Corporations arguably will have the toughest time meeting the needs of those employees in the middle of their working life. Generation Xers, born between 1965 and 1980, don’t have the advantage of older workers who use their pending retirement as a dangling carrot keeping them motivated. Nor do they have the freedom and enthusiasm of younger workers, who are fresh out of school with flexible salary demands and few life obligations.
Whenever Garry Adams, Talent Business Leader, Pacific at Mercer, consults on organisational or cultural improvements, he says the employees in the middle have the strongest reaction to change.
For the most part, Gen Xers’ minds are overloaded with other concerns. They know planning for retirement is important because they’ve seen the challenges facing their parents, but they view retirement as being too far away to save money seriously. They need money now.
This generation started out with high expectations, entering the workforce during a period of ample job opportunities. They enjoyed signing bonuses and rode the wave of the first dot com boom. But then they saw the tech bubble burst. And just as they were regaining stability, the GFC pulled the economic rug from under their feet. They didn’t fall as hard as the Baby Boomers, but the GFC left many of them financially shaken and wary about the future.
As a result, many feel they are lucky to have a job today and may not have the confidence, opportunity, or flexibility to make the career changes they’d like. This feeling of “being stuck” due to other forces and commitments has led more than 50% of employees in this middle age group to be disengaged in their work, Adams said, citing results from Mercer’s “Inside Employees’ Minds” research in 2011.
While some Gen Xers are giving it their all, eager to move up the career ladder to better meet their many financial obligations, those who have become disengaged present challenges for employers. “Disengaged employees show up to work every day, not really giving their best, not giving their all; but they show up because they have to,” Adams said. “On top of feeling disengaged, Gen Xers are starting to face the stressful sandwiching that happened to Baby Boomers at the end of the 20th century — putting their kids through school, saving for college, and caring for ageing parents while also trying to plan for their own future.”
Companies Must Be Proactive
Companies and their leaders should make an effort to assess workers in this generation to find out if they like what they’re doing or have different interests and skills that can be better utilised in a more suitable area of the organisation. In many cases, talent development programs can lead to better engagement, a better fit for employees, and better performance for companies.
Companies have a significant opportunity for supporting and coaching Generation Xers on the decisions they’re making today as it relates to their careers, investments, and retirement.
Employers who decide to proactively help their workers develop an income plan for retirement while helping them manage and prepare for current and future health care costs can gain a competitive advantage. According to the 2013 Mercer Workplace Survey, 93% of employees said getting health benefits through work is just as important as getting a salary. And, 86% said retirement is a major savings objective.
A tighter alignment between retirement and workforce management strategies also will help keep employees engaged and loyal, said Michelle Smith, Partner and Financial Advice Leader, Pacific at Mercer.
“Making the additional effort to support the workforce with retirement planning fits naturally under this umbrella and it does not have to mean increased employer spending; rather it helps employees help themselves.” Smith said
Retirement Identity Crisis
Previous generations could reasonably expect to stay with one or two employers, within the same industry, throughout their working lives. Generation Xers, on the other hand, will be forced to not only switch employers, but possibly switch careers three or more times before they reach retirement age in 2040.
As a result, the traditional definition of retirement is now debatable, said Smith.
“Traditionally the employee proposition was a cradle-to-grave type of an arrangement with a generous pension for all of your years of hard work. That was the traditional view of retirement,” Smith said. “Today retirement is going through a bit of an identity crisis.”
Smith said the idea of retirement in the future may be more about helping employees navigate the cycles of accumulating and deccumulating assets. The idea is that employees will earn money in one career, invest their savings, spend it, and then start the earning process over again in a different career. They will also need to consider how this process might operate when one of the largest future assets, superannuation, is preserved.
“Perhaps I take a break, or a sabbatical, to pursue other interests, and use my investments to support myself. Then, I come back and pursue another career — the next asset-accumulation phase,” Smith said.
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