Excerpted from RainmakerThinking, Inc.’s white paper, The Great Generational Shift
What is the Great Generational Shift?
There is a “Great Generational Shift” underway in the workforce today. This is the post-Baby Boomer shift that demographers and workforce planners have been anticipating for decades. It is not only a generational shift in the numbers in the workforce, but an epic turning point. This is the final stage of a historic period of profound change globally and a corresponding transformation in the very fundamentals of the employer-employee relationship.
The Numbers Problem: Workforce 2020
While there are always different people of different generations working side by side in the workplace, today there are as many as six different generations, depending on which demographic definitions one uses. The workforce is aging on one end of the spectrum and getting younger on the other. In the middle there is a gap, with the prime age workforce shrinking as an overall percentage of the workforce.
Generations in the workplace in 2016. The oldest, most experienced people in the workplace, “pre-Boomers,” those born before the post-WWII “Baby Boom” began in 1946, are still greater than 1% of the workforce. The Baby Boomers (born 1946-64) are 30%, Generation Xers (born 1965-77) are 27%, and The Millennial Generation is 42%.
Because both the Baby Boomers and the Millennials are such large generations with such long birth-year time spans by the broadest definitions, we have found it useful to split them each into first-wave and second-wave cohorts. Based on our model, here is a chart of the generations in the workplace today:
The age bubble. On the older end of the generational spectrum, the workforce is aging, just as the overall population is aging. This is particularly notable in Japan, most of Europe, and North America. In North America alone, ten thousand Baby Boomers have been turning 65 every single day since 2011. The Boomers are filling up an “age bubble” in the workforce such that there are many more people at or near the ordinary age range for retirement. The exodus of the first-wave Boomers from the workplace – postponed for several years by the economic crisis that began in 2008 – is now swift and steady. By 2020 Boomers will be less than 20% of the Western workforce; older Boomers (born before 1955) will be less than 6%. What is more, Boomers who do remain in the workforce will continue trending heavily toward “reinventing” retirement and late-career-pre-retirement: Working less than full-time, often partially telecommuting, and often working nonexclusively for more than one employer.
The youth bubble. At the same time, the fastest growing segment of the workforce is made up of those born 1990 and later, so there is a growing youth bubble on the younger end of the spectrum. The youth bubble is growing even faster in “younger population” regions of the world. But even in “older” North America, Europe, and Japan, the youth bubble in the workforce is rising much faster than in recent years because employers are once again hiring new young workers after several years of formal and informal hiring freezes resulting from the economic crisis. By 2020, second-wave Millennials (those born 1990-2000) will be greater than 20% of the Western workforce and another 4 – 5% will be made up of post-Millennials born after the year 2000. And in most of the world, the youth bubble will be much, much larger. The rising global youth tide will bring to the workplace radically different norms, values, attitudes, expectations, and behavior.
Workforce 2020 – Remember “2020, 20, 20.” By the year 2020, the Western workforce will be made up of less than 20% Baby Boomers and more than 20% second-wave Millennials, (plus another 4 – 5% of post-Millennials).
The rising global youth tide. The youth bubble is much, much larger in Africa, Latin America, and much of Asia. Second-wave Millennials are already, in 2016, greater than 45% in India, Mexico, Brazil, Indonesia, and Vietnam; in Nigeria greater than 60%. By 2020, in these younger parts of the world, those born 1990 and later will be more than 60% of the workforce. Considering the increasing globalization of the workforce, one important feature of the growing youth bubble is that it will be increasingly global, with a much greater percentage of the new young global workforce coming from outside of North America, Europe, and Japan.