As the remaining baby boomers retire over the next 20 years, employers will need to adjust compensation strategies and organizational structures with the changing executive landscape, says a recent report from accounting and advisory firm Baker Tilly.
“We need to be cognizant of our employee base, one size does not fit all anymore,” says Alan Whitman, managing partner at Baker Tilly Virchow Krause in Southfield. “Employers will continually need to refine their human resource platform to take into consideration that their employee base is much more multifaceted now.”
The report — which surveyed an equal number of baby boomers, born between 1946 and 1962, and representatives of Gen X, born between 1963 and 1981 — asked respondents to rank the importance of various job attributes, including advancement opportunity, responsibility, sense of accomplishment, high pay, and meaningful work.
While Gen X executives placed a premium on high pay, baby boomers most valued meaningful work — something employers should consider when developing compensation that will attract and retain employees.
“Baby boomers have a longer horizon for what makes them tick,” Whitman says. “They (believe) that if they pay their dues and keep their head down and put good effort to the test, things will work out. Gen Xers look for things to be better laid out, better defined for them.”
But are companies ready for the generational shift? While half of baby boomers felt their organizations were prepared for the change in employee makeup (age, gender, diversity), the majority of Gen X executives did not, the report says.
To better facilitate the upcoming change in workforce leadership, Whitman recommends baby boomer executives in the final years of their career mentor Gen X staff members. As the transition occurs, companies can reduce pay and hours that allow baby boomers to continue on a part-time or intermittent basis.
“Respondents from both generations in our survey generally agree that an earlier peak in compensation is preferable to a later one. This is a new and developing idea that companies may be slow to adopt,” the report says.
And as baby boomer executives exit the workforce, employers will need to ready themselves for the next generation moving up the corporate ladder, Whitman says. “(The changing) workforce isn’t something that’s going to go away. Employers need to look at how they can attract the newest employee type — how they can meet their monetary, emotional, and other needs. It’s multidimensional,” he says.
To read the full report, click here.