Generational Math Tells Us About the Future of Talent
John Adams once said that “every problem is an opportunity in disguise.” To turn a problem into an opportunity we must first understand the problem.
To understand why people problems are the number one issue facing Small to Medium Sized Businesses (SMBs) today and well into the future, let’s look at the generational math that has created this issue. Once we understand the dynamics of each generation of our population, we can develop the appropriate talent strategies for each generation to win the battle for talent.
Let's look at the four generations of the US population to understand how we got here and where it goes from here.
Baby Boomers: 75 million (59-77 years old)
Boomers are the oldest generation still in the workforce, making up around 25% of the total workforce; They were born between 1946-1964.
Out of the 75 million, 41 million are still in the workforce. During COVID, 29 million or 39% of Baby Boomers retired, which is one of the factors in the current employee shortage. Many dubbed that period the Great Resignation, but it could have been identified as the Great Retirement as well.
Gen X: 66 million (43-58 years old)
Gen Xers make up the second largest percentage of the workforce with 33%; They were born between 1965-1980.
This generation contains a majority of company leaders and, surprisingly, startup founders, with 55% being Gen Xers. I fit into that category!
Millennials: 72 million (27-42 years old)
Millennials make up the most significant percentage of the workforce, with 35%; They were born between 1981-1996.
This generation is up and coming and will be future leaders if not already in leadership positions. They are expected to comprise 75% of the global workforce by 2025, meaning they will be critical pieces of your talent plan and execution of your strategy.
Gen Z: 69 million (11-26 years old)
The second smallest generation, Gen Z, makes up around 5% of the workforce; They were born between 1997-2011.
While Gen Z continues to enter the workforce, they will fill some of the openings, but as the 2nd smallest generation the employee shortages will only increase.
When studying the generational math, we gain clarity on how people problems became the number issue for SMBs. But more importantly, what people challenges are going to look like in the future:
1. The United States had 10.1 million jobs open in August of 2022
2. The employee shortage was caused by several factors including mass retirement of 29 million Baby Boomers, lower birth rate and lower population in Gen Y coming into the workforce.
3. The 2nd largest generation of the Millennials are already in the workforce and there are still 10.1 million jobs open
4. As Baby Boomers continue to retire in larger numbers then there are Gen Y coming into the workforce, open jobs will continue to increase.
5. Millennials and Gen Y’s look at work differently as many of them are receiving the largest wealth transfer ever from their Baby Boomer parents.
6. The only variable that could slow down open jobs reaching at least 15 million+ in the coming years is immigration.
7. The generational math provides clarity as to why people issues have been and will continue to be the number one issue for all businesses, but even more so for growing SMBs.
Now that we all understand the problem, you can take several steps to turn your people problems into an opportunity and even a competitive advantage.
The first step is to go through your entire company roster and calculate the percentage of each generation you have.
Here’s is an example of the generational math for an 87-person company:
• Baby Boomers: 31% (27 people)
• Gen X: 46% (40 people)
• Millennials: 22% (19 people)
• Gen Y: 1% (1 person)
From this analysis, the company leader developed several talent strategies within their Talent Planning Software. Succession planning and knowledge transfer have become prioritized talent strategies for this company as they work to minimize the impact of people issues on their business and build their team for the future.
Being knowledgeable about the generational math of the US population helps us understand how people problems became the number one issue for most organizations. Generational math also helps us understand how people shortages and problems will continue well into the future. Understanding the generational math of both the US population and your organization enables you to develop the talent strategies to turn people problems into an opportunity.
In our next column, we will cover specific strategies for your talent plan that you can execute by generation to win the battle for talent and realize the full growth potential of your people and organization. Those Who Talent Plan – Profit!
Steve Van Remortel is the Founder/CEO of MyTalentPlanner Software, Chief Strategist & Talent Advisor at Stop the Vanilla, LLC, and is a speaker, trainer, advisor, and 3x author.
Trends to talk about
1. Talent shortage 10.86 million in latest 2023 numbers
2. Large companies are laying off
3. Small to medium sized businesses still facing ee shortages
4. Maybe a slower pace of growth but there are no employees replacing the large amounts that continue to leave the work force.
5. Develop the total person
a. Through all phases of life
6. 1:1 with every person from board room to plant floor to in the field
7. All have development plans to retain them.
8. Build skill set gaps through internal development vs going outside which dramatically raises the % chance it will not work.
9. Tactical technology disruption vs. strategic
10. Companies will use technology to win at talent – strategic technology disruption
11. Employer of choice culture
12. Production floor/field
a. Worst case scenario is that you lose a great employee for their calling.
b. You helped them define their calling
c. Become a business model for a lot of companies that struggle to hire and retain people.
13. Agile talent planning is critical in the every changing talent economy we are in today.
14. Every sprint (3 or 4 months) you evaluate and adapt your strategy and your talent plans and then you execute your next sprint to take another step towards your vision
15. Talent will remain the #1 issue limiting growth of SMBs into 2023 but it will be different.
16. Retention will be essential but building a culture of choice which becomes a talent attractor will be essential with Millenials and Gen Z
17. Promoting from within but hiring to your talent plan. Keep backfilling the people you are promoting.
18. 65% of leaders believe talent will be the #1 issue limiting their growth in 2023.
19. So the battle for talent continues.
20. But you win the battle for talent through talent planning.