and Y into the

talent pipeline. Some organizations also provide

a means for business staff to transfer into IT


after demonstrating both an interest in the

systems used in their business and basic tech-

nical appreciation. Rotation can also be used to

develop leaders from Generation X to replace

Baby Boomers in management roles. Intern

programs take various forms. Some guarantee a

job at the end of the internship. Others are more

competitive, only hiring a proportion of their

interns into vacancies.

An alternative to recruitment is to grow people

within IT. By planning career development,

people with the right skills can be made available

at the right time. One way to accomplish that is

to identify the series of roles that individuals

need to perform in order to grow. For those with

high potential, transfers and promotions can be

planned without waiting for vacancies. The plan

can help drive strings of moves for development

purposes.

Where skills are no longer core to the organiza-

tion, an external services provider (ESP) may

have the economies of scale to provide those

skills. Research has shown that ESPs are

becoming a source for skills that are in short

supply. Many of the jobs held by Generations X

and Y were transferred to ESPs. Some of the

individuals who transferred with their jobs may

be rehired for promotional opportunities.

Another ESP model is the offshore one,

providing premium skills at significantly lower

cost, but demand is pushing up these costs at

rapid pace. U.S. firms must at some point find

ways of reestablishing their ability to meet their

own demand.

Integrate the multi-generational workforce

An integrated workforce builds on differences

and harnesses the strengths of each generation,

involving them in sharing their passions and

ideas to create robust solutions. Successfully

blended organizations deploy strategies

that enable individuals to contribute beyond

traditional boundaries and seek the collaboration

of others.

Behavioral competencies can be aligned with the

organization’s values to enable individuals of

different generations to understand what to expect

from each other, irrespective of age. Typical

behavioral standards that need to be set to

create an integrated culture include: non-judg-

mental listening, sharing ideas and experience,

offering solutions to problems, recognizing the

input of others and taking measured risks.

Organizations are also looking more at how to

create benefits programs that offer flexibility to a

diverse workforce. Generations X and Y value

the benefits of work/life balance. Flexible work

arrangements, such as telework, can be inte-

grated into a package that meets the preferences

of all generations. One form of flexibility is part-

time work, which enables Baby Boomers and

Generation X mothers to return to work.

Benefits programs that are tailored to the needs

and preferences of each age group will likely

increase employee retention.

Training and development programs are also

valuable if aligned with the respective needs of

each generation. For example, options should

8 Gartner EXP HR

be offered for classroom and electronic forms of

learning. Also, the chunks of time to be devoted

to training should fit varying attention spans.

Specific training in inter-generational awareness

should avoid affirming negative myths about

different generations.

Through such initiatives as mentoring, job

rotation, and diverse hiring and training, the

opportunity to transform the culture exists. This

opportunity, coupled with financial incentives, is

likely to impact associate retention in a positive

manner. The new environment, if tailored to the

needs of each generation, can become a

challenging and exciting place to work.


Introduction

Plan now for workforce changes

10 Gartner EXP HR

This study explores how organizations manage and develop the multi-generational workforce in a

manner that blends the attributes of each and maximizes their contributions to the enterprise. The

study will explain how to develop a people strategy that builds a highly effective IT organization by

drawing on the strengths of each generation in the workforce. Included are case profiles of select

large enterprises coupled with Gartner expertise and secondary research. The results of the research

are analyzed to present a set of lessons learned and best work practices. Three areas are examined

that help IT senior management and IT-HR to prepare for and institutionalize an human capital

management (HCM) strategy.

• What are the characteristics of a multi-generational workforce?

• How do you blend, manage and maximize the contributions of each generation of the workforce?

• How do you develop and retain a multi-generational workforce?

Study scope and issues

“The situation may not seem very dire right now. Temporary economicdips could help employers cope for the moment. However, longer term,the shortage of capable workers will only get worse, not better. Smartemployers realize they need to stay ahead of the curve. The time tostart acting is now.

Don’t be caught unprepared. Companies need to find and developtheir bench strength. Do it now before the demographics fully kick in.”

Source: Panszcyk, L.A., HR How To: Intergenerational Issues. CCHKnowledge Point, Chicago, 2004


To create a blended multi-generational workforce first requires assessing the current skills mix

against demand, understanding vulnerability to retirement and attrition, and then planning to address

the shift in workforce demographics and mitigate the risk of losing critical knowledge. IT organiza-

tions must prepare now for a multi-generational mix. It is likely that, where the workforce is

comprised primarily of older workers, IT organizations will find the call for action to be compelling.

Sourcing strategies must be reviewed so that they contribute to building a mixed workforce. Once

acquired through appropriate sourcing channels, the different generations of workforce can then be

integrated by creating an environment that meets the diverse interests of all individuals.

The framework

Framework for creating a blended multi-generational workforce

12 Gartner EXP HR

The purpose of the case profile approach is to create content that can be shared among a network

of IT human capital management executives and facilitate peer-to-peer sharing of experiences. The

case profile studies extend the peer exchange by systematically examining the experiences of

members and by bringing in the experiences of nonmember executives. The case profile information

is supplemented by secondary research and Gartner expertise. The results of the research are

analyzed to present lessons learned and a set of best current practices.

The case profile approach

Gartnerresources

Structured interviews with members and

nonmembers

Analysis and conclusions

Case profiles

Explore issues

Broadened base of experience and opinion

Analytic framework

Expert insights

Best working practices:

Practices that have achieved results for peers

Research in industrysources

Member discussions


This research study draws on interviews conducted with 10 organizations. The case profiles used

are primarily from mid- to large-sized, for-profit organizations in a variety of industries. There are also

one federal government organization and one major center of higher education. The size of the

organizations varies with four having less than 500 IT employees and two having more than 5,000.

The range of sizes of workforce across different industry sectors is pertinent to creating strategies

that will enable every type of workforce manager in IT.

The case examples

10 case profiles contributed to this project

Retail

>1,000 employeesFortune 500 company Global

Manufacturing 1

$25 – $30 billion in revenue60,000 employees 1,300 IT employees70+ countries

Manufacturing 2

$10 – $15 billion in revenue38,000 employees 900 IT employeesApproximately 60 countries

Federal

Not available – revenue197,000+ employees 13,000+ IT employeesCanada

Financial services 1

>$500 million in revenue400 employees 80 IT employees4 countries

Education

$3 – $5 billion in revenue20,000 employees 300 IT employeesOne U.S. state


$20 – $25 billion in revenue66,000 employees 4,000 IT employees130 countries

Business services 1

$30 – $40 billion in revenue200,000 employees 5,000 IT employees220 countries

Industrial

>$500 million in revenue1,500 employees 67 IT employees4 countries

Business services 2

>$500 million in revenue124 employees 120 IT employeesU.S. only

14 Gartner EXP HR


Understand the changingdemographic context

1

16 Gartner EXP HR

The challenge in the U.S. now “has little to do with business costs and even less with manufacturing

prowess.” The core of this challenge is “the new global competition for talent” according to a

published work by Richard Florida, Flight of the Creative Class, Harper Collins, New York, 2006.

Florida writes that today’s “terms of competition revolve around a central axis: a nation’s ability to

mobilize, attract, and retain human creative talent.” The reduction in workforce supply after Baby

Boomers exit the workforce could jeopardize the current success of the U.S. as the world leader in

innovation. Asian countries and Ireland are catching up in their research and development invest-

ments and patents (Source: ITAA, 2004). U.S. organizations will be under pressure to address not

only the issues of skills shortage but also the concerns of creating a blended multi-generational

workforce, in particular creating a continual pipeline of talent.

The multi-generational workforce

Demographic changes drive the need for a blended multi-generational workforce

Blended workforce concerns • Respect for/understanding of other generations

• Work/life balance and mobility

• Assuring ongoing supply of talent

• Keeping skills up to date

Talent pipeline issues • Competition for experience threatens salary stability

• Few early career workers (X/Ys) to question old ways

• Loss of Baby Boomers puts legacy systems at risk

• Lack of entry-level jobs and training opportunities

U.S. economicissues

• U.S. underthreat as worldleader in R&Dand innovation

• Retirements (Baby Boomers)accelerate forthe next 10years

• Gen X and Y technical talent in demise dueto wrong skillsmatch

• Gen X and Y technical talent is at risk ofbeing sourcedfor offshoreopportunities


In an interview with Time magazine, Secretary of Labor Elaine Chao said, “Our country is facing a

skills gap. About 4.5 million new jobs have been created since May 2003. The majority requires

higher skills and educational levels, and that means these are relatively well-paying jobs. Our job is to

make sure that we provide training and work with the private sector to train the workforce.”

U.S. organizations face challenges in finding talent despite there being enough people in the work-

force. A skills gap is projected, arising from a lack of students opting to go into computer sciences

and engineering. IT shops have deterred would-be students by reducing entry-level and ground-up

learning opportunities, preferring to hire those with experience.

U.S. economy faces skills shortage

Impact of a skills shortage

Workforce skillsshortage leads to:

• Competitive hiring

• Salary inflation

• Non-vocationaleducational choices pending more hiring

• Training at entrylevel by employers

Number of U.S.jobs projectedover the next

10 years

Type of skillsavailable

Type of skillsneeded

Number ofpeople

available foremployment innext 10 years

=

=

Impact

18 Gartner EXP HR

The changes in the age demographics of the workforce will soon make managing a generation-

diverse workforce a pressing issue for many organizations. Organizations need to create a blended

workforce in which there is respect for age diversity. Older workers may be frustrated that younger

colleagues are not showing an interest in acquiring the skills needed to replace them. Younger

workers, however, assume they know more than enough until they are stretched and have to solve

problems with more autonomy. A mature blended workforce relies on the Baby Boomer becoming

more of a mentor, and the younger worker learning to take more responsibility. In this way, the

younger worker becomes more involved, and the older worker acts as a teacher and quality

manager, providing a safety net to prevent serious mistakes.

Typical blended workforce issues

Case examples: Understanding issues of a blended workforce

Case profile Issues

Creating a blended workforce • Ensuring that each generation understands the other

• Creating an environment which allows each generation to interact differently with differentexpectations

• Retention, especially of the ambitious, the experienced and those who want work/life balance

• Providing opportunities to make a difference in developing and supporting newer technology

Keeping skills current and having projects that everybody can work on• Keeping individuals’ skills, especially those of Baby Boomers, up to date is the most

difficult, time-consuming and costly challenge

The key challenges of creating a blended workforce are interrelated• Balancing work-life and mobility

• Developing people earlier in their careers

Industrial

Retail

Financialservices 1


Like other case profiles, this global retail company has begun to examine the need to create a

blended workforce. Organizations report that as Baby Boomers prepare to leave and younger

workers start to take over their roles, the change in demographics means a new consensus in what

is valued. Perceptions based on stereotypes abound at each and every level of the workforce and

are often inaccurate. Contrasting ends of the generations (Baby Boomers vs. Generation Ys)

commonly have inaccurate perceptions of each other. It is important to understand and manage

these different perspectives to create a common workforce identity.

Prepare for changing workforce demographics

Case example: Understand the generational differences

Retail

>1,000employees

Fortune 500 company

Global

IT age demographics(as of 12/06):

Median age: 40

28 years of ageor under: 6%

29–41: 36%

42–60: 55%

Over 60: 3%

A change in demographics means a new consensus in what is valued.Perceptions based on stereotypes abound at each and every level of the workforce and are often inaccurate. Contrasting ends of the generations commonly have inaccurate perceptions of each other, for instance:

Individuals in their 20s are used to working a less traditional schedule, and productivitycannot be measured purely by hours in the office. They are happy to multitask. They mayhave three things going on in their office. The iPods are on, and they listen to music.They may also have a music video in the background, and they may be coding all at thesame time. As they find a break, they also text message friends.

Baby Boomers observing the 20-somethings may find them unfocused and perceive themto be unproductive. The older workers are used to a traditional 8 a.m. to 5 p.m. andoften longer day, but they complete their work in the office and then they leave. It mayappear to the younger colleagues that their older counterparts lack the energy, flexibilityand enthusiasm needed, and that they don’t keep up-to-date on current technologiesand trends.

20 Gartner EXP HR

This retail company, like other mature organizations in the case profiles, has a strong culture. Such

organizations rely on shared purpose and values to create alignment of effort despite differences in

perspective between the generations. Younger IT professionals do want to work on interesting tech-

nology but, equally important, they join an organization because the brand or reputation is trusted.

They stay for many reasons including teamwork, flexibility and interest in the operational side of the

business. Also, once hired, the company actively invests in people, particularly during up-times in a

cyclical business, and provides them with the flexibility needed to balance work life with family.

Case example: Challenges of creating a blended multi-generational workforce

Retail

>1,000employees

Fortune 500 company

Global


Median age: 40


29–41: 36%

42–60: 55%

Over 60: 3%

The key challenges of creating a blended workforce are interrelated:

How do you achieve work/life balance and mobility?For a company that operates all around the world and wants to share ideasand talent, generating an interest in relocation is difficult.

How do you focus on developing people earlier in their careers?Ideally, enable people to acquire experience at an earlier stage in their careerbefore family and community roots go too deep. This presupposes that theworkforce comprises enough members in their early career to train anddevelop.

How do you attract people in hot disciplines?It helps to have a compelling offering. People want to work for the companywhile it retains the brand of a winner and when times are good.

How do you prepare for the next downshift?The key is making sure that you invest in people during the good times.


The undesirable outcomes of failing to address demographic changes are on the horizon, but still

many defer taking action. According to Robert Morison, Professor of Political Science at MIT, in

Computer World, July 3, 2006: “The oldest boomers are 60, and the average retirement age is 63,

so I’d say you'll be feeling pressure by 2010 and very much pressure by 2015. In most organizations,

this is still seen as an indefinitely postponable issue.” By analyzing requirements now and hiring early

enough to find and grow skills before they exit, organizations will build their own pipelines of talent.

Invest now in the talent pipeline

Failure to invest in the pipeline now may lead to undesirable outcomes

Business and process skills

Talent pipeline

Technology skills

Leadership and relationship managment skills

Undesirable outcomes:• Salary inflation and compression

• Under-employment in critical skills

• Skills vulnerability as Baby Boomers retire

Lack of attention to talent pipeline:• Lack of new entry-level jobs

• Poaching, not developing, skills

• Wrong balance of technical vs. business skills

• Gen X and Y look outside of IT

22 Gartner EXP HR

Several of the research participants said that the issue of skill losses arising from Baby Boomer

retirement and lack of pipeline bench strength had been raised at HR departmental staff meetings.

Some held discussions or brainstorming sessions, including breakout team task forces, to create

ideas on strategies that would protect the organization. Unfortunately, many observers noted that

urgency was lacking either in these meetings or when they reported back because attrition rates

were not yet adversely impacted. Initially, there needs to be communication of the issues and a

commitment to prevent them.

Case profiles: Typical multi-generational talent pipeline issues

Case profile Issues

Replace legacy systems staffing

Situation: Legacy systems are supported by an aging workforce, and that talent will soonleave

Implications: Those in the pipeline have a different set of skills. The challenge is to try tomaintain legacy systems while recruiting skills in existing and future technologies.

The lack of younger people coming into the organizationThe traditional culture may deter them. The managers are senior, both organizationally and byage. They may not understand the different needs of younger staff and different goals andvalue systems. They need to adapt their management style.

The talent pipeline is restrictedMuch of the work performed by younger people has been outsourced. Job analysis helpsdeploy people where needed. Skill shortages include basic leadership skills.

Baby Boomer retirements create few opportunities for early career IT professionals

Situation: Opportunities to develop younger, less experienced workers are hard to find. Mostindividuals join with at least 10 years experience and are roughly 36+.

Implications: 10+ years of work life are lost by not having the 25 to 35 year olds. Innovation suffers because questions are not posed that help drive innovation by challenging others’ assump-tions. Also, the more experienced people are unable to find others to whom they can transfer theircapabilities. The result is a gap in what is needed for seamless continuity after they retire.

Businessservices 2

Businessservices 1

Manu-facturing 1

Financialservices 2


IT and HR leaders need to understand the changing demographic context. The call for action is

compelling. IT organizations can use the framework shown in the figure below to assess and plan for

a blended multi-generational workforce. Sourcing strategies must be reviewed so that they

contribute to building a mixed workforce. Hiring from outside may not be an option, and so consid-

eration must be given to reinitiating programs for training and growing the workforce. Organizations

who invest in their people now are the most likely to be able to retain them later. Once acquired

through appropriate sourcing channels, the different generations of workforce can then be integrated

by creating an environment that meets the diverse interests of all individuals.

Framework for a blended multi-generational workforce

Blended multi-generational workforce framework

24 Gartner EXP HR

There are varying perspectives on when generations start and end. The labels and dates used in this

report are the ones most commonly reported. However, more important than labels and dates is

the ability to appreciate the broad differences in expectations between generations. Those in their

early-to-mid careers aim to accelerate in pay and status (Generation Y, also commonly known as

the Millennials, born after 1978). Those who are more established are often balancing family

responsibilities with work (Generation X, commonly referring to those born between 1965 and 1977).

The remaining others (the Baby Boomers born between 1946 and 1964) are peaking in their careers

but are looking to apply their expertise meaningfully as they prepare for retirement.

The characteristics of the generations

General characteristics of different generations

Baby Boomers1946–1964

Generation X1965–1977

Generation Y1978–present

Baby Boomers• Want challenging, value-

contributing work in a field ofexpertise

• Their focus: employee insurance benefits

• Expect to be taken care of,such as being trained in technology

• Work long hours but prefer tobe on site

• Like to train and mentor othersto ensure that their work iscontinued

• Prefer to stay with their existingemployer if satisfied with theenvironment

Generation X• Request ambitious challenges

but fail to prepare

• Challenge authority and pushback if something seemswrong

• People skills need attention

• Overuse e-mail; underuse faceto face

• Interested in work/life balance

• Creative and intuitive

• Open to virtual learning

• Adapt to technology quickly

Generation Y• Quick learners, especially

technically

• Employment expectations arerealistic

• Low expectations of a careerfor life or long-term SocialSecurity. High global awareness.

• Independent minded and, forexample, refuse to work longhours

• Have not seen a downturn,and so the threat of job loss

does not create fear

• Confident, know what theywant and are prepared tochange employers


Technology itself has always been the driver for candidates entering careers in IT. The Baby Boomers

like to stay abreast of the changes in their area of expertise, while members of Generations X and Y

are typically more open to learning new technologies. All want variety and the chance to improve

their expertise, take more responsibility and solve more challenging problems. Generation Y brings

the insight of new perspectives and questioning of old assumptions. Generation X strives to experi-

ment and try new ways that will make significant breakthroughs. The Baby Boomers bring reason

and caution based on experience and can often get to the root of a problem more quickly.

Case example: Technology as a differentiator


>$500 million inrevenue

400 employees

80 IT employees

4 countries

Baby Boomers: They have focused much of their experience on specific areas of technology and prefer todeepen their skills in that specific technology rather than learn new technologies. This may make them seemless flexible but does make them valuable as experts.

Source: Case studies

Generation X: “They understand that technology is their differentiator, and that’s why somany of them are in technology. They understand technology, but it’s not embedded inthem as it is with the Ys. Independent, they dislike structure.”

Generation Y: “The Ys bring experience in technology because they’ve always been onit. They think of it as a way of life and don’t care what they use. They have to be online,connected, 24/7. They don’t touch paper. If information is not integrated so that theycan see it instantaneously, they regard it as a problem.”

Quotations attributed to vice president, information systems

26 Gartner EXP HR

A blended workforce is one that respects generational differences in style and looks for ways of

using differences to advantage. Each generation has its own work style and preferences. These

differences can often seem intimidating or frustrating and may become sources of conflict between

generations. In the war for talent, it helps to know what makes each generation tick and apply flex-

ible policies that appeal to all. The key to managing style differences is to understand them and see

them for the strengths they bring, and not focus on them as weaknesses. There are savings to be

realized too, if the needs of each generation can be met without paying for features of an employ-

ment package that are not universally attractive.

Case example: Style as a differentiator


>$500 million inrevenue

400 employees

80 IT employees

4 countries

Baby Boomers value collaboration and organizational protocol

They prefer to learn in physical classrooms, be shown the ropes and jointly build on existing areas of expertise. They respect the protocols of the organization.

Diversity

“They are going to be the most ethnically and racially diverse group ever. They like tohave different friends from different races and nationalities, and they thrive on it.”

Team orientation

“They go to their social network of friends and peers for opinions and ideas before goinganywhere else. If given a project, the Yers on the team will join together to get it done.”

Generation X is fun seeking and independent

“The Xers are highly independent. They can be very cynical and very self reliant. I cangive an Xer anything, and they will figure it out. With the Xers, it’s about trying to getthem to be less cynical and to embrace procedures and structure. They always want tohave fun. My response: ‘In some things we can, and others we can’t. The corporation isthere for a reason; there are procedures and policies.’ ”

Generation Y learns experientially

“Their style is visual. They like to get engaged in learning how to do it, as with videogames. They need the learning curve, but don’t think they do. Instead, tell them whatthe group does, the strategy and how it relates to the organization, and this is how theyfit in. They embrace that.”

Quotations attributed to vice president, information systems


In response to the challenge of how to enable different generations to work together, several organi-

zations in this study had first identified the values that provide direction for their desired environment.

They recruited candidates whose behaviors were generally consistent with those values. In this way,

the differences between age groups were less significant than the consistency of the values, or

cultural glue that held them together. Those selected usually find that they are a good fit and

become enthusiastic that they have found the right place to grow their careers. Workplace cultures

that best suit a multi-generational workforce are those that are flexible enough to adapt to the

differing needs of each generation in learning, communication, diversity and work/life balance.

Multi-generational differences in adapting to the work environment

Population group/workexperience element




Preferred communication style

Prefer face-to-face withwritten for administrationor due to complexity

Adept with CD and Web-based/e-mail/voicecommunications

Prefer instant messagingapproach. Short, sharpand no frills. Cell for voice.

Work style Value long hours andphysical presence

Value independence,committed to work butexpect reward

Values work/life balanceand working virtually

Cultural adaptability Adapt to other perspectives but remaintrue to roots

Open to mix of culturesand well traveled

Global perspective. Havediverse friends and contacts internationally.

Learning style Relearning and re-skillingare vital as legacy systemsare retired but can bechallenging

Independent learners.Self directed. Learn experientially.

Expect to be taught.Video game training helpsteach strategy. Needproblem-solving skills.

28 Gartner EXP HR


Assess and plan for a multi-generational mix

2

30 Gartner EXP HR

U.S. organizations need to address demographic competition now, so that they are not left behind.

Research conducted by IBM shows that many employers have not identified which skills they will

lose. Others are preparing by evaluating the workforce, optimizing people-based processes and

examining globally integrated business models.

Organizations must have the required bench strength to replace retiring Baby Boomers. They also

need to be ready for the natural attrition of the workforce and prepare to grow their own. Planning

now will enable them to attract and retain a mix of the different generations to build such bench

strength.

A generational mix ensures bench strength

Plan early to create an environment that entices a multi-generational workforce

Baby Boomers

Pla

nnin

g

Generation X

Generation Y

Multi-generationalworkforce


The workforce analysis component of the workforce plan helps in maintaining the bench strength

through the assessment of different retirement scenarios and skill needs. Healthy Baby Boomers are

likely to stay with an organization that meets their needs for job satisfaction, social interaction and,

most importantly, personal financial needs. In contrast, Generation X, commonly of a family-rearing

age, looks for work/life balance, while Generation Y seeks the best opportunity for advancement in

addition to being valued for their contribution. The keys to retention are to meet the needs of each

generation while also grooming Generation Xs as tomorrow’s managers and giving Generation Ys the

chance to grow as they work with the new technologies that excite them.

Assess the supply and demand impacts of a multi-generational IT workforce

Typical new entrants:

• Baby Boomers on part time

• Gen X technology enthusiasts

• Gen Y new managers

Typical exits:

• Retiring Baby Boomers

• Ambitious Gen X

• Work/life balance-seeking Gen Y

Supply

Workforce analysis

Replacement scenarios

Retirement projection

Skills forecast/inventoryDemand

32 Gartner EXP HR

The workforce plan enables IT organizations to manage skills supply against demand during times of

transition, such as Baby Boomer retirement and introduction of new technology and skills. The plan

starts with an assessment of the organization’s workforce demographics and skills composition.

Based on skills inventory and attrition analysis by demographic group, a projection can be made of

skills gaps and time frame. The retirement scenario plan then addresses ways of sourcing and

transitioning those vacancies to younger generations. The skills sourcing plan identifies the channels

and sources to be used to fill specific skill needs. The net result is a series of snapshots, initially

monthly and later quarterly, that can be used to plan how to address gaps in workforce supply.

Create a workforce plan

Tool: Workforce plan

Planning component Supply or demand? Complete (check)

Workforce demographic analysis Existing supply

IT workforce forecast/skills Demand

Skills gaps and attrition Demand

Retirement scenarios/analysis Future supply (options)

Skills sourcing plan:

• Skills hiring plan

• Skills development plan

• External service provider sourcing plan

Future supply (overall sourcing mix)

Transfer plan Future supply (retirement replacements)


Many organizations fail to conduct workforce planning. The result is that they do not know their

areas of vulnerability or how to address them. A deterrent in workforce planning is the time it takes

to create such a plan compared with the perceived lack of value of the exercise. The value of the

workforce plan comes in enabling the organization to build a pipeline of talent at various levels of

experience and responsibility. Skills continuity can be controlled rather than left in the hands of

unanticipated workforce attrition. To overcome the resistance to workforce planning, an abbreviated

plan with just the scenarios is needed to meet corporate planning requirements with a focus on only

the most critical skills and major demographic trends.

Case example: Develop a workforce plan to address workforce exposure

Retail

>1,000employees

Fortune 500 company

Global


Median age: 40


29–41: 36%

42–60: 55%

Over 60: 3%

Initiatives are in place to provide management with a good understanding of workforceexposure. A review of overall demographics will be followed by an analysis of functionalareas to ensure that preparations are being made for a changing future.

Output. A workforce plan to move people around and invest in hiring new people whilefunding remains available. Entrants come in but do not necessarily have a defined job.Once hired, they’re cross-trained on different things. The company finds out what theydo well and encourages their growth. Then, as people retire or move on, ready solutionswill be in place.

Business impact. From a global standpoint, a better job needs to be done in tappinglocal labor markets where the company does business around the world. While trying togrow the business in places like China, for instance, it may be found that there is a largeuntapped labor pool that may provide available IT talent.

Constraints. Even if recruitment is approved, there will be very few new hires each yearthat will be spread around—a maximum of one per IT functional area.

34 Gartner EXP HR

The demographic analysis can be used to show different views of workforce supply analysis that are

of interest to the organization. The results can be used to show challenges such as any adverse

impact of existing HR programs on workforce composition, competitive skill areas within IT, drivers of

turnover and other workforce planning issues. The age analysis is useful for identifying areas of

vulnerability, not only potential retirements but also other age groups which can be evaluated for

spikes in attrition. Gender comparisons help show how the challenges play out across the genders.

There may be more that can be done to prevent women from leaving the workforce after having

children. For example, providing part-time work opportunities to ease them back may be a solution.

Analyze workforce demographics

Tool: Demographic analysis

Grade Job family Seniority Gender Age Full retirement

AssociateJoblevel IT department Date of hire

Male/female

Date ofbirth

Date eligible*

B. Clark 17Applications development mainframe

11/1/06 M 8/13/46 8/13/2012

R. DeGood 15 Infrastructure mainframe 12/8/81 M 5/22/43 5/22/2009

G. Ellesmore 21Applications

development Web4/3/85 F 9/17/42 7/17/2008

A. Jackson 13Applications development mainframe

5/18/76 M 12/15/41 8/15/2007

N. Lewis 15Applications

development Web4/12/91 F 12/27/63 12/27/2029

P. Marks 19 Infrastructure Web 3/17/90 M 3/5/63 3/5/2029

T. Williams 14 Infrastructure Web 6/18/02 F 3/2/72 3/2/2038

Totals Service30+: 125+: 120+: 1

4M 3F Age 65+: 1

62–64: 2

59–61: 1

2007: 12008: 12009: 1

*Date eligible for full retirement is projected using the schedule published by Social Security Services(www.socialsecurity.gov)

Example:


The skills inventory is conducted to determine what skills are held across the IT workforce. It usually

entails individuals’ self assessment and validation by managers with cross comparison of standards

across the whole IT organization. The analysis leaves a variance that needs to be audited against tech-

nology forecasts and project requirements and then checked to determine how well the mix of skills

aligns with future priorities. Conflicts in allocating multi-skilled individuals who are in demand for more

than one project at once must be considered while also providing refresher training for those who are

rusty and need to bring their skills level up to the proficiency needed. The net result is a snapshot that

can be used, initially monthly and later quarterly, to plan how to fill gaps in workforce supply.

Assess workforce requirements

Tool: Workforce requirements analysis

Demand Supply (Gap) (Projected gap)

SkillForecast

requirementActual number of

staff with skill Actual variance

Variance+

Projectedattrition

AS400 45 35 (10) (12)

Cobol 35 22 (13) (14)

J2ME 25 17 (8) (9)

Java 10 15 5 2

Microsoft.NET 30 27 (3) (5)

UNIX 40 35 (5) (7)

Visual Basic 10 7 (3) (7)

36 Gartner EXP HR

Workforce plans should factor in three Baby Boomer retirement scenarios, inclusive of an assessment

of the probability of each occurring and answers to the questions that drive retirement scenario

planning. This approach is particularly helpful in planning for large organizations to overcome the

exposure of significant losses of skilled resources at one time. Such scenarios are for probability

purposes only. The Office of Personnel Management for the federal government, for example, has

found itself projecting more retirements more quickly than have actually occurred. This is due to

having been foiled by previous trends and changes in financial expectations of retirement-eligible

employees.

Assess exposure to skill loss

Create retirement scenarios to forecast Baby Boomer loss

Three retirement scenarios:

• Scenario one (worst case): All BabyBoomers retire on earliest dates

• Scenario two (most likely case): AllBaby Boomers retire on pre-agreeddates

• Scenario three (best case): All BabyBoomers defer retirement

How to build retirement scenarios:

• What positions can be easily filled internally?

• What positions can be filled externallywith manageable transfer and retiree asmentor?

• What positions will be challenging to fill,and what solutions are proposed?

• What are the consequences for exposurein the back-fill pipeline and how canthese be addressed?

Each scenarioshould addressthese questions


The retirement projection is a basis for managing the risk of losing critical enterprise knowledge. The

size of the risk is projected in terms of exposure to exits of Baby Boomers against available replace-

ment options. To quantify the assessment, the retirement scenario figures can be added to create an

overall exposure level after pre-allocated vacancies are filled. Percentage comparisons can be made

so that the threat of different timings can be contrasted in the same area. This provides a retirement

scenario comparison. Attrition projections can also be added to the projected number of retirements

to show overall projected exposure for the job group. This results in an attrition scenario comparison.

These two types of scenarios can then be contrasted across the workforce to show which are most

vulnerable and in need of greater attention for contingency workforce planning and skills development.

Manage risk of Baby Boomer loss

Tool: Retirement projection

Formula:

# of retirees – # of replacements = exposure level

Example:

Worst case scenario: all Baby Boomers retire ontheir earliest eligible dates

40 retirees in 2007 – 14 ready replacements = exposure level of 26 in 2007

Formula:

Exposure level / # of retirees = % exposure

Example:

26/40 = 65% exposure

Use these formulas to review the level of vulnerabilityto non-replacement of retirees:

38 Gartner EXP HR

A retirement analysis is useful also for forecasting ranges of people likely to leave by time period and

by area so that replacements can be determined. This type of analysis is most useful in large IT

organizations and functional areas with a large amount of staff where the size of the problem can

easily be overlooked. The analysis should be considered against the priority of work of the group,

not just urgency. For example, one question to ask is how important is this work to on-time delivery

of projects? Another might be, how does it impact reliability of services delivered? Such questions

that help assess impact are useful when determining where best to deploy scarce resources. The

analysis enables decision makers to make an informed selection of sourcing.

Tool: Retirement analysis

Retirement analysis assesses impact of Baby Boomer loss

Possible exit date(s) Most likely to retire Second most likely to retire

Impact to Web function

Impact to mainframe function

Jan. 2008 B. Smart (Applicationsdevelopment Web)

C. Miller (Infrastructure Web)

N. Turner (Applicationsdevelopment mainframe)

E. Patel (Applications development mainframe)

G. Stewart (InfrastructureMainframe)

H. Wilson (InfrastructureMainframe)

P. Callahan (Applicationsdevelopment Web)

N. Mc Neill (Applicationsdevelopment mainframe)

T. O’Donnell (Applicationsdevelopment mainframe)

F. Flemming (Infrastructuremainframe)

I. Sanders (InfrastructureMainframe)

-2 to -3 people -4 to -8 people

Feb. 2008 Names + jobs Names + jobs -1 to -2 -5 to -9

Mar. 2008 Names + jobs Names + jobs 0 to -2 -6 to -8

Q2 2008 Names + jobs Names + jobs -4 to -6 -10 to -12

Q3 2008 Names + jobs Names + jobs -5 to -9 -17 to -29

Example:


Review sourcing strategies for a mixed workforce

3

40 Gartner EXP HR

The IT strategy should provide a technology projection that in turn can be translated into a skills

forecast. By assessing short- and long-term needs, the right sourcing channels can be identified and

planned. In the short term, contractors are a useful solution particularly in prolonging the working life

of the Baby Boomer. Long-term sourcing options range from external hiring to internal growth and

development of those with potential. Where skills are no longer core to the organization, then an

external services provider (ESP) may have the economies of scale to be a reliable provider of those

skills. By making the best use of each sourcing channel, a continuous talent pipeline can be created

to align with the needs of the organization.

Create a portfolio of sourcing channels

Identify the channels for creating a multi-generational pipeline

Making source decisions

Align IT strategy with business strategy

Create technology/skills forecast

Assess short- and long-term needs

Use short-term sourcing options

Use long-term sourcing options

• Hire externally for skill gaps

• Grow/reallocate for areas ofexposure

• Use external serviceproviders for hard-to-find/non-core skills

• Hire contractors

• Engage consultants

• Redeploy resources from ITor business on temporarybasis


The sourcing plan is built around the skills gap analysis. The choices typically are to purchase

hard-to-get, longer-term, non-core skills from external service providers and fill short-term critical

skills with contract labor. The less hard-to-fill and not so significant gaps are more likely to be filled

through skills training where internal trainees exist and external hiring when appropriate internal

resources are close to depletion. The sourcing plan allows the workforce planner to compare the

merits of different sourcing scenarios. As circumstances change, the plan can be adapted. Having a

plan does not lock the organization in but allows alternative options to be identified and adopted.

Plan sourcing requirements

Tool: Sourcing plan

(Projected gap)Hiring

employeeHiring

contractorsSkills

development Outsourcing

SkillVariance +

attrition FT and PT* FT and PT*Training to

intermediate

External service

provider/offshoring

AS400 (12) FT 5 FT + 2 PT 0 6 FT 0

Cobol (14) FT 1 FT 1 FT + 2 PT 3 FT 8 FT (ESP)

J2ME (9) FT 4 FT 0 5 FT 0

Java 2 FT 1 FT 0 1 FT 0

Microsoft.NET (5) FT 3 FT 0 2 FT 0

UNIX (7) FT 1 FT 0 1 FT 5 FT (ESP)

Visual Basic (7) FT 2 FT 0 1 FT 4 FT (Offshore)

*For the purpose of headcount calculation, 1 PT (part timer) = 1/2 FT (full timer)

42 Gartner EXP HR

Recent research has shown a shift in IT hiring trends. Until recently, it seemed that opportunities for

business graduates to join IT directly out of college would never become acceptable to the more

technically minded IT hiring manager. Trends now show entry-level and career routes are opening up

to business school graduates and staff from non-IT business departments, and through business

analysis and other less technical IT roles. The business career has been slowly recognized as a way

into IT. However, with the call for IT now to be closer to the business, create business value and

communicate more in the business’s own language, the merits of a business education equal those

of the more technical.

Create a flexible hiring process

Review hiring criteria so that channels can be selected to bring in Xs and Ys

Federal government

Not available -revenue

197,000+employees

13,000+ ITemployees

Canada



29–41: 65%

42–60: 30%

Over 60: 2%

External hiring requirements

A review of requirements means that in the future, the criteria for external hiring will change:

University education will be encouraged

MBA qualifications may be required

Management training will be expected to be part of the curriculums in IT fields

Candidates will continue to be very well trained in the area of IT

Implications for Generations X and Y

Raising standards means that although Generations X and Y may be more educatedthan the older workers, they will need also to be educated in the right areas to be successful in the job.


Deferred retirement Baby Boomers offer a viable, ready now resource. Workers over 55 are the

fastest growing segment of the workforce and by 2015 will be 20% of the overall workforce. Surveys

suggest that most will still be available for work after retirement age for financial reasons and to stay

active and maintain a social network. Generally, they say they want less responsibility and prefer a

change of employers. Most want flexible schedules or larger chunks—up to six months—of time on

and off, which suits both project work and the contracting model. Organizations using such a model

get to hold Baby Boomers long enough so that knowledge can be retained and transferred while

replacements are recruited.

Use contracts to enable Baby Boomer retention

Use individually designed contractor relationships to enable Baby Boomer retention

Organizational needs Contract-based employment strategies

Experience and know-how as required • Project-based contracts

• Flexible, part-time work

• On-call arrangements

Retention of knowledge of the people, the organization and the work

Create alumni lists and keep in touch with alumni. Start a“return” program with procedures for retirees to remain availableincluding part time. Offer stimulating work that meets needs forsocial contact.

Temporary full-time replacements asvacancies arise

Offer menu-driven package with benefits relevant to individualneeds and avoid duplicate costs. For example, savings andhealth balanced with cash.

Transfer of knowledge Use older workers as trainers and mentors including withyounger workers

Ongoing availability for new assignments Offer stimulating roles, interesting and meaningful work, a congenial workplace, opportunities to learn new things and growpersonally, and the chance to work with a variety of colleagues

Adapted from: Melymuka, K. interviews Robert Morison, “Workforce Crisis,” Computer World, July 3, 2006

44 Gartner EXP HR

On-call arrangements enable the transition of knowledge from Baby Boomers when they retire. The

arrangements are highly flexible. With cell phones, on call has become much less restrictive than in

the past. The on-call arrangement is equivalent to placing the individual on a retainer for specified

times on specified days. The arrangement encourages the individual to transfer knowledge to those

who now must assume responsibility and ensure they are equipped with the expertise needed to

transition successfully. It is in the best interest of both the organization and the individual to minimize

the use of calls for emergencies only and select planning meetings where experience is needed.

Case profile: Use on-call contracts to safeguard Baby Boomer expertise

Case profile Legacy replacement initiative

“We deliberately hired people with broader skill ranges who were more COBOL–Java orientedto work as needed on legacy systems. Additionally, we keep one retired Baby Boomer as aconsultant and pay him a retainer—a fixed rate on a per-monthly basis and if we use him,great, and if we don’t, it’s his to keep. We’ll do that for about a year as we decide what to dowith this application. We don’t want to lose the older Baby Boomers’ knowledge and expertisewith the system.”

Quotation attributed to senior director, IT applicationsIndustrial


The transfer plan is a back-up plan for retiring Baby Boomers. It can be used to determine how to

use Baby Boomer resources after retirement, including who to: approach to extend their dates of

scheduled retirement, offer an on-call arrangement or work on-site as a contractor. At the same

time, the plan can be used to identify opportunities for replacements from other sources, particularly

internal new skills development for those interested in working on legacy systems—an inevitable

requirement at some point if those systems are to remain in use.

Develop a transfer plan for retiring Baby Boomers

Tool: Transfer plan

RetireePossible exit

date(s)Replaced by ?

(Date 1)Replaced by ?

(Date 2)Knowledge

transfer Post-exit role?

A. Clark Applicationsdevelopmentmainframe

March 2007–March 2008

3/1/07:G. Forbes

3/1/08: S. Parr

Formal training+ mentoring

On-call role for6 months

T. Jones

Project manager

March 2007–August 2007

3/1/07:N. Meyers

8/1/07:Recruit

Project assignment

On-site contractor

(1 year)

D. PatelAnalyst

August 2007 8/1/07: P. James

Job rotation None

46 Gartner EXP HR

The multi-generational talent pipeline is likely to be fueled in part by external hiring. Most

organizations are over reliant on advertising, such as through relevant print media and the Internet.

The competition is high, and so organizational branding that appeals to targeted candidates is critical.

Those who are serious about creating a talent pipeline should use a multitude of channels for hiring.

Relationships with local institutes of technology and chapters of professional associations help hiring

managers to network with candidates. Organizational alumni can be sent copies of company

newsletters, so that they stay interested in the organization and can be approached to rejoin. Internal

candidates from the business are also worthy of consideration.

Source from external channels

Create multiple external hiring channels

Intern programsProfessionalinstitutions

Business staff

Business and technology colleges

Advertiseand search

Alumni Branding


Rebranding means creating an image that encourages interest in the organization. Jobs in them-

selves may seem similar to all the others on the Internet with equivalent job titles and even similar

technology. Branding creates differentiation and gives job candidates insight into the organization

itself. The unique culture and comprehensive benefits that meet the aspirations of younger

applicants—including tuition reimbursement, the growing business operations and opportunities to

learn a variety of new technologies—all create competitive advantage in a tight employment market.

Opportunities outside IT, such as in the operations group of the retail organization in the case

profiles, entice IT people to stay and non-IT people to come into IT to learn transferable skills. This

includes, for example, project management.

Rebrand to help recruitment

Case example: Rebrand to help entice Generations X and Y recruitment

Business services 1

$30 - $40 billionin revenue

200,000employees

5,000 ITemployees

220 countries

IT agedemographics (as of 12/06):


29–41: 39%

42–60: 55%

Over 60: 2%

Rebranding the organization for a new recruitment market

Research into recruitment sources shows that the external pipeline for Gen Y and Gen X is mostly based on informal referrals and social networking from established employees.Technology provides a means to capitalize on each person’s “six degrees of separation”from everyone else. Individuals who have gained experience in the workforce recommendthe company and its interesting careers and updated technologies to a network of peoplethey know and trust. They enable the company as an employer to tap into these sources,using technology to help organize the different links between people.

Benefits

• New recruits come and stay with the company, reducing turnover and retraining costs

• With effective career development, Generations X and Y remain stimulated and challenged by interesting technologies while providing a mature understanding of the business

• Cultural fit is high

“One of the slogans we had for Gen X was, the average individual has eight careers in alifetime, and this is according to the Department of Labor. Our view is, ‘why not have allof them here?’ ”

Quotation attributed to director, recruiting

48 Gartner EXP HR

Organizations whose goals include creating a pipeline that provides them with talented youngsters

should look to local educational colleges, both institutes of technology and business schools. By

providing learning experiences for students, both part-time and during the school breaks, the

employer can assess the individual for long-term employment while at the same time allowing the

individual to evaluate his or her own fit with the employer. College career officers listen to feedback

from students and make objective recommendations about organizations that are likely to be the

best fit. The result can be a long-term relationship that provides a source for the young to enter the

talent pipeline.

Find ways to hire Generation Ys

Case example: Network with educational institutions to meet hiring needs

Retail

>1,000employees

Fortune 500company

Global


Median age: 40


29–41: 36%

42–60: 55%

Over 60: 3%

Hiring younger employees through a pipeline fueled by educational institutions

Internships. The internship program and college recruiting have been beefed up.Promotion is from within and people are encouraged to move up. Recruitment is focused atthe bottom, where new blood is brought in. The internship program is designed to hire afew younger people every year. Through liaison with schools based on geography andalumni, the company recruits from regular liberal-arts-type universities that act as feedersand also from specific institutes of technology programs. The relationships with specific,well tried and tested schools provide assurance of a consistent base curriculum.

Filling vacancies. Few are hired at entry level. The company looks for graduates with ITdegrees, but the graduate pool has shrunk. A preference has grown for the business person who happens to focus on technology, not technologists. The old “hide-in-the-cubicle” type jobs are gone and so the energetic and dynamic, extroverted, risk takerswho interact well with others make a better fit. However, for credibility and becauseolder generations did it, new hires must work on infrastructure or development workfirst. For project management and business-relationship management, seasoned peoplewith at least 5 to 10 years of experience are better suited.


Gartner EXP conducted research among CIOs on how they will fill their vacancies in coming years.

Two-thirds of those who responded to the 2006 annual CIO agenda survey said they would rely on

external recruitment from other organizations rather than grow their own. The result is a loss of

entry-level jobs and opportunities for younger generation workers who would otherwise be

interested in IT as a career. Now some organizations, especially those who are starting to experience

the pain of losing an aging workforce are reintroducing selective entry-level jobs as part of their

strategy to entice younger workers and their commitment to a blended workforce.

Case example: Reintroduce positions at entry level

Manufacturing 1


60,000employees

1,300 ITemployees

70+ countries


Average age: 48


29–41: 21%

42–60: 71%

Over 60: 6%

Collaboration between young and senior employees

A need to create a talent pipeline of younger people led to the launch of a small field programto attract them. Each new entrant is assigned a mentor, a senior person whose role is toshare how to get things done in the organization. This has served extremely well as arecruitment vehicle as well as a practical use of the expertise of more tenured individuals.

Candidate profiles

The new hires all have master’s degrees and about two to three years work experience,and are in their late 20s and early 30s. They come into the internship program for aboutsix years.

Assignment-based learning

While on the program, they participate in three to four very different assignments. Forexample, they might first work in a plant site right on the shop floor, in IT systems and ina core competency like telecommunications or applications, then in a group that is driving a major corporate initiative and, finally, in a business unit.

50 Gartner EXP HR

Internal rotation programs are ideal for bringing Generations X and Y into the talent pipeline. Some of

these programs now provide a means for business staff to transfer into IT after demonstrating both

an interest in the systems used in their business and basic technical appreciation. They can continue

to leverage their business relationships and become a champion for IT projects in their business

areas. Similarly, IT staff can accelerate their careers through increased business exposure. IT people

often bring to the business much desired project management and innovation skills, for example, by

creating and planning new solutions using technology.

Rotation programs

Case example: Create IT/business intern rotation programs that lead to recruitment

Manufacturing 2


38,000employees

900 ITemployees

Approximately60 countries

IT agedemographics:

Not available

The challenges

A senior population across the company whose skill sets tend to be legacy based and notas current as desired

Attracting and retaining more Ys into their workforce as Baby Boomers start to retire. Thegap is seen on the supply side.

Approach

Recently, recruitment has taken place for a rotational program from a business college.Candidate interviews were conducted at a university with whom the organization has arelationship. The focus was on those with an IT background who wanted to pursue an ITmanagement career.

Competitive edge

The company was well positioned to compete for scarce graduates. Prospects wereenticed by the company’s promise of relevant career development and training opportunities which would support candidates in growing quickly.


Another rotation program making a comeback is the IT intern program. IT interns are the equivalent

of the apprentices for mechanical and electrical engineering. Intern programs take various forms.

Some guarantee a job at the end of the internship; others are more competitive, only hiring a

proportion of their interns into vacancies. The cost of the program is funded by having junior

associates available to undertake activities that require aptitude more than experience. Ideally, the

program provides a variety of exposure to technology and business, and is planned to enable

participating individuals to build a breadth of skills in a range of predetermined areas.

Case example: Reinstate internship programs to replace Baby Boomers

Manufacturing 1


60,000employees

1,300 ITemployees

70+ countries


Average age: 48


29–41: 21%

42–60: 71%

Over 60: 6%

Revitalizing the internship program provides a pipeline of talent

The program consists of 20 to 30 people at any one time. The last two or three years, hiringlevels have been limited to below five. However, an ideal year would be up to 10, becauseanother five to 10 are rolling off. Through internships, young high potentials build breadth ofexperience and come out with a significant learning experience. In the final year of the six-year program, they need to find a permanent position. Many go to the areas they likedworking with and interview for their preferred role.

Benefits

Although inexperienced, interns ask useful ‘what if’ questions that help create objectivity

Retention is close to 100% with only the occasional participant who leaves

Leaders have such high regard for this program that generally the number of offers hasto be limited to just two or three

52 Gartner EXP HR

An alternative to recruitment from outside of IT is to grow people within IT. This means having clear

career paths, usually structured using job family competencies and a career-based organizational

structure. Career paths provide opportunities for job rotation. In the past, job rotation was within

large job families. Now, job rotation is more meaningfully applied across job families. These provide

technical and business skills for both Generation X and Y associates. Rotation can also be used for

developing leaders, a challenge for many organizations as they look to develop Generation Xers to

replace Baby Boomers in management roles.

Grow and reallocate to create a pipeline

Create multi-generational pipeline through effective career development

Career paths Leadership development

Job families

Applications development

Project management

Leadership

Junior developer

Developer Seniordeveloper

Developmentconsultant

Project leader

Projectmanager

Senior project

manager

Programmanager

Job rotations

Project management

Project leader

Projectmanager

Senior project

manager

Programmanager


Juniordeveloper

Developer Seniordeveloper

Developmentconsultant


Project management


Waiting for job vacancies to arise is too reactive to be a compelling strategy for developing people.

Career development needs to be planned so that people develop the right skills to meet organiza-

tional needs. One way to accomplish that is to identify the series of roles that individuals need to

perform to grow. Flexible job levels enable managers to move people between jobs at the level of the

experience they bring. Transfers and promotions for those with high potential can be planned without

necessarily posting the jobs or waiting for vacancies. The plan can also be used to drive short

strings of moves for development purposes with numbers controlled to prevent the chaos of

everyone moving at once.

Create career paths for integration

Create career paths that integrate multiple generations across the IT functions

Vendormanager 1

Programmanager

Projectcoordinator

Contractadministrator

Job family career path structure

Vendormanagement

Programmanagement office

Business relationship manager 1Level 4

Level 3

Level 2

Level 1

Businessanalyst 3

Businessanalyst 2

Business

analyst 1

Contractmanager 2

Contractmanager 1

Projectmanager 2

Projectmanager 1

Business relationship management

54 Gartner EXP HR

Job rotation programs are ideal for providing the variety of on-the-job experience needed for career

development. The program can be split by levels of experience, and each group transfers between

jobs of similar levels over a four-to-12 month time period. Those who are successful then move up

to the next job level where they may continue on or later rejoin the program. This continues up to

leadership roles. As individuals cease to benefit from job rotation, such as when their career goals

are aligned with their assigned department, they may exit the program. People opt in and out

according to the needs of their careers and their demonstrated potential. The process provides

opportunities across the generations simultaneously.

Case example: Use internal job rotation to appeal to cross-generational needs

Manufacturing 2


38,000employees

900 ITemployees

Approximately60 countries

IT agedemographics:

Not available

Job rotation candidates

The target is to place into the program persons who have three to seven years of ITexperience. The program is open to internal candidates who are among our best andbrightest. The program recruits qualified external candidates with particular emphasis onIT-oriented MBAs.

Program content

The three-year rotational program comprises assignments, each lasting 12 months. Thecompetencies to be developed are pre-defined and developed through formal training,mentoring, networking opportunities and exposure to executives. Participants’ experiencein the program is designed to meet individual needs. For example, those from infrastructure will be offered experience in other functions to round out their IT skills. Atleast one of the three rotations must be in a different business unit in order to developcross-business knowledge. Direct exposure to the business helps maximize their business skills. To graduate, individuals must be green belt certified in Six Sigma, theorganization’s quality program.

Benefits

High potential candidates appreciate such opportunities and the consequent recognition.The approach appeals across generational lines—as much to the Ys as to those whoare more tenured in their careers. The organization gains from low employee turnover,breadth of skills and bench strength for succession.


Internal job rotation programs may also be used to enable Generation X to fill the gaps left by retiring

managers. Many Xers have focused on technical career paths at the expense of developing

managerial competencies. Hence, many fail to show leadership potential. Xers who have shown

success as project managers may move on to lead teams of their own. Another route is to follow the

approach used by this government organization, which is preparing to replace Baby Boomer

managers by providing experiential leadership development through a program of rotational

assignments.

Case example: Develop leaders to replace Baby Boomer managers

Federal government


197,000+employees

13,000+ ITemployees

Canada



29–41: 65%

42–60: 30%

Over 60: 2%

Job expectations

Replacing Baby Boomer managers meant revisiting the job profile. There was found to bemore need for:

Increased management versus technical skills

The capability to run major projects

Candidate shortages in replacing Baby Boomers

Despite having good people with good management skills, the more senior/executivesearches resulted in few candidates with the necessary leadership skills. Analysis isbeing conducted into the reasons why.

Leadership development

The leadership development program is being revamped to develop people to qualify ata higher level, manage well and help set the profile of the future CIO. Also, partneringwith other leadership development programs has been adopted to create a wider per-spective of leadership. Partnership with other general leadership development programsin the organization means that candidates can rotate through assignments that are out-side their field, including bringing non-IT people into IT and vice versa.

56 Gartner EXP HR

A common reason given for the lack of Generations X and Y in the IT workforce is that most of their

jobs were transferred to external service providers (ESPs). Three ESP models of are used with preva-

lence for sourcing a generation-diverse workforce, independently and in a hybrid fashion. One model

is for members of Generations X and Y to be transferred to the ESP and continue to work

with the client organization. They may be hired back when ready for more responsibility. A more

independent ESP model is to be co-located or based in a center of excellence. The team is formed

of existing staff from the provider but no transferees from the client organization. An offshoring ESP

model provides premium skills at significantly lower cost.

Source skills from external service providers

Source the expertise being developed by ESPs/offshore sources

ESPs may be a prime source for future IT vacancies

ESP with staff initially transferredfrom the host organization (idealfor balance of business and technical knowledge)

Onshore ESP with ESP staff (ideal for technicalcapability and some knowledge of business)

Offshore ESP (for remoteworkforce)


ESPs are becoming a source for skills that are in short supply. The challenge of deploying such skills,

particularly among Generations X and Y, may be easier for an ESP to conquer because of

economies of scale. Offshore providers can be used to help defer the timing of those skill shortages

and to reduce the costs of hiring for premium skills. However, with the growth of Asian “tiger

economies,” the ability of developing countries to provide lower cost labor to meet U.S. needs will

eventually become impossible. U.S. firms must at some point find ways of re-establishing their ability

to meet their own demand.

Case example: Source ESP resources to cover skills gaps

Retail

>1,000employees

Fortune 500company

Global


Median age: 40


29–41: 36%

42–60: 55%

Over 60: 3%

ESP fills skills gaps

“Pieces of our IT infrastructure were outsourced a few years ago, resulting in the loss of themost rapidly-aging population to a partner. While we still have accountability for our agingworkforce, this served to lower our median age and provide us with a critical back-up plan.The outsourcer must address the issue directly, but we still consider it a shared risk.”

Quotation attribured to HR director, global IT

58 Gartner EXP HR

XXX


Integrate the multi-generational workforce

4

60 Gartner EXP HR

The differences between the generations need to be understood without stereotyping and with

respect between groups. Each group has its own preferences. Baby Boomers may question the

types of cars that other groups drive and their insatiable need to be connected by mobile phones.

Others, in turn, may be frustrated by Baby Boomers’ preferences for face-to-face contact when

instant messaging would seem more efficient. By encouraging each group to understand the other,

these differences become trivial when compared with the potential that stems from combining their

different strengths and common values to achieve a common purpose.

Respect differences and play to strengths

Create an environment that respects differences and plays to strengths


Most IT organizations have a generation gap, or at least a poor understanding, between the mature

workers at leadership and senior professional levels and very young workers (Generation Y) who are

still learning and questioning the status quo, and who bring new attitudes even toward the technology

itself. Having grown up in the digital age, Generation Y is also known as “digitally native.” They bring

a solid understanding of the modern surging consumer market for electronic communications. An

integrated workforce builds on differences and harnesses the strengths of each generation, involving

them in sharing their passions and ideas to create robust solutions.

Create an integrated culture across generational lines

Recognize the implications of generational differences

Population group/considerations




Strengths IT expertise. Tenure. Quick to learn. Workswell in team environments.

Versatility. Agility. Strong desire to learn.

Challenges Adaptability to constantchange in IT and virtualwork environment

Getting engaged andinvolved in finding newways to get work done

Having long-term commitment to theorganization

Implications for workforce integration

Invest, retain and recruitdue to high numbers inthis category

Provide experientialassignments in teamwork and leadership

Require coaching in business protocol. Designcross-functional careerpaths for variety in experiences.

62 Gartner EXP HR

The culture needs to be open to all viewpoints. Generation Ys particularly have invested personally

and financially in their education and in fulfilling a demanding personal schedule in their early years.

In the workforce, they expect to be involved and have their contribution valued in the same way as

at school. Task forces and other forms of committee are ways of inviting multiple contributions and

appeal to their naturally collaborative nature. Rarely must they be asked to seek the participation of

others. Their ability to bring fresh new perspectives can help them cut through problems that the more

experienced have long been unable to solve. Adding other generations to these groups, especially

Baby Boomers or Generation Xs as leaders or experts, can improve the quality of the outcome.

Case example: Create programs that play to inter-generational strengths

Education

$3 - $5 billion inrevenue

20,000employees

300 ITemployees

1 U.S. state

IT agedemographics(as of 12/06):


29–41: 37%

42–60: 52%

Over 60: 4%

What is a FAST Team?

The Framework for Administrative Systems and Technology is a J2EE framework developed by case participants. FAST contains a large library of reusable modules thatcan be assembled to build applications.

How are multi-generations blended and allocated in such a way to benefit theorganization?

“We need a diverse group of skills and personalities to be successful—from the innovativerisk-taker to those with mature experiences. The best way to blend these skills is through amulti-generational team. For example, we have a team called FAST that is responsible forshortening delivery cycles. The team designs, develops, and implements a process in just afraction of the time normally required—often as much as 80% faster. The group is comprised of some under-30-year-olds who absolutely love to have their opinions heard,and they love to be involved and to have impact outside their immediate area. This team isled by a Baby Boomer.”

Quotation attributed to HR director


The employee turnover that can arise from conflict due to generational differences needs to be

prevented. Turnover is expensive when the costs of replacing and retraining critical knowledge and

skills are added. The disengagement that comes when there is insufficient cover to perform the work

compounds these costs. Successfully blended organizations deploy strategies that enable individuals

to contribute beyond traditional boundaries and seek the collaboration of others. Through such

initiatives as mentoring, job rotation, training and diverse hiring, the culture becomes one that listens

to and shares multiple perspectives. Such an environment, coupled with financial incentives, is high

on retention. It is a challenging and exciting place to work.

Identify strategies for improving multi-generational integration

Area of concern Assessment Strategies for action

Retention Impending retirements and voluntary attrition rates

Stay-on bonus to slow unwantedattrition

Under-capacity of BabyBoomers

Skills proficiencies and changecapability versus needs

Continued training and job rotation

Pipeline: lack of younger workers Structure/process for young workers to join early and grow

Create entry levels withtraining/career ladders

Knowledge transfer to youngerstaff

Baby Boomer skills transfer toyounger workers

Mentoring/process documentationinitiatives

Succession Back-up plans weighted by vulnerability

Leadership review of successionplans

Intergenerational understanding Productivity by age difference.Climate/behavioral harmony.

Diversity programs that encouragerespect

Age bias Age analysis by work area Job rotation and hiring a mix ofages

64 Gartner EXP HR

Analysis of the case profiles showed that the multi-generational blended workforce was the result of

cultural fit. Emphasis was placed on the mission, vision, values, behavioral competencies (drivers of

superior performance) and development activities. These elements alone encouraged diversity and

respect for generational differences. Selection was partly through a structured hiring process and

also self-selection. It was found that where people fit the culture, reinforcement would naturally occur,

and they were more likely to join and stay. When there was a gap between individuals’ expectations

and the culture, they were apt to self-select themselves out and seek alternative employment.

Create cultural drivers that ensure multi-generational diversity

Mission and vision

Common direction and purpose

Values

Shared behaviors and ethics

Behavioral competencies

Drivers of superior performance

Recognition

High standards

Cultural drivers

Blended workforce

Multi-generational workforce members


Behavioral competencies have proven indispensable as a tool for setting behavioral standards that

drive career development across the organization and within specific job families. Also, competencies

can be aligned with the organization’s values so that associates know how to relate to each other.

Diversity means mutual respect and can be prescribed in terms of how to get the best from people,

irrespective of difference. The types of behavioral standards that create harmony and an integrated

culture include: non-judgmental listening, sharing ideas and experience, offering solutions to

problems, recognizing the input of others and taking measured risks.

Case example: Use competencies to set behavioral standards for multiple generations

Retail

>1,000employees

Fortune 500company

Global


Median age: 40


29–41: 36%

42–60: 55%

Over 60: 3%

HR initiatives are founded upon competencies for hiring and developing people

Core competencies. None are technical: change orientation, communicating effectively,continuous learning, customer focus, driving to excel, accountability, problem solving,teamwork and values, and respect for others.

Functional competencies. Profiles for major jobs of multiple incumbents show how thecompetency requirements change to fit with the function and level of the job. For example, project management builds competency in budgeting, estimating and vendormanagement.

66 Gartner EXP HR

Having selected a multi-generational workforce and finding that employee turnover is low, initiatives

can be implemented to raise standards from what may be described as passive tolerance to more

actively embracing differences in the workforce. Training and development, performance management,

employee benefits and cultural change initiatives are human capital management (HCM) processes

that can be aligned and used to encourage open dialogue and understanding of expectations in the

workforce while improving employee retention. It is hard to leave an organization that shares the same

priorities as the individual.

Align human capital management programs

Ensure HCM initiatives support the diversity of a multi-generational blendedworkforce

Training and development

E-learning

Diversity training

Mentoring

Management development

Business exposure

Values activities

Performance management

Task forces

Employee benefits

Teleworking

Blended workforce

Cultural drivers

Multi-generational workforce members

Culturally aligned initiatives


Diversity programs can be used as a segue to opening dialogue and getting the best out of people of

different generations and backgrounds. Performance management can be used to encourage

discussion, particularly in a mature organization where behavioral competencies and values are

established. Diversity training in most organizations has yet to incorporate age difference. Creating

cross-functional diverse teams to work on business-wide issues can have the long-term benefit of

opening dialogue between generational groups. Personal style questionnaires such as Meyers-Briggs

can be interpreted to help group members appreciate the strengths of the differences within the team.

Devise HCM initiatives that encourage diversity

Invest in HCM programs that blend the multi-generational workforce

Case profile HCM initiatives

Use of existing processes to drive change and hire the best fit.

HR programs: performance management and enforcing values and organizational competencies.

Values-based networking initiatives involving all employees are spearheaded by leadersthroughout the organization. Diversity training explores how people think, the way peoplework together and personal work styles. Women’s networks are open to men. Developmentplans are encouraged that include understanding of other cultures and religions.

Using diversity of styles in teams and networks to create internal involvement in addition toexternal experts. A component of major projects is to engage a broad cross-section of theorganization in helping to develop new solutions. Ideas are underpinned by use of kaizen (themantra of standardize and simplify, Six Sigma). Leaders are held accountable for team building and creating an environment that observes the core values.

Businessservices 2

Manu-facturing 1

Financialservices 2

68 Gartner EXP HR

The foundation for a continuous blended, diverse culture lies in having managers walk the talk. Some

organizations are tackling managers’ abilities to manage diversity through training programs that

include diversity in their content and through other forms of leadership development such as

mentoring. Public recognition helps reinforce and bring to life the right behaviors through example.

Specifically for members of Generations X and Y, video-conferencing technology and e-learning

methods are being more frequently introduced so that changing communications and learning styles

are being addressed. Employee benefits such as remote working and teleconferencing also help

meet this need.

Invest in HCM programs that blend the multi-generational workforce (continued)


Now using very sophisticated video conferencing equipment to reduce travel for theGenerations Xers; collaboration tools have also been added. The Government of Canadatraining school has adopted e-learning to fit the learning styles of Xs and Ys. Because groupinteraction is required for management training, it remains classroom style. The partneringwith other leadership development programs means that participants come from multifunctional backgrounds.

Excellent diversity training exists. There is a need to develop training around generational differences.

Management programs include the American Management Association five-day+ program and mentoring to help new managers learn good habits despite some examples of poor management within the organization.

Awards: Showing the right behaviors (walk the talk), innovation and recycling ideas are amongthe types of awards used in IT to reinforce the desired behaviors.

Retail

Industrial

Federalgovernment


Training and development programs can be an enabler as the composition of the workforce transitions

from a high Baby Boomer population to a mix of generations. One way is for all training to be aligned

with the respective needs of each generation. For example, options should be offered for classroom,

primarily for Baby Boomers, as well as e-learning for the younger generations. Also, the chunks of time

to be devoted to training must fit varying attention spans. Underlying messages must be respectful to

all. This is particularly true of training that is directed toward creating inter-generational awareness. Such

training must avoid reaffirming negative stereotypes about different generations.

Training and development addresses generational needs

Invest in HCM programs that blend the multi-generational workforce (continued)


Individuals are expected to take responsibility for their careers. They need to keep expandingskills.

Baby Boomer reactions. Despite repeating the message that survival and success requireup-to-date skills, not all Baby Boomers have responded. Even in IT, they still look for class-room training. Only if it is a simple, quick hitter, are they willing to learn online.

Younger workers. Generation Y takes well to virtual learning. Generation X is in between, butthe younger they are, the more they can truly learn and benefit from virtual learning and virtualeducation.

Not being a technology company makes retaining younger workers a challenge. Initiatives thatbuild skills and secure retention include:

Job rotation. Opportunities for the involvement of young professionals have come throughoffering transfers between the business and IT.

Skills development. Young people come to IT to acquire project management skills becausethe skills are in demand across the organization. Also, interest in working in IT has grownthrough process leadership, and so a move from a technical project leadership role to a business leadership role makes sense. Similar skill sets are in demand for both career paths.

Retail

Manu-facturing 2

70 Gartner EXP HR

Organizations are also looking more at how to create benefits programs that make the work

environment more flexible, and therefore more able to attract and retain a diverse workforce.

Generation X sees the benefits of work/life balance (both men and women), and so flexible work

arrangements including telework are attractive to them. Another area of flexibility is part-time work,

which is now seen as a way for Baby Boomers to return to work. However, they expect parity for

their experience and not to be seen as second-class resources. If benefits programs can be offered

to meet the financial needs and preferences for each age group, the probability of retention should

increase.

Benefits programs offer flexibility and choices

Case example: Review benefits plans to meet the specific needs of each generation

Retail

>1,000employees

Fortune 500company

Global


Median age: 40


29–41: 36%

42–60: 55%

Over 60: 3%

Younger generations

The younger generations adapt more readily to a virtual office, while some of the oldergeneration prefer the discipline and social environment of the physical office. A virtualworkplace is one in which individuals may come into an office only rarely. Gradually, theyand their colleagues gain comfort with the new ways of working.

Retirees

After they retire, Baby Boomers may want to work part-time. In the U.S. system, thereare complications with Social Security. Tax on pensions restricts the number of hoursthey are encouraged to work; yet they still need various insurances, including medical.

Benefits options

The HR benefits group is studying what appeals to each generation. The old cafeteria-style plans, in which people selected by need and cost, failed to catch on because ofthe administrative burden. Under consideration is for benefits to be structured more intoplans where people may have greater freedom to select what best meets the needs oftheir generation. For example, those in their 20s, may trade certain types of insurancefor cash.


Teleworking still meets resistance from Baby Boomer managers. They continue to fear a loss of

control. Their concern is that less time will be spent on work, and the social interactions between

people that help move business along will be impeded. However, studies show that people who

have a teleworking option work long hours and are more productive because they have fewer

interruptions. Teleworking can be integrated into a solution that meets the preferences of all

generations. A virtual office arrangement can be balanced with regular, planned face-time spent with

manager and team members in a physical work location. The result is that opportunities for social

interaction complement personal and work productivity.

Teleworking offers flexibility in meeting generational needs

Case example: Provide teleworking opportunities where preferred

Federal government


197,000+employees

13,000+ ITemployees

Canada



29–41: 65%

42–60: 30%

Over 60: 2%

The benefits

Both mid-career professionals with heavy personal commitments and organizations whostrive for flexible work arrangements can benefit.

Gen Xers prefer not to relocate, even for better jobs. They seek an employer who allowsthem to balance work time with personal and family life.

The employer gains increased flexibility and reduces employee turnover by havingteams that work equally effectively together despite being based in different physicallocations.

Virtual teams

Technology now makes virtual teams possible. Team members can collaborate on projects and operations, using technology to its full advantage.

72 Gartner EXP HR

To create an integrated culture or work environment for a blended workforce requires all HCM

programs to be well aligned with the organization’s mission, vision, values and behavioral

competency standards. In navigating the culture to meet the expectations of a multi-generational

workforce, it helps to review the organization’s policies and programs to ensure sufficient flexibility for

supporting the creation of a blended workforce. They need to be competitive and therefore are likely

to drive retention. They also must be cost effective in that the right efforts are directed toward the

right groups of people. A climate survey can be a useful tool for procuring feedback on the

programs, as can focus groups made up of members from homogenous age groups.

Assess HCM programs to improve alignment

Tool: HCM policies/programs assessment

Policy/program

Expectations by generation StatusR/Y/G*Baby Boomers Generation X Generation Y

Employee insurance/savings benefits

Competitive current/retirement medical.

Maximum employer contributions to savings.

Contribution options.

Family health coverage.

Low contribution.

Opt out for cash refundsat time of resignation

Work/lifebenefits

Enables women to createa predictable routine

Efficient organized worklife that balances withfamily life. More time athome.

Shorter time at work balanced by working offhours at home

Employee involvement

Stimulating work that recognizes high expertise

To be noticed and givenbetter opportunities

To contribute and be valued and heard

Diversity training

Refresher in expectationsand gain awareness ofyounger colleagues

To understand changes inthe workforce mix

Help to bring age awareness to high level of ethnic/cultural diversity

Recognition Private or public asthanks for building highexpertise

Public to increase opportunities of advancement

Public to show contribution

*R/Y/G = Red (much work still to do), yellow (program can easily be improved), green (all bases are covered)


The HCM policies and programs that are not addressing harmony and retention of the workforce

should be reexamined and redesigned appropriately with the involvement of employees from the

various generational groups. By involving respected champions from the different age groups,

proposals for change can be raised; opinions can be heard and applied to prioritize funding when it

is insufficient to meet the needs of every group. For some of the programs, such as leadership

development, the IT leadership team needs to take responsibility for setting direction. This includes

ensuring that the direction provided by each member of the senior leadership team is consistent and

communicated in ways that will be fully understood by participants.

Tool: HCM policies/programs assessment (continued)

Policy/program


Training anddevelopment

Classroom/group style.Like to be mentors. Builddeep expertise in area ofknowledge

E-learning that supportsbreadth and depth withtests to demonstrate ability

Low profile with emphasison self-directed learning,breadth of learning andfun, such as video games

Performancemanagement

Cynical. Minimize timespent on it.

To demonstrate successesand negotiate rewards

Feedback and opportunityto discuss learningopportunities

Compensation Fairness is key.Compromise merit payjust to survive.

Competitive and key toretention

Year-on-year, high-endimprovement

Culture Interactive. Clear hierarchy.Meet the expectations ofothers who depend onthe work.

New opportunities, innovation and risk withrewards to match

On-the-job learning andopen forums to addvalue. Interesting workwith minimal supervision.


74 Gartner EXP HR

XXX


Executive action plan

5

76 Gartner EXP HR

Best practices

A review of the case profiles and secondary research in this report revealed best practices for effec-

tively managing and integrating the multi-generational workforce. These best practices can be used

in conjunction with the recommendations and tools included in this report to create an

executive action plan.

• Understand the implications of changing workforce demographics

• Understand the characteristics of each generation

• Understand the multi-generational talent pipeline issues

Understand the changing demographic context1

• Review sourcing strategies for a mixed workforce

• Assess the probability of finding internal replacements and review sourcing strategies to ensureBaby Boomers can be held longer and replaced by ready candidates from the next generation

• Identify the potential channels for replacements through external hiring

• Consider the expertise being developed by external service providers

• Hire back Baby Boomers

• Consider creative options such as third-party, contract and part-time re-hiring of Baby Boomers

• Create student work training programs and re-open limited entry-level positions and internshipopportunities

Review sourcing strategies for a mixed workforce3

• Assess and plan for a multi-generational workforce

• Conduct a workforce demographic analysis to assess organizational vulnerability

• Plan for the IT function to blend multiple generations, each adding to the understanding andresponding to the needs of a business workforce that already appreciates new technologies

• Assess the needs for and plan to create a multi-generational workforce

Assess and plan for a multi-generational mix2

• Create a blended workforce that respects differences and plays to strengths

• Create a mission and vision, values, behavioral competencies and development activities thatencourage a well-blended workforce to appreciate all forms of diversity and demonstrate respect forgenerational differences

• Provide and assess programs that play to the strengths of different generations

• Assess company programs and initiatives versus the needs of generational groups

• Invest in initiatives for sustaining a blended workforce

• Measure attrition by generational group

• Adopt best practices to enhance future success of retention and engagement

Integrate the multi-generational workforce4


Recommendations

Use the list of key recommendations below as you develop a plan for creating

and retaining a multi-generational workforce.

Acquire a sense of the key differences between the generations and make them meaningful to you andyour organization

Understand the changing demographic context1

Create a multi-sourcing strategy that will ensure the talent pipeline can be filled with the right mix fromeach generation

Review sourcing strategies for a mixed workforce3

Assess the current workforce mix against future needs and mix required

Assess and plan for a multi-generational mix2

Create an environment that is held together by core values and benefits, training and development, andhuman capital management practices designed to help integrate the different generations

Integrate the multi-generational workforce4

EXECUTIVEACTION

PLAN

EXECUTIVEACTION

EXECUTIVEACTION

EXECUTIVE

PLANACTION

PLANACTION

78 Gartner EXP HR

Create a workforce plan

The workforce planning tool can be used to create a series of snapshots, monthly and quarterly, that

provide the basis for planning how to address gaps in workforce supply. Each component should be

completed consecutively and is described in more detail in the figure below showing the relevant

tool. The workforce plan begins with a workforce demographic analysis used for determining existing

supply by demographic group. The next two components help identify demand. One is the work-

force forecast and skills requirements, and the other component is the skills gap and attrition. Future

supply options are created through a tool for retirement scenario analysis. The transfer plan is the

final component and is used to identify the individual, one-by-one replacements should eligible

retirees leave.

Tools

Tool: Workforce plan

Planning component Supply or demand? Complete (check)

Workforce demographic analysis Existing supply

IT workforce forecast/skills Demand

Skills gaps and attrition Demand

Retirement scenarios/analysis Future supply (options)

Skills sourcing plan:

• Skills hiring plan

• Skills development plan

• External service provider sourcing plan

Future supply (overall sourcing mix)

Transfer plan Future supply (retirement replacements)


Conduct demographic analysis

The demographic analysis in the figure below can be used to show different views of workforce

supply analysis that are of interest to the organization. Most organizations combine internal

classification data (job level, department and date of hire) with demographic data (gender, date of

birth and retirement eligibility date) as a basis for identifying the impact of retirements on skills

required and future workforce diversity. This report, if sorted by most eligible for retirement, provides

an initial overview of the workforce and can be used to identify the numbers likely to retire in any

period. It also provides data input to the next stages of workforce planning.

Tool: Demographic analysis

Grade Job family Seniority Gender Age Full retirement

AssociateJoblevel IT department Date of hire

Male/female

Date ofbirth

Date eligible

Totals

EXECUTIVEACTION

PLAN

EXECUTIVEACTION

EXECUTIVEACTION

EXECUTIVE

PLANACTION

PLANACTION

Assess workforce requirements

A skills inventory is typically conducted to determine what skills are held across the IT workforce. It

provides an input to the tool in the figure below. A forecast requirement of headcount per skill is

taken from the technology plan. The gap between the forecast and actual shows the variance, which

can then be adapted for projected attrition based on current turnover rates including projected

retirements. Surpluses are inevitable as technologies and subsequent skills mature in their respective

lifecycles. Those skills that are no longer needed offer opportunities for redeployment if skills

retraining can be undertaken successfully. Skills gaps enable redeployment while providing the need

for a sourcing strategy.

Tool: Workforce requirements analysis

80 Gartner EXP HR

Demand Supply (Gap) (Projected gap)

SkillForecast

requirementActual number of

staff with skill Actual variance

Variance+

Projectedattrition


Create a retirement projection

The retirement projection shown in the figure below provides a basis for managing the risk of losing

critical enterprise knowledge. The size of the risk is projected in terms of exposure to exits of Baby

Boomers against available replacement options. To quantify the assessment, add the retirement

scenario figures to create an overall exposure level after pre-allocated vacancies are filled.

Percentage comparisons show the threat of different timings that can be compared for each area to

determine priorities. This provides a retirement scenario comparison. Add attrition projections to the

projected number of retirements to show overall projected exposure for the job group. This results in

an attrition scenario comparison. These two types of scenarios can then be contrasted across the

workforce to show which are most vulnerable and in need of greater attention.

Tool: Retirement projection

Use these formulas to review the level of vulnerabilityto non-replacement of retirees:

EXECUTIVEACTION

PLAN

EXECUTIVEACTION

EXECUTIVEACTION

EXECUTIVE

PLANACTION

PLANACTION

Formula:

# of retirees – # of replacements = exposure level

Example:

Worst case scenario: all Baby Boomers retire ontheir earliest eligible dates

40 retirees in 2007 – 14 ready replacements = exposure level of 26 in 2007

Formula:

Exposure level / # of retirees = % exposure

Example:

26/40 = 65% exposure

Conduct a retirement analysis

A retirement analysis, as shown in the figure below, is useful for forecasting ranges of numbers of

people likely to leave by time period, area and job so that direct replacements can be prepared to

take over the positions if needed. The retirement and replacement analyses are most useful in large

IT organizations and functional areas where the size of the turnover challenge can easily be over-

looked and replacements can often be earmarked for more than one, sometimes conflicting, future

opportunity. The analysis, based on two different but probable retirement outcomes, entails a review

by retirement eligibility of the impact on skills areas and IT departments.

Tool: Retirement analysis

82 Gartner EXP HR

Possible exit date(s) Most likely to retire

Second most likely toretire

Impact to function 1

Impact to function 2


Create a sourcing plan

The sourcing plan, shown in the figure below, is built around the skills gap analysis. The sourcing

plan starts with a demand assessment of the existing variance against the skills required to which an

attrition projection is added. The less hard-to-fill and not so significant gaps are more likely to be

filled through skills training where internal trainees exist and external hiring when appropriate internal

resources are close to depletion. Using an external service provider (ESP) is usually only considered

where skills are non-core or hard-to-cover, especially where numbers and risk are high. Contractors,

such as returning Baby Boomers, are a short-term solution.

Tool: Sourcing plan

EXECUTIVEACTION

PLAN

EXECUTIVEACTION

EXECUTIVEACTION

EXECUTIVE

PLANACTION

PLANACTION

(Projected gap)Hiring

employeeHiring

contractorsSkills

development Outsourcing

SkillVariance +

attrition FT and PT* FT and PT*Training to

intermediate

External service

provider/offshoring

*For the purpose of headcount calculation, 1 PT (part timer) = 1/2 FT (full timer)

Develop a transfer plan for retiring Baby Boomers

The transfer plan, as shown in the figure below, is a back-up plan that focuses on replacing

individual Baby Boomers as they become eligible for retirement. Recorded in order of expected

retirement date using the two most likely date comparisons for analysis, the transfer plan provides a

format for identifying specific back-ups by job. In addition, a plan for knowledge transfer from the

incumbent to the replacement is included so that the transition is carried out effectively. The post-exit

role is a way of identifying offers that need to be extended to retirees, such as an on-call role or

contractor position over a limited term. These offers need to be discussed with relevant individuals

prior to them making retirement decisions. Individuals may be counseled without pressure on them

to make or divulge personal plans.

Tool: Transfer plan

84 Gartner EXP HR

RetireePossible exit

date(s)Replaced by ?

(Date 1)Replaced by ?

(Date 2)Knowledge

transfer Post-exit role?


Review human capital management programs

To create an integrated culture or work environment for a blended workforce requires that all human

capital management (HCM) programs are well aligned with the organization’s mission, vision, values

and behavioral competency standards. The list provided in the figure below is a sample, and many

organizations will have their own programs and may also have additional criteria that are used to

determine the fit with the generational groups. Use this tool as a start and expand on it to assess the

alignment of programs with workforce needs. Then add programs that are missing and improve

program content where it does not hit the mark.

Tool: HCM policies/programs assessment

Policy/program


Employee insurance/savings benefits

Competitive current/retirement medical.

Maximum employer contributions to savings.

Contribution options.

Family health coverage.

Low contribution.

Opt out for cash refundson resignation.

Work/lifebenefits

Enables women to createa predictable routine

Efficient organized worklife that balances withfamily life. More time athome.

Shorter time at work balanced by working offhours at home

Employee involvement

Stimulating work that recognizes high expertise

To be noticed and givenbetter opportunities

To contribute and be valued and heard

Diversity training

Refresher in expectationsand gain awareness ofyounger colleagues

To understand changes inthe workforce mix

Help to bring age awareness to high level of ethnic/cultural diversity

Recognition Private or public asthanks for building highexpertise

Public to increase opportunities of advancement

Public to show contribution


EXECUTIVEACTION

PLAN

EXECUTIVEACTION

EXECUTIVEACTION

EXECUTIVE

PLANACTION

PLANACTION

Review human capital management programs (continued)

In typical IT audit fashion, red (= R in figure below) means there is still much work to do, yellow

(= Y in figure below) means that the program can easily be improved and green (= G in figure below)

means all bases are covered. Use the color codes to prioritize the need for improved programs and

new programs. The goal is to increase attractiveness of employment and thereby also increase the

probability of retaining and recruiting each generational group. Investment in programs should focus

on areas of highest risk.

Tool: HCM policies/programs assessment (continued)

86 Gartner EXP HR

Policy/program


Training anddevelopment

Classroom/group style.Like to be mentors. Builddeep expertise in area ofknowledge

E-learning that supportsbreadth and depth withtests to demonstrate ability

Low profile with emphasison self-directed learning,breadth of learning andfun, such as video games

Performancemanagement

Cynical. Minimize timespent on it.

To demonstrate successesand negotiate rewards

Feedback and opportunityto discuss learningopportunities

Compensation Fairness is key.Compromise merit payjust to survive.

Competitive and key toretention

Year-on-year, high-endimprovement

Culture Interactive. Clear hierarchy.Meet the expectations ofothers who depend onthe work.

New opportunities, innovation and risk withrewards to match

On-the-job learning andopen forums to addvalue. Interesting workwith minimal supervision.



Best Practice R/Y/G

Define the ground rules for effective communication with the ESP. Typical principles include:

• “If both sides are too commercial, trust will soon go”

• Trust, honesty, continual communication (good and bad)

• Full and frank discussions

• Sustain constructive dialogue that solves problems and avoids blame

• Share strategic plans and ideas, and Invite the ESP to share expertise in how the plans can be best achieved

Use informal agreements to increase trust:

• Avoid contract changes except for major changes

• Don’t be too aggressive in getting change requests. Trust a verbal yes.

Negotiate win-win solutions that acknowledge each other’s needs and assess that each have been met. Know when to back off and give-in to the ESP. Let them be successful in business too. Use a two-way street approach.

Monitor and assess the quality of communications and solicit feedback to help manage the relationship more effectively

Host: ESP relationships are likened to a partnership: Three respondents likened sourcing to

marriage. Educate all relationship management participants how to communicate for trust so

that effective relationships are built at every level.

Relationship management principles for contracting and operationalizing

Shared Accountability

• Define expectations, roles and responsibilitiesduring the contracting process (90% is goodenough)

• Commit senior-level, informal, personal relation-ships to resolving problems

• Establish flexibility for integrating change withinoverall objectives of the contract

• Invite ESP to share load in continuous improve-ment, Innovation and new technology

Process

• Define management processes in contract forjoint design and implementation

• Ensure written processes for disputes are in placebut not invoked

• Define escalation in terms of mutual benefit, notas an adversarial process

• Define operational review process and establishan approach that encourages openness andfuture improvement

Measurement

• Include performance measures, e.g.,: CustomerService, SLAs and Project Status

• Use measures for problem solving and informingthe business, not finger pointing

• Focus on a few important measures that driveimprovement, not penalties

• Establish tools/techniques e.g.,: contract,balanced scorecard/SLAs, budget; formal governance meetings, reports to the business

Teamwork

• Create foundation for an integrated, co-locatedworkforce with one vision and culture

• Set expectations for continuous, on-the-groundcommunication

• Use confidentiality agreement to encourage opendialogue about business/IT strategy

• Seek cross-functional involvement

• Encourage shared expertise

Ingredient Definition R/Y/G

To assess areas for improving trust in your ESP relationship, indicate red (R), yellow (Y) , green (G) on thechart below.

Capability Can do the job-technical, management, financial

Communications Meaningful and timely

Responsiveness Understand, anticipate, decide, mobilize, deliver

Predictability Set and meet expectations, no surprises

Compatibility Cultural fit, business understanding

Dependability Certain about behavior in uncertain times

Mutuality Common goals, individuals win because the team wins

Congruency Perception and reality are matched

Consistency Standards are deployed, protocols are applicable to all

Reputation Personal experience, word of mouth, press, preferences

Appendices

88 Gartner EXP HR

Goals and objectivesGoals and objectives are often used indiscriminately. In the context of businessstrategy, the goals are usually focused on six orso areas with potential for improvement and ahigh need to be sustained; they are cross-functional in ownership and have critical impacton business performance. They are long term innature and without time boundaries. There isalways more that can be done to achieve agoal, and so organizations strive for furtherimprovement after each accomplishment.Objectives, however, are time bound and generally more quantifiable like targets, and canbe assessed in terms of how closely they wereachieved.

IT leadersThese are members of the team that comprisethe direct reports to the CIO. Potential IT leadersare those at the next level or two in largerorganizations.

Multi-generational workforceThe workforce is made up at any given time ofthree or more distinct generations who havediffering norms and needs stemming from howthey grew up and the life stage they havereached. Employers who attend to the needs ofdifferent generational groups are more likely tohave the mix needed for driving continuousimprovement with minimal risk while alsoincreasing the probability of retaining hard-to-replace talent.

Compelling visionUsually expressed in statements that arecommunicated to employees and other stakeholders, the compelling vision defines thedesired end state after a change. Also known asthe burning platform, it includes the urgent andimportant reasons or drivers for change andcreates a perspective of the new state. Thecompelling vision is generally found along withthe recommendation and rationale in the casefor change.

CultureOften described as the way things are donearound here, culture is the set of norms orbehaviors that are most consistently observed in the internal organizational environment anddictate the formal and informal ways that business is conducted. After a change activityhas led to the internalization of new behaviors,the change will have been institutionalized,resulting in the desired change of culture.

DiversityAn environment in which all employees irrespective of their differences—such as incolor, origin, sexual preference, ethnic origin,physical disability, gender and age—are treatedwith mutual respect and assured of equalopportunity. Difference is seen as a cause forcelebration, and difference of perspective as anopportunity to learn.

Glossary


TrainingTraining is a method for transferring knowledgeand skills using multimedia instructional presentations and practice activities in a classroom setting or, in the case of e-learning,on screen. In preparation for change, new skillsdevelopment and management training arecommon.

ValuesThe organization’s values are the behavioralstandards and expectations to which allmembers of the organization are held. They arethe foundation for the desired culture andprovide a basis for consistency in the waypeople behave.

PerformancePerformance standards are achieved and rolledup from individual to organizational levels,usually against pre-determined goals and objectives. Performance results are achievementsover periods of time that are often comparedwith similar historical performance and againstworld best-in-class, industry standards anddirect competitors. In situations of change, thechallenge is to sustain performance during thechange and drive improvements after thechange.

StakeholdersThe constituents impacted by change are thestakeholders. They normally comprise theemployees, managers, leaders and otherdepartment members, and may includecustomers, suppliers and even shareholders.Some are identified as influencers in a stake-holder analysis, and strategies are commonlydesigned to get them on the side of theproposed initiative.

90 Gartner EXP HR

ITAA Workforce ReportITAA, Arlington, VASeptember 2004

Kochs Laabs, J.What If They Don’t Retire? WorkforceDecember 1997

Lockwood, N.R.The Reality of the Impact of Older Workers andEldercare in the WorkplaceSHRM2003 Research Quarterly

Melymuka, K. Workforce Crisis Computer World July 3, 2006

NewslineAging Workforce Presents, New Opportunities,Challenges for Employers http://www.conference-board.orgSeptember 20, 2005

NewslinePreparing for an Aging Workforcehttp://www.bc.eduSeptember 7, 2005

Panszcyk, L.A. HR How To: Intergenerational IssuesCCH Knowledge Point, Chicago, IL2004

Roston, E. Interview with Secretary of Labor Elaine ChaoTime MagazineDecember 19, 2005

Gartner EXP reports

Berry, D., Walker, A., Mok, L., and Tucker, C.Building the Next-Generation IT Workforce: Focus onSynergiesGartner EXP Premier report G00144922November 2006

Gartner core research

Morello, D.“Capitalizing on People: Challenges and Issues” Gartner Research K-19-1849January 17, 2003

Morello, D.“Ten Converging Forces Will Change Your Workforce” Gartner Research COM-14-5024February 27, 2002

Other references

Dychtwald, K., Erickson, T. J., and Morison, R.Workforce Crisis: How to Beat the Coming Shortageof Skills And TalentHarvard Press, Cambridge, MA2006

Florida R.Flight of the Creative ClassHarper Collins, New York, NY2006

Hirschman, C. Here They ComeHuman Resource ExecutiveJuly 2006

Resources

For more information about the study for IT Human Capital Management Executives, contact [email protected].

Quarter 1, 2007

Entire contents © 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or itsaffiliates. Reproduction of this publication in any form without prior written permission is forbidden. The information contained hereinhas been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness oradequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained hereinor for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results.The opinions expressed herein are subject to change without notice.

© 2007 Gartner, Inc.

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Managing the Multi-Generational Workforce

Case Profile Study

for IT Human Capital Management Executives

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h M G Managing the Multi-Generational Workforcemedia.govtech.net/GOVTECH_WEBSITE/EVENTS/... · Organizations can effectively manage the risks of workforce transition through building