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December 1, 2022
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 contributed to 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 U.S. population to understand how we got here and where it goes from here.
Baby Boomers: 75 million (59-77 years old)
Boomers – individuals born between 1946-64 – are the oldest generation still in the workforce, making up around 25%.
Out of the 75 million, 41 million are still in the workforce.
During the COVID-19 pandemic, 29 million, or 39%, of Baby Boomers retired, which is one of the factors contributing to the current employee shortage.
Many dubbed that period the Great Resignation, but it could have also been identified as the Great Retirement.
Gen X: 66 million (43-58 years old)
Gen Xers – those born between 1965-80 – make up the second largest percentage of the workforce, with 33%.
This generation contains a majority of company leaders, as well as startup founders, with 55% being Gen Xers.
I fit into that category.
Millennials: 72 million (27-42 years old)
Millennials – individuals born between 1981-96 – make up the most significant percentage of the workforce, with 35%.
This generation is up and coming and will likely 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 – those born between 1997-2001 – make up around 5% of the workforce.
While Gen Z continues to enter the workforce, they will fill some of the openings, but as the second smallest generation, it’s likely that employee shortages will only increase.
When studying generational math, we can gain clarity on how people problems became the number issue for SMBs.
But more importantly, what people’s challenges will likely look like in the future.
Some key takeaways include:
The United States had 10.1 million jobs open in August 2022.The employee shortage was caused by several factors, including mass retirement of 29 million Baby Boomers, a lower birth rate and a lower population of Gen Y coming into the workforce.The second largest generation of Millennials is already in the workforce and there are still 10.1 million jobs open.As Baby Boomers continue to retire in larger numbers than there are Gen Y coming into the workforce, open jobs will continue to increase.Millennials and Gen Ys seem to look at work differently, as many of them are receiving the largest wealth transfer ever from their Baby Boomer parents.The only potential variable that could slow down open jobs reaching at least 15 million-plus in the coming years is immigration.The generational math provides clarity as to why people issues have been and will continue to be, the No. 1 issue for all businesses, but even more so for growing SMBs.
Now that we all understand the problem, there are several steps you can take 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 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 plan.
Succession planning and knowledge transfer have become prioritized talent strategies for this company as they work to minimize the impact of people issues on the business and its team for the future.
Being knowledgeable about the generational math of the U.S. population can help us understand how people problems became the No. 1 issue for most organizations.
Generational math can also help us understand how people shortages and problems will continue into the future.
Understanding the generational math of both the country and your organization can help you 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.
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.
