The Wall Street Journal provides an article that does a nice job of laying out the upcoming shortage of workers.  The focus is upon the different generations and the general drive behind each.  The article is rather rudimentary, but it provides a clean view of the problem.

First:

Americans of childbearing age simply are not producing enough kids to meet the economy’s future need for workers, notably in fast-growing fields such as medicine and engineering. The shortfall is coming largely because the fabled baby boom generation was so huge—75 million Americans born in the 18 years from 1946 to 1964—that no other generation can be expected to match it any time soon.

Ok, that point leads to this:

They are being replaced by two younger generations, each with its own desires regarding the opportunities and rewards available at work. The challenge for hiring managers is to figure out what these workers’ needs are, so that employers will be able to find them, hire them, and keep them on the job.

Retention is going to be a top business initiative over the next couple of decades which is a simply outcome of supply and demand.

The baby boomers: They place a heavy emphasis on work and successfully climbing the corporate ladder. Work is an anchor in their lives.

The Gen Xers, born between 1965 and 1980: They enjoy work but are more concerned about the work-life balance.

Generation Y, also known as Millennials, born after 1980 and now age 28 or younger: They often have different priorities than their Gen X and baby boomer counterparts, Smith says.

“Because of their reliance on technology, [Millennials] think they can work at any time and any place and believe they should be evaluated on the basis of work produced—not on how, when or where they got it done. Curiously, most Millennials want long-term relationships with employers, but on their own terms,” Smith says.

And finally, here is the rub we have seen between Baby Boomer managers and Gen Y employees:

The Millennials respond poorly to those who act in an authoritarian manner and those who expect to be respected due to higher rank alone. They believe they can learn quickly, take on significant responsibility and make major contributions far sooner than baby boomers think they can.

Exactly.  There has to be a balance between the boomer manager allowing the Gen Y worker to grow quickly in the role and the Gen Y worker not expecting too much, too fast.  There is distinct tension between these two goals.

As they see, read the entire thing.

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The doom-and-gloom economic reporting continues and as a sales manager it is important to keep a pulse on your team.  More articles are being released on the topic of employees getting skittish about their future with the company.  Bob Rosner offers some good advice for these employees in his Working Wounded blog:

Be careful to not drink the Kool-Aid with coworkers by being hyper-critical about your company’s future. Get an outside opinion. If you work for a public company, talk to a stock broker. A search in our city listed 391 brokers who offer a free consultation. If you work for a smaller company, check with vendors to see if they’re getting paid on time. Don’t stop there — also get a read on your department. Is your budget increasing? Do you work with vital customers? These are great check-ups to see if a layoff could be in your future.

…

Do you like, love or just plain hate your job? If you’re really unhappy, try information interviews with people on a career path that interests you. Passionate people enjoy sharing career tips with others. You could also obtain a skills and personality evaluation to determine your vital signs. Your work decision-making shouldn’t just revolve around your company or region’s vitality — it should reflect your passions too.

There will be plenty of salespeople jumping ship if they find a more secure opportunity.  Now is the time when sales managers have to secure their top talent before they drink the Kool-Aid.  Take the extra time to interact with your team and get a read of their present mindset.

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Another good article here from WSJ titled New Career, Same Employer.  The gist of the article:

Ernst & Young LLP last year named Nancy Harley director of career mobility for the Americas, a new position designed to help employees of the accounting firm move into new roles. “The longer someone stays intrigued and challenged, the longer they’re going stay with the firm,” Ms. Harley says.

Observers say employers are creating or expanding these programs to improve retention rates in a competitive job market, particularly as Baby Boomers begin to retire.

The initiatives typically include Web-based programs for evaluating employees’ career goals and suggesting relevant paths.

Interesting title - director of career mobility.  That position, or some form of it, may become quite common in the next 5 years.  Evaluating skills, talents and motivations is already a common tool used today by companies in both hiring, evaluating and promoting.

Here is an example from the article of how a large company handles this topic:

Accenture’s career-change initiative includes resources such as an online skills-assessment tool and a Web page featuring video clips of workers who have changed careers at the company. Every Accenture employee has an internal career counselor. Employees are urged to work with these counselors to develop a plan, including searching the company’s internal online job board.

I like the idea of an internal career counselor.  Obviously, Accenture is large so they have the ability to offer these resources.  However, managers can still be tuned into these topics with their employees.  This management skill will surely become more important as Gen Y increasingly becomes the largest generation in the workforce.

On a related note, I wrote an article a couple years ago that talked about Gen X and Y desiring a skills path for their personal development.  You can read it here.

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Yesterday I posted on this “determine your own vacation time” approach to management.  It is totally foreign to me.  Today I come across another company with the same approach.  This HRE Online article - In Their Own Words - contains comments provided by Gen Y workers on a recent survey.

First the vacation comment (my empahsis):

CarMax

“Time away from work policy instead of vacation and sick days. There is not a set amount of time you can take, you just work it out with your manager. The office’s atmosphere is very bright and open. Management is very accessible and will answer any questions that you have. They encourage management throughout the company in order to give you a better overall understanding of the company.”

This one is rather astounding:

Quicken Loans

“When I was in training, it was mid-winter. On the first very cold day of the year, I had an amazing experience. I pulled into the very large parking lot and saw about eight people driving golf carts around, picking up employees. It was none other than the owner, CEO and president along with other executives of our company out there in the freezing cold picking us up and driving us to the front door. Upon walking in, there were donuts and warm apple cider waiting for us. If that’s not employee appreciation, I don’t know what is.”

We are up here in the frozen tundra of Minnesota so I am rather appreciative of this effort.  Owners, CEOs and Presidents that are willing to actually give of their time and effort for their employees reap greater retention rewards than just monetary rewards.  Yes, I know money goes a long ways, but imagine combining a monetary reward with this effort.  If I were an employee at Quicken Loans, I would be blown away with this effort.

You know, sometimes the best retention efforts are not wrapped in strategy, planning committees and focus groups.  They are simply people serving their employees in an unexpected, thoughtful manner.

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BusinessWeek.com’s playbook section offers a very short, but highly intriguing article title How Netflix nets and keeps talent.  Here it is in it’s entirety:

PAY LAVISHLY Higher-than-average salaries—and tying bonuses and raises to the market, not a pool—can make stars less likely to bolt. Money is no object in hiring.

PROVIDE COMPENSATION CHOICE Employees are more likely to excel if they can pick how much of their compensation they get in stock rather than cash.

FOSTER TALENT HUNTERS Encouraging everyone to hire the three people they’ve loved working with most during their careers creates an intense, fun workplace.

LET THEM GO Don’t give B performers a middling raise. Give them a decent chunk of cash and show them the door. And don’t surprise them. The laid-off leave with their dignity.

LIMIT RULES They reduce error. But they also stymie innovation. At Netflix, employees are responsible for their choices, even in how much vacation to take

Let Them Go is one we often see in companies…that is they accept mediocrity and do not let B performers go.  In sales this approach is cancerous.  The mediocre performers often have a negative effect on the top performers.

How progressive is Netflix’s management?  Employees determine how much vacation to take?  That is the first time I have encountered that approach.  That is an intriguing approach, isn’t it?

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Commission-only sales plans are risky in my opinion.  I know they are the truest form of selling - you eat what you kill.  I simply think that many salespeople view this structure as a lack of commitment from the company.  I’m not saying that is accurate, but I have talked to many salespeople under these plans and this is their perception.

Fortune Small Business discusses this topic in their article Why to be wary of commission-only sales staff:

“If you hire someone and you’re not really willing to invest time and resources in them - and that’s really what a commission-only sales person suggests - then you’re missing an opportunity,” he says.

Good sales people communicate to prospects whatever makes your company special.

Again, the investment (or lack of) is the issue here.

“With the high churn rate of commission-only sales people, providing a position where there’s an equitable base and a reasonable expectation to succeed is probably less expensive in the long run,” she says.

Commission-only sales people who are just in it for the money “are the ones who will bail out first if hard times hit,” says Ross.

I’ve seen them leave before hard times hit.  The retention factor for these comp plans is minimal.  We have encountered sales comp plans that swung too far to the other extreme.  Those salary-intensive plans can create an entire set of problems themselves.  In the end, I am a proponent of a plan that blends salary with a commission.

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Inc.com has a short article reporting the survey results of HR professionals that shows a shifting trend:

In a survey of 413 HR professionals, more than half identified talent management as their top priority, and were planning to improve their rewards and benefits programs.

Most employers cited employee retention among their five toughest challenges, ahead of health-care costs, the survey found. Last year, 80 percent identified health-care costs as their biggest challenge.

I fully expect retention will move into the top spot and stay there for quite some time (i.e. years) as the Boomers retire.

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The principle of owning vs. renting is powerful especially when it comes to an employee’s job.  Ownership of a job is a fickle thing.  Yet, I have worked for managers who assigned responsibility and provided enough autonomy to allow me to excel in my role.  The younger generations seem to relish this approach even more than my Gen X group.

ManageSmarter.com offers up an article with a clear title - Padlocking the Revolving Door on Turnover.  There are 4 good points to support the article’s title, but one stands out clearly:

• Foster a sense of ownership within employees. The old encouragement to “act like you own it” is good advice. The challenge is making the adage practical. It is difficult to build a sense of ownership when the plans, activities, and details are dictated to you. Managers need to find ways to actively engage employees in contributing ideas to plans, activities and outcomes. The more employees share in the rewards of success and are supported in turning failures into learning and growth opportunities, the more they can build a sense of ownership for their projects and become fully engaged in providing successful outcomes consistently.

Don’t underestimate the importance of this approach.  Few employees, though there are some, want to work under dictatorial management.  The key point I see in this ownership approach is that it provides a path to growth for the employee.  Gen Y craves this career track as have the generations that preceded them.  The difference is that many Gen Y employees will simply leave the company to gain more skills at a different employer.

This fact leads back to the premise that people tend to remain in place when they own while they have a tendency to move around more when they rent.  Keep that in mind as you develop your team in hopes of greater retention.

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From the Herman Trend Alert (sorry, no link):

A global survey of 4,500 workers indicates that more people anticipate leaving their employers this year than last. In the 2006 BlessingWhite study, 65 percent said that they expected to “definitely” remain with their employers through the year. In the 2007 study, that number was down to 58 percent.

Also of interest, more respondents in 2007 said that there is “no way” they would stay (eight percent up from six percent—a 33 percent increase). European employers face the greatest threat: eleven percent said there is “no way” they will stay.

Moreover, employees in Europe and Asia appear less content with their current jobs than those in the United States or Canada. Only 49 percent of Europeans and 54 percent of employees in the Asia-Pacific region expect to stay with their employers, compared with 60 percent of North Americans. (We think that market volatility and the threat of recession was working here.)

“‘No way’ they would stay” is an interesting turn of phrase for a survey question.  I agree with their parenthetical comment that recession concerns are swaying North American employees.  Still, it is notable that so many people seem to have their mind set already.

I am curious to know how this data breaks out among the different ages.  My suspicion is that the Gen Y employees are far more eager to move on to the next opportunity than the older generations.  Career path is crucial to Gen Y, the majority of whom are at the beginning of their career.

If that suspicion is accurate then this graph becomes a significant concern for many companies:

We have been talking for years about employees’ lack of trust for their employers. This trust issue motivates them to feel like they must take control of their own careers. Our research indicates that workers are looking to their employers for training, education, and career pathing. This fact should concern the many organizations that eliminated their in-house training functions during the last economic slowdown and are still playing “catch up”.

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A statistic from the Career News newsletter (sorry, no link):

One in four U.S. workers is resolving to get a new job this year. The survey found that 26 percent of employed Americans said they will look for a new job in 2008.

I thought that number seemed somewhat low - I was expecting a number closer to 33%.  Retention will always be a top priority for sales managers, but it may be that the slowing economy will cause more workers to stay in their current positions this year.

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