The millennial, boomer, Gen X and Gen Z-er mistake employers and advisors make
Workers' life experiences, goals and financial status are more likely to reflect who they are than the year they were born.
“Kids today got it made.”
“OK, boomer.”
“I need a teenager to make this gizmo work.”
Stereotypes can be an easy way to organize a disorganized world, handy shorthand for complex issues and easy grist for standup comics.
But when it comes to crafting policy for their workforce, employers should be wary of generational labels that can result in mismatched job assignments and overlooked potential, according to two recent reports.
While age and generational experience do help shape workers’ life perceptions, other considerations such as where they are in their career, how they’re fixed financially and what they want out of life are more accurate — if more complex — indicators of who they really are.
A report released this week by the National Academies of Sciences, Engineering, and Medicine said employers who rely on generational assumptions should instead concentrate on workers’ individual needs.
In their study, “Are Generational Categories Meaningful Distinctions for Workforce Management?,” researchers found that the fast-changing landscape for workers resulting from globalization, technology and changing workplaces — think telecommuting and, particularly in the COVID-19 era, Zoom conferences — have spurred employers to change their own management practices and expectations.
But those same employers have sometimes fallen into a trap of making assumptions based on workers’ age group and presumed affinities, rather than taking a more individualized approach, it said.
According to industrial psychologist Nancy Tippins of Greenville, South Carolina’s Nancy Tippins Group, who chaired the committee producing the study, research into generational characteristics has fallen short.
“Much of the research that’s been done to date on the differences between ‘Gen Z’ or ‘boomers’ in the workplace has serious limitations, and can mislead employers about what their workers actually need,” said Tippins.
“Our report explains how researchers could improve future studies on how age and societal change affect an individual’s values and behavior, and make their results more useful for informing management decisions,” she said.
Most such research has been conducted through surveys that can gauge respondents’ replies at a given point in time, the study said, but did little to show how their generational attitudes and goals may have changed over time.
“Studies that have found millennials are less concerned with career advancement than with achieving work-life balance, for example, can be better explained by age differences or current work conditions,” said a synopsis of the report.
Contrary to widely accepted generational generalities, it said, deeper investigation reveals that people of the same generation are no more likely to share the same expectations and values than those from other generations.
Another study released by the Empower Institute stressed the same point for financial planners and retirement advisers.
The whitepaper, “It’s Not About Generations,” said that factors such as life experience, current and hoped-for financial status and retirement goals are more important considerations than when a person was born.
The report breaks down generations and some the more common stereotypes associated with them:
- Boomers are conservatives who want to work in offices on business-hour schedules, and are “set in their ways,” for example.
- Gen Xers? They’re perceived as sarcastic, debt-laden skeptics who like to communicate by email or text.
- Millennials are entitled, self-absorbed, lazy text messagers who need “meaningful work,” while Generation Zers are tech dependent, preoccupied with their health and “want to do things, not buy things.”
Nice and easy categorizations, but not necessarily true.
“The problem with using these labels isn’t just that they’re inaccurate,” the study said. “Recent research also shows that generational stereotypes can affect behavior.”
One study revealed that trainees perceived to be older were rated lower by trainers despite their actual performance.
In a survey, Empower researchers said 65% of respondents thought generational differences are “overstated.”
53% said their “ideas and feelings about money varied greatly from life stage to life stage,” and 40% “identify more with others who are going through the same life events than with those in their defined generations.”
Workers have always faced competing pressures and financial demands, some foreseen and some unexpected.
“For those in the middle of major life transitions, juggling a number of competing financial demands today makes saving for tomorrow’s retirement difficult,” the report said.
“It is important to note that the global pandemic will likely affect many of these in events, such as a job loss, medical emergencies and the recession, to name a few. Because of this, we will likely see changes in how retirement investors behave, but with so much uncertainty, it is too early to tell how behaviors will change.”
The survey said more than 25% of respondents said they “face too many big expenses to focus on retirement.”
“It doesn’t make sense to lump an entire generation of millions of people into one group and assume they all have the same experiences or think about financial planning in the same way,” said Empower Retirement President and CEO Edmund Murphy III in a statement accompanying the report’s release.
“Financial planning and goals should meet people where they are in life, consider their life experiences and personal characteristics, and then lay out a strategy that helps get them to their savings goals,” said Murphy.
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