The leading segment of the Gen Y cohort enjoyed the best of times. A roaring economy awaited them and they flocked to employers eager for workers. At the height of the madness signing bonuses for newly minted college grads were not unknown. It is the worst of times for the last segment of that same cohort. And it does not look rosy for the leading segment of Gen Z either.
The chart above (hat tip Joe Malchow for PowerLine) may be tough to read, but the whole story is in the gold line (labor force participation of age 55 and older) and the maroon line (labor force participation of ages 20 to 24). In the competition for jobs, the old are eating the young alive, and this will create profound challenges for HR in the next decade.
Employers of workers in their 20’s have, since the 80’s, relied upon two fundamental expectations: 1) They had early job experience where they learned the value of showing up on time, working when expected, and meeting the expectations of a manager, and; 2) They had graduated from college where they had to apply themselves over the long haul, acquired foundational knowledge and mastered the tools for future learning. Those expectations are becoming inoperable.
The last segment of the Gen Y cohort had few opportunities for work as a teenager, and were likely focused on passing state mandated tests and college prep courses. The purpose of college for this group, quite rationally in my mind, was to earn a work certificate (still referred to as a diploma); if some learning came along the way, so be it. They may be a talented bunch, but in terms of work readiness they are behind the curve as compared to the first segment of their cohort.
Since 2008 this segment has found the working environment inhospitable. Saddled with education debt to be serviced, they moved into available jobs; the number of bartenders, waitstaff and doormen with college degrees is simply appalling. Worse, they shoved less educated and prepared fellow segment members right out of the economy. Accordingly, the labor force participation rate for this segment is far lower that it should be and falling.
So riddle me this, HR Pros. Where does our workforce come from when the oldsters move on? The segment that never attached to the habits of work? Think we can just skip over this segment and rely on Gen Z? Fat chance, since the numbers are barely there and the leading segment of the Gen Z cohort is in the same boat with the last segment of Gen Y.
We are staring down the barrel of an enormous hiring, training and development challenge within the next ten years. Those who succeed in meeting this challenge will flourish; those that don’t with either substantially automate their business or face a grim ride to insolvency.