CORPORATE LEADERSHIP COUNCIL® MAY 2008

www.clc.executiveboard.com

EXECUTIVE SUMMARY
Managing the Multigenerational Workforce

Finding 1: Development opportunities, future career opportunities, and a culture of meritocracy are among the attributes
most critical for attracting and retaining all employee segments. While organizational strategies for attracting and
retaining younger employees should emphasize internal mobility and available development opportunities, companies
should retain older employees by providing them with new skills and meaningful experiences.

ƒ Development Opportunities, Future Career Opportunities, and Meritocracy Are Among Most Important Attributes for
Attracting and Retaining All Employee Segments—The Council’s 2006 study, Attracting and Retaining Critical Talent
Segments: Identifying Drivers of Attraction and Commitment in the Global Labor Market aims to provide an understanding of
how the employment value proposition (EVP) attracts candidates and builds employee commitment. The survey of more than
58,000 individuals identified the five EVP attributes most critical for attracting and retaining talent across all employee segments
as listed below for younger and older workers.1

Top EVP Attributes for Employees for 23-29 Year Olds Top EVP Attributes for Employees for 50-59 Year Olds

1. Compensation, 48% 1. Compensation, 49%

2. Future Career Opportunities, 47% 2. Organizational Stability, 37%
3. Work-Life Balance, 34% 3. Health Benefits, 34%
4. Organizational Stability, 32% 4. Work-Life Balance, 32%
5. Development Opportunities, 30% 5. Retirement Benefits/ Respect, 29%

ƒ Organizational Strategies for Attracting and Retaining Younger Employees Should Focus on Career Pathing and
Development Opportunities—Companies should consider the attitudes and characteristics of younger employees to define an
effective strategy for attracting and retaining this employee segment. In addition to flexible work options, companies should
strive to create a work environment that encompasses the needs of Generations X and Y, such as providing visibility into career
opportunities and establishing development programs. The figure below details the attitudes and characteristics unique to
Generation X and Y employees, as well as organizational action steps that may attract and retain these individuals: 2345
Figure 1: Creating a Work Environment to Attract and Retain Younger Employees

Attitudes and Characteristics of Generation X Attitudes and Characteristics of Generation Y

2 3
Employees Employees

• Ambitious and eager to advance • Adaptable and flexible

• Have an entrepreneurial spirit • Favor a listen and respond approach
• Individualistic, assertive, independent • Open to teamwork
• Likely to seek new career opportunities in the future • Relaxed about diversity
• Self-reliant for skills development • Technically savvy
• View each job as a learning experience

4,5
Organizational Strategies to Attract and Retain Younger Employees

• Communicate Prospect of Rapid Promotion—Create and communicate pre-aligned career pathing that allows multiple
avenues for fast development and promotion. This will allow younger employees visibility into jobs within their
organization that may provide them with new learning experiences and skills.
• Provide Unique Work Experiences—Consider offering opportunities to work abroad or to pursue academic studies or an
internship within a career break, as younger employees likely seek these new opportunities.
• Establish Development Programs—Establish development programs, such as HIPO or leadership programs, that
demonstrate a commitment to career advancement and provide exposure to senior-level management.

 2008 Corporate Executive Board. All Rights Reserved.

 CORPORATE LEADERSHIP COUNCIL® PAGE 2
MANAGING THE MULTIGENERATIONAL WORKFORCE EXECUTIVE SUMMARY

Finding 1: (Continued)

ƒ Organizational Strategies for Attracting and Retaining Older Employees Should Focus on Providing New Skills and
Meaningful Experiences—Companies should also consider the attitudes and characteristics unique to their older employee
segments in order to design retention strategies for this population. Older employees not only value flexible working options,
but may also find value in other organizational retention efforts, such as mentoring, training, and sabbatical programs.
The figure below details the attitudes and characteristics of Baby Boomer and mature employees, as well as organizational
action steps that may attract and retain these individuals:678 91011121314151617
Figure 2: Creating a Work Environment to Attract and Retain Older Employees
6,7,8 10,11
Attitudes and Characteristics of Baby Boomers Attitudes and Characteristics of Mature Employees

• Juggle many responsibilities as part of the “sandwich” • Respect authority and tradition
generation • Seek new skills
• Seek new responsibilities to provide meaning in lives • Value an environment where opinions are heard
• Value company commitment and loyalty • Value company commitment and loyalty
• Value control • Value formality
• Value work that provides personal satisfaction • Value new experiences
• View work as an anchor in their lives

Organizational Strategies to Attract and Retain Older Employees

• Consider Flexibility in Benefits—Lincoln Financial Services Company created a paid time off bank, offering more
flexibility than predetermined vacation, holiday, and sick time, so that employees, particularly older employees, could take
12
personal time for activities such as elder care.
• Offer Phased Retirement Programs—Phased or gradual retirement is any arrangement that enables older workers to
reduce their work hours or responsibilities for the purpose of easing into full retirement. A survey by Watson Wyatt
Worldwide found that two-thirds of employees over the age of 50 planned to “phase into retirement” rather than exit
completely from the workplace. Employers should explore phased retirement programs as a retention tool for older
13
employees, as these individuals may find remaining in the workforce in some capacity preferable to leaving altogether.
• Establish Sabbatical Programs—Some companies use sabbatical programs to retain older employees considering
retirement. For example, an employee with 10 years of service at S.C. Johnson & Son, Incorporated can take 12 weeks of
leave with quarter pay and benefits. There are no requirements for how employees use the time and, with every additional
14
five years of service, another 12 weeks is available on the same terms.
• Provide Rewards and Recognition—Older employees value commitment and loyalty; as such, companies should reward
and publicly recognize the contributions of older employees to the organization.
• Encourage Participation in Mentoring—As older employees seek responsibilities that provide meaning in their work
lives, many companies encourage this employee segment to serve as mentors to other employees via mentoring schemes.
Such efforts provide additional value by promoting knowledge transfer as older employees prepare to leave the
15
workforce.
• Provide Training Programs—The availability of training programs emphasizes an organizational commitment to
continuing skills development for older employees who may be seeking these opportunities. Companies should consult
16
with older employees regarding the type of training they would value most and how they best learn.
• Offer Career Development Opportunities—One company designed a fast-track program to place graduates with MBAs in
executive-level positions within three years. Concern over skill levels and resistance from internal, experienced employees
prompted the organization to offer the chance to participate in the MBA program to this group as well. As a result, the
17
company ended up with multiple generations in executive-level positions.

 2008 Corporate Executive Board. All Rights Reserved.

 CORPORATE LEADERSHIP COUNCIL® PAGE 3
MANAGING THE MULTIGENERATIONAL WORKFORCE EXECUTIVE SUMMARY

Finding 2: Managers can play a key role in attracting and retaining a multigenerational workforce by increasing their
awareness of generational preferences and adjusting their management practices to reflect these differences.
Organizations should provide managers with training, tools, and incentives to promote this awareness and encourage
effective use of flexible work arrangements.

Organizations may use the following tactics to encourage managers to support a workforce inclusive of multiple generations:

Tactic #1: Educate Managers on Differences between Segments of the Multigenerational Workforce

In order to deal with a workforce comprised of multiple generations effectively, companies must ensure that managers understand
the differences in the attitudes and preferences of these employee segments. As managers understand the values and motivation of
each employee segment, they can adjust their management styles to fit these needs. The tables below identify some of the
characteristics that employee segments value and sample action steps that managers can take to capitalize on these preferences
and retain both younger and older employees:

Table 1: Managerial Strategies for Retaining Younger Employees

Characteristic Action

Cater to the independent nature of younger employees by

Value Independence providing them with the freedom to make decisions and
determine when and how they will get their work done.

Deliver timely, detailed, and continual feedback to younger

Value Feedback employees on both short- and long-term projects.

Incorporate team-based projects into the workload of

younger employees and encourage these individuals to
Value Teamwork interact with and support colleagues.

Deliver information through technology when possible to

Value Technology capitalize on this technically savvy employee segment.

Assign younger employees projects that will benefit from

Value Entrepreneurialism their creativity and problem-solving skills.

Table 2: Managerial Strategies for Retaining Older Employees

Characteristic Action

Handwrite a note rather than e-mail or deliver information in

Value Formality
person or through teams.

Allow older employees to voice their opinions in order to

Value Input demonstrate that their experience is valued.

Do not only consider younger employees for new

Value New Experiences/Skills assignments or responsibilities that may benefit older
employees.

 2008 Corporate Executive Board. All Rights Reserved.

 CORPORATE LEADERSHIP COUNCIL® PAGE 4
MANAGING THE MULTIGENERATIONAL WORKFORCE EXECUTIVE SUMMARY

Finding 2: (Continued)

Tactic #2: Train Managers on Principles behind Flexible Work Arrangements (FWAs)

Manager buy-in is crucial to the success of an FWA program, but many organizations encounter resistance from managers who are
unwilling to relinquish direct supervision of on-site employees whose work processes they can visually evaluate.18
Additionally, managers unfamiliar with FWAs may not understand how to evaluate employee requests for flexibility, use technology
to manage employees remotely, or manage the performance of off-site staff. Nearly half of respondents to a WorldatWork poll of
employers report that their line managers experience difficulty with implementing flexible work arrangements.19

To educate managers and overcome their resistance to FWAs, many organizations create training programs that outline guiding
principles for their flexible work offerings. For example, Fannie Mae—an organization consistently recognized as one of the best
companies to work for in terms of work-life benefits—established mandatory training sessions for managers on its FWA program, as
detailed in the following case profile:20,21

Case Profile 1: Fannie Mae Trains Managers on Guiding Principles behind Flexible Work Arrangements
Situation: Fannie Mae discovered that, although flexible working hours were important to its employees, they were reluctant to utilize FWAs
out of concern that managers would not be supportive.
Action: The company redesigned its FWA request and approval process to focus on the business case and clarified for employees that their
performance would not be defined by physical presence. In addition, Fannie Mae established mandatory training sessions on FWAs for
managers, which informed them of the following guiding principles behind the practice:

PRINCIPLE
Meeting business goals is the
company’s top priority.
Performance is not defined by
physical presence.
Equity does not guarantee all
employees the same
outcome.
Flexibility must be a
two-way street.
Employees are not entitled to
flexibility.
Employee-manager
collaboration is critical.
Performance matters.
EXPLANATION
The business needs of the individual’s department, team, work group, and customers must be fully
addressed when designing and evaluating any flexible working schedule. Moreover, the impact of the
employee’s schedule on customers, co-workers, and the company as a whole must be positive or
neutral and fully understood by both the employee and his or her manager.
The company’s commitment to flexible working arrangements underscores its belief that job
effectiveness is characterized by employee performance and results, rather than hours spent in the
office.
This guideline dictates that each request for flexible scheduling be evaluated on its own business-based
merits by an individual employee and his or her manager. All employees have the same right to utilize
flexible scheduling; however, the flexible scheduling solution need not, and will not, be the same for all
employees.
Established flexible work arrangements must themselves remain flexible to accommodate changing
company, co-worker, or customer needs.
Requests in accordance with business needs will be fully considered by management; however,
employees must understand that flexible scheduling is not appropriate for all employees or positions
within the company.
Open dialogue between managers and employees is a crucial aspect of evaluating and assessing
requests for flexible scheduling approval. However, ultimate approval of requests rests with managers.
Only employees with “meets expectations” or higher performance ratings may request flexible
scheduling; some types of flexible work arrangements (e.g., telecommuting) require additional skills,
such as proficiency in technical skills.

Result: During the first six months of Fannie Mae’s renewed focus on communicating FWA principles to managers, the number of employees
utilizing flexible scheduling options increased by 100%. Furthermore, the company believes that the increased participation rates in its FWA
program are largely responsible for its low turnover rate of 7%, relative to the industry average of 10% to 15%.

 2008 Corporate Executive Board. All Rights Reserved.

 CORPORATE LEADERSHIP COUNCIL® PAGE 5
MANAGING THE MULTIGENERATIONAL WORKFORCE EXECUTIVE SUMMARY

Finding 2: (Continued)

Tactic #3: Provide Managers with Online Tools to Locate Appropriate Candidates for FWAs

In addition to training mangers on the principles guiding FWAs, organizations may also offer tools, such as online
support, to help managers determine which of their employees may benefit from FWAs. Sun Microsystems, for example,
established a process whereby managers complete an online test to locate appropriate candidates for its “Open Work”
program. The practice, detailed below, helps managers identify jobs that are compatible with Sun’s flexible work
options:22

Case Profile 2: Sun Microsystems’ Online Test Helps Managers Select FWA Candidates

Step 1: Assign Profiles Step 2: Complete Test Step 3: Determine Solution

First, Sun assigns Managers complete an online Managers are encouraged to

employees one of several
broad profiles (e.g.,
“Mobile Collaborator”) that
reflects the nature of their
day-to-day work.
test that helps them select good collaborate with good FWA
candidates for the program, candidates to find a work
based on the assigned employee solution that offers both parties
profiles. flexibility and control.

Tactic #4: Provide Incentives for Manager Buy-In to FWAs

Profiled companies in past Council research note that manager dissemination of information is integral to the overall
implementation and communication of work-life programs, including FWAs. However, these companies report that
obtaining manager support in the communication of these arrangements is a challenge. As such, profiled companies
encourage manager support and communication of work-life offerings via the following methods:23

• Offer Awards for Communication Efforts—Business units at one profiled company have an “Work, Family, and Lifestyle”
recognition award that encourages middle managers to actively assist their employees in maintaining a healthy balance through
the company’s work-life programs.
• Tie Work-Life Initiatives to Business Drivers—Another profiled company’s HR department advertises its work-life programs to
managers as a means of improving business production, rather than as a matter of compliance.

 2008 Corporate Executive Board. All Rights Reserved.

 CORPORATE LEADERSHIP COUNCIL® PAGE 6
MANAGING THE MULTIGENERATIONAL WORKFORCE EXECUTIVE SUMMARY

NOTE TO MEMBERS: This project was researched and written to fulfill the research request of several members of the
Corporate Executive Board and as a result may not satisfy the information needs of all member companies. The
Corporate Executive Board encourages members who have additional questions about this topic to contact their research
manager for further discussion. The views expressed herein by third-party sources do not necessarily reflect the policies
of the organizations they represent.

PROFESSIONAL SERVICES NOTE: The Corporate Leadership Council (CLC®) has worked to ensure the accuracy of
the information it provides to its members. This project relies upon data obtained from many sources, however, and the
CLC cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the CLC is not engaged in
rendering legal, accounting, or other professional services. Its projects should not be construed as professional advice on
any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate
professional. Neither Corporate Executive Board nor its programs are responsible for any claims or losses that may arise
from any errors or omissions in their reports, whether caused by Corporate Executive Board or its sources.

1
Corporate Leadership Council, Attracting and Retaining Critical Talent Segments: Identifying Drivers of Attraction and
Commitment in the Global Labor Market, Washington: Corporate Executive Board (October 2006).
2
Author Unknown, "How HR Can Build a Cohesive Workforce Out of 'Squares,' 'Hippies,' and 'Slackers'."
Human Resource Department Management Report (March 2005). (Obtained through Lexis-Nexis).
3
Author Unknown, "How HR Can Build a Cohesive Workforce Out of 'Squares,' 'Hippies,' and 'Slackers’.”
4
Corporate Leadership Council, Leadership Development Strategies for Generation X and Generation Y,
Washington: Corporate Executive Board (January 2002).
5
Goldberg, Bonnie, “A New Generation of Recruits,” The Toronto Star (17 July 2004). (Obtained through Factiva).
6
Author Unknown, "How to Nurture and Retain Baby Boomer Employees," HR Focus (November 2000).
(Obtained through Lexis-Nexis).
7
Douville, Brenda, "Generational Differences in the Workplace: Understanding Collective Peer Personalities,"
Employee Assistance Professionals Association, Incorporated (September 2001). (Obtained through Lexis-Nexis).
8
Author Unknown, "How HR Can Build a Cohesive Workforce Out of 'Squares,' 'Hippies,' and 'Slackers'.”
9
Author Unknown, "How HR Can Build a Cohesive Workforce Out of 'Squares,' 'Hippies,' and 'Slackers'.”
10
Rose, Barbara, “AARP: Retain Older Workers; Study Contends Cost of Turnover Higher,”
Chicago Tribune (11 December 2005). (Obtained through Lexis-Nexis).
11
Author Unknown, "Making the Most of a Mature Workforce," Human Resources Magazine (1 November 2005).
(Obtained through Lexis-Nexis).
12
Author Unknown, "Making the Most of a Mature Workforce.”
13
Price, Allan, "Phased Retirement: An Emerging Preference," Human Resources Magazine (February 2005).
(Obtained through ProQuest).
14
Author Unknown, "Stepping Back: More Firms Seeing Benefits of Letting Workers Take Sabbatical Leaves,"
Pittsburgh Post-Gazette (27 August 2006). (Obtained through Lexis-Nexis).
15
Author Unknown, "Making the Most of a Mature Workforce.”
16
Rose, Barbara, “AARP: Retain Older Workers; Study Contends Cost of Turnover Higher.”
17
Author Unknown, "How HR Can Build a Cohesive Workforce Out of 'Squares,' 'Hippies,' and 'Slackers'.”
18
Schaefer, Patricia, "Flexible Work Arrangements: Employer Solutions to Common Problems,"
Business Know-How (2005). (Obtained through http://www.businessknowhow.com/). [Accessed 4 January 2007].
19
WorldatWork, “Flexible Working Brings Significant Challenges But Effective Implementation Will Help Organizations
Reap the Benefits,” http://www.worldatwork.org/ (23 February 2005). [Accessed 16 May 2008].
20
Holik, Susan Z., “At Fannie Mae, Training is the Key to Creating a Successful Flexible Work Environment,”
Corporate University Review (1 April 1999). (Obtained through Factiva).
21
Vernarec, Emil, "Making the Case to Top Management," Business & Health (July 1999). (Obtained through Factiva).
22
McGregor, Jena, “Flextime: Honing the Balance,” Business Week (11 December 2005). (Obtained through Lexis-Nexis.)
23
Corporate Leadership Council, Designing and Communicating Work-Life Benefits in Canada, Australia, and the
United Kingdom, Washington: Corporate Executive Board (February 2005).

 2008 Corporate Executive Board. All Rights Reserved.