TORONTO — Boomers are making up less of the Canadian workforce than they used to and to some surprise, it is the Gen Ys who are benefiting more than the so called “quiet majority” of Gen X workers.
That’s the finding of a new PwC report called Value Through Your People, http://www.pwc.com/ca/banking-workforce, prepared for the banking industry, but with circumstances parallel to what is happening in other industries, say the authors.
Says the report, “With older workers staying on longer—many in senior positions—and younger employees with a hunger for advancement coming up from below, the potential for disaffection in the Generation X ranks is significant.”
“The findings show that promotion rates for Gen Ys have held steady at close to 20% over a three- year period, while Boomers’ promotion rates fell from 5% to 3%. What was not expected, however, is that Gen X promotions rates would fall from over 11% to less than 10% over the same three years studied (2008-2010) during what should be peak years of upward mobility,” says Dr. Philip Hunter, a director in PwC’s People and Change practice.
Hunter believes that Gen Xers are perhaps being “squeezed” by older workers delaying retirement, and younger, more aggressive Gen Ys intent on rising through the ranks quickly. “Other contributing factors may include changes to operating models that favour relationship skills rather than management expertise, and career paths characterized by more stringent promotion criteria at more senior levels, which would disproportionately impact Gen Xers,” he says.
“Banks and other industries with multi-generational workforces have to be taking a different approach in thinking about career progression, the formal promotions process and changes to their operating model,” says Karen Forward, a director in PwC’s Financial Services People and Change practice.
Between 2006 and 2010, the ratio of Baby Boomers to Gen Y employees at Canadian banks shrunk fr0m 6:1 to less than 2:1. At this rate, Gen Y will outnumber the boomer generation in Canadian banks within the next three to five years. At the same time, Gen X is by far the largest generational employee group for Canadian banks, comprising a “quiet majority” of between 55% and 60% of the total workforce.
“Banks need to be asking questions such as, ‘how does each generation contribute to our organization across our lines of services and corporate functions?’ and ‘are we helping the different generations to work together?’” says Forward. “Banks will need to look at collaboration tools, skill transfer programs and address the Gen X ‘squeeze’ to keep these key employees engaged,” she says.
“The challenge will be making certain that Gen X employees feel valued by providing them with opportunities to not only gain experience from Baby Boomers, but to also share their own expertise and knowledge with Gen Y,” adds Hunter.
The report also covers information on retention and loyalty with specific data on Gen Y employees. For example, it shows that voluntary turnover among Gen Ys between 2006 and 2010 declined from 25% to 16%, which can be partially attributed to the economic volatility over the period, but could also be the result of other factors such as organizations shaping work environments that are more suitable to younger workers.
Another area in the report addresses women in the banking workforce. Women as a percentage of the workforce has held steady at approximately 67% over the past five years. And the percentage of executives who are women has remained relatively unchanged at approximately 25% over the same period. Using a broader Employment Equity Act definition, women in senior banking roles have risen from 2% in 1987 to 32% in 2010, according to the Canadian Bankers Association.
Forward says, “It is important to recognize that the banking industry has come a very long way with respect to women in leadership, although there are still challenges. One area the banks may wish to consider is that as they respond to regulatory reform and increased importance of risk management, how can they be sure career paths are being defined in such a way to encourage senior women to be well positioned for leadership roles?”
Baby Boomers refer to those born from 1943-1960, GenX from 1961-1981 and Gen Y’s from 1982-2000.
PwC’s study of workforce composition and performance in the Canadian banking sector included a review of data submitted for calendar years 2006 to 2010. The sample over the time period included large and medium-sized Canadian banks, including the “Big Five.” PwC’s Saratoga™ human capital effectiveness survey covers over 120 workforce metrics.
Saratoga is the largest and most comprehensive database of HR performance measures. PwC Canada offers this evidence–based service to address your organization’s strategic challenges by applying a range of quantitative and qualitative measurement and benchmarking tools. Go to www.pwc.com/ca/saratoga for more information.
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