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Net Generation

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Today\'s youngest workers, the Net Generation, will redefine the workplace of tomorrow. Given the Net Gen\'s technology-centric worldview, it should come as no surprise that they have very specific …

Today\'s youngest workers, the Net Generation, will redefine the workplace of tomorrow. Given the Net Gen\'s technology-centric worldview, it should come as no surprise that they have very specific expectations about how technology will be used in the workplace. Above all else, they anticipate that a digital-social ecosystem will be the platform upon which people and businesses - communicate, collaborate and innovate. For businesses, this type of digital-social environment will require a transformation not only in technology, but also in organizational process and culture. Learn how HR can lead workplace change by building awareness of this shift and developing a strategy that leverages new workplace technologies to engage Gen Y and older workers in ways that drive growth and innovation.

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  • 1. The power of the Net GenerationJanuary 2012Why businesses must attracttoday’s youngest workers andembrace social technology todrive future performance.At a glanceNet Gen culture willredefine the workplaceof tomorrow: It will besocial, collaborative,and fully digital.Meeting the workplaceexpectations of NetGeners will requirea significant shift intechnology and culturefor many organizations.HR has an opportunityto lead workplace changeby building awareness ofthis shift and developing astrategy that leveragesnew technologies.
  • 2. Introduction It’s an ambiguous time in business. Some CEOs are preparing for growth while others are steadfastly guiding their organizations through an unrelenting economic downturn. Economies may diverge, but CEOs and HR leaders across industries share a common concern: A swiftly evolving labor pool has made attracting, engaging, and retaining top talent an unprecedented challenge.The Net Generation At one end of the spectrum, CEOs Already Generation X workers, worry they will not be able to attract who comprise more than half of the right talent to fuel growth and the workforce, are replacing Boomers innovation. The fact is, even with the in leadership roles. And as Gen X US unemployment hovering at scales the corporate ranks, a new 9% and 4.4% for those college breed of employee with very different educated or higher1, finding a skilled expectations and attitudes is right candidate often consumes months behind them. of recruiting efforts. And the talent squeeze is getting much tighter: Ready or not, today’s youngest The ManpowerGroup says that workers, the Net Generation, 52% of US companies are having already comprise over a quarter difficulty filling positions, a sharp of the US workforce, according to increase over 14% in 2010.2 Lack of the Bureau of Labor Statistics. As experience and inadequate skills are the fastest-growing employee group, the most commonly cited obstacles they will play a greater role in the to filling vacant jobs. organization and leave a lasting impact on the way HR attracts, engages, At the other end, companies are and retains talent. bracing for a significant shift in the workforce as Baby Boomers prepare While this new wave of workers to retire and the next generation of has been given several labels— employees take their place. In PwC’s Gen Y and Millennials among 14th Annual CEO Survey, 35% of them—we believe their affinity for CEOs said they are troubled by the and connection to technology and imminent retirement of Boomers.3 the Internet is every bit as pertinent as their year of birth. Net Geners grew up in an era in which the use of laptops, smart phones, instant messaging, and social media were more reflexive than revolutionary.1 Source: United States Bureau of Labor Statistics, http://www.bls.gov/news.release/empsit.t04.htm2 Source: ManpowerGroup, 2011 Talent Shortage Survey Results, May 2011 (page 4)3 Source: 14th Annual Global CEO Survey—PwC PwC 1
  • 3. What is the Net Generation? Although several monikers have been used for this generation— Gen Y and Millennials among them—it is the Net Generations’ connection to technology, and not their year of birth, that differentiates them from other generations. This includes:Thanks to the broadband Internet, • Having a lifelong affinity for technology and the Internet they are accustomed to ubiquitous • Being accustomed to ubiquitous digital connectivity, instantdigital connectivity, instant access access to information, and mobilityto information, and the boundlessmobility made possible by Internet- • Being collaborative by nature and trust online social relationshipsready mobile devices. In fact, one-third • Desiring a fluid balance of work and life of college students believe that theInternet is as important as air, water, • Strongly believing in training and one-on-one mentoringfood and shelter for the human race,and on a personal level, more thanhalf said they could not live withoutthe Internet as an ‘integral part oftheir lives’.4Given their technology-centricworldview, it should come as In other words, they expect the Beyond attracting and retaining theno surprise that Net Geners have technologies that inform and empower talent of tomorrow, organizations alsovery specific expectations about their personal lives will also drive must find ways to transfer corporatehow technology will be used in communications and innovation in the knowledge to Net Geners, which willthe workplace. Above all else, workplace. For businesses, this type of become increasingly important asthey anticipate that a digital- digital-social ecosystem will require a Boomers retire in greater numbers.social ecosystem will be the transformation not only in technology, However, Net Generation workers’platform upon which people but also in organizational processes ways of learning and working areand businesses—communicate, and culture. vastly different from those of previouscollaborate, and innovate. generations. As a result, managing Retaining these workers will be a multi-generational workforce will challenging, yet essential for business not only require different approaches, continuity. Net Geners are restless, but an employee value proposition with an average job tenure of 18 to engaging a multi-generational months, according to the US Bureau workforce that appeals to the variety52% of Labor Statistics. That’s a serious of different generational values. issue for HR because the sum costs related to turnover can represent Net Gen culture will redefine the from 12% to 40% of a company’s workplace of tomorrow: It willof US companies are having pre-tax income.5 An effective strategy be social, collaborative, open anddifficulty filling positions, a combined with the technologies to fully digital. Forward-thinking HRsharp increase over 14% in 2010. engage and retain these workers will organizations are championing be critical to a business’ bottom line. and implementing strategies that incorporate these characteristics into every aspect of the talent life cycle. One thing is certain: Technology will play a pivotal role in attracting and retaining the talent necessary to drive business innovation and growth. 4 Source: Cisco Connected World Technology Report. http://www.cisco.com/en/US/netsol/ns1120/index.html 5 Source: PwC Saratoga 2011/2012 US Human Capital Effectiveness Report, “Executive Summary”, 20112 The power of the Net Generation
  • 4. How to prepare forNet Gen workers Meeting the workplace expectations • Workplace environment: A of Net Geners will not be business as flexible, collaborative, and usual. It will require a significant shift entertaining work environment in technology and culture for many that leverages technology to organizations. Following are four engage and interact in new ways, major components of a strategy to with 24/7 access to company get your organization Net Gen-ready: information and communications. • Recruiting and employee • Training and development: engagement: Social, collaborative, Interactive learning programs and pervasive processes, systems that are customizable and blend and tools to find and engage traditional classroom methods, employees (even before they join relationship-based mentoring, the organization!). and digital formats. • Better tech skills: Raising the digital IQ of the existing workforce to better understand the social media and collaboration landscape, including sites such as Facebook,While on-campus recruiting drives will Twitter, and LinkedIn.remain an effective and necessary program,today’s college seniors use social media such asFacebook, LinkedIn, and Twitter to learn aboutcompanies and employment opportunities. PwC 3
  • 5. Recruiting with social media works, in part, because it draws upon Net Geners’ trust in Social tools used by HR to attract peer groups. They are innately social, and recruits are not limited to LinkedIn, the use of social media and internal referral Facebook and Twitter, however. Today HR organizations are implementing networks that enable new hires to pass along more robust social recruiting solutions career opportunities to peers, friends, and from vendors such as SuccessFactors, students will appeal to their natural affinity Kenexa and Taleo, and leveraging a variety of other social tools to better for digital collaboration. engage potential candidates. Listening to, and engaging potential candidates is critical, as once Net Geners have identified a prospectiveRecruiting and Consider, for instance, these uses of social media. Some recruiters employer, most will click straight to theemployee engagement source to submit their application at broadcast video testimonials fromTo attract the workers of tomorrow, the company’s website. The Net Gener current interns that provide anrecruiting practices should take will expect an interactive application insider look at a “day in the life” atfull advantage of social networking portal that provides instant access to the company. Others have createdtools. While on-campus recruiting application guidelines, an interactive a LinkedIn application that allowsdrives will remain an effective timeline that describes the recruiting students to track the career pathsand necessary program, today’s process, and a storehouse of necessary of new trainees to understandcollege seniors use social media documents. Their social Internet is how a career develops within thesuch as Facebook, LinkedIn, and defined by a free give and take of organization. These approachesTwitter to learn about companies information, and Net Geners anticipate enable recruits to interact with peersand employment opportunities. that a company’s application portal and HR, creating the type of genuineReciprocally, as candidates become and hiring process will be similarly digital relationships that are naturalmore attuned to engaging with interactive, enabling the company to Net Geners.companies online, there is an and the candidate to learn whatincreasing expectation from employers Similarly, HR departments are each has to offer.that candidates are well versed on employing internal social networksthe business and opportunities for to create a relationship and dialogwhich they are applying. with employees. Some, for instance, ask staff for referrals and feedbackThese are important considerations, on existing job candidates based onbecause despite social media having similarities in experience or education.proven to be an efficient platform forcreating awareness about a company Recruiting with social media works,and its career opportunities, its impact in part, because it draws upon Netis far deeper than merely delivering Geners’ trust in peer groups. Theyinformation. Social networking are innately social, and the use ofchanges the relationship with potential social media and internal referralrecruits from a one-time hiring event networks that enable new hires toto a connection that is ongoing, pass along career opportunitiesengaging, and often peer-based. to peers, friends, and students will appeal to their natural affinity for digital collaboration.4 The power of the Net Generation
  • 6. Learning the power of play with game-based training Training need not be a chore. Increasingly, HR organizations are finding that game-based training provides an interactive, engaging, and competitive way for employees to learn skills and workplace processes. It’s also quite effective. A University of Denver Business School study found that employees trained with video games have 11% higher This type of employee-focused factual knowledge level, a 14% higher skill-based knowledge level, and environment may seem like an a 9% higher retention rate compared with workers who learn in less indulgence, but it is actually good interactive environments.1 for retention—and good for business One company that has discovered the power of play is Genentech. because engaged employees are more The biotechnology firm created a game called the New Manager productive. A study conducted by Roadmap Challenge to train new managers on company policies, the Corporate Executive Board found standards, and management resources. The game, which resembles that employees most committed a classic simulated road race, helps new managers prioritize and keep to their organizations put forth track of resources available to them. It appeals to the competitive nature 57% more effort and are 87% less of young workers by enabling players to view scores of their cohorts. likely to resign than employees who The game has helped Genentech ensure that content is immediately consider themselves disengaged.7 accessible and consolidated for new managers, and has lowered costs The opportunity to spark engagement and time associated with training. and productivity provides a strong case to demonstrate the importance of a more relaxed, less traditional work 1 Source: University of Colorado, Denver, Business School, “Business School professor’s study finds video games highly effective training tool”, October 20, 2010 environment and to facilitate funding Chief Learning Officer, “Excellence in Simulations and Games Winners”, 2010 that is built into the long-term business plan. Training and developmentWorkplace environment cohorts and managers in ways that Net Geners were nurtured by parents are natural to them. Over the long who were enthusiastically involved inTo optimize the potential of these their education, and as a result they term, a social business network willtech-centric workers, social expect similarly dynamic on-the-job also help improve the technology skillsnetworking and collaboration tools training and career development. of current workers and lead to betterthat work the way they do will be These young workers want learning collaboration, communication, andessential. This shift in technology will that is customizable, engaging, and, productivity across the enterprise.be rapid. By 2014, Gartner forecasts of course, digital. They expect tothat social networking will replace A Net Gen-friendly environment is keep on learning as they enter thee-mail as the primary communications fully digital, but it is also comfortable workplace and spend a high proportionhub for 20% of business workers.6 and creative. Net Generation workers of their time gaining new experiences do expect to work hard, but they don’t and absorbing new information. InNet Geners will expect a workplace want to sit in a beige cubicle all day. a recent PwC study, 35% said theytechnology ecosystem that includes They will be drawn to organizations were attracted to employers whosocial networking, instant messaging, that offer an engaging, comfortable, offer excellent training andvideo on demand, blogs, and wikis. and stimulating atmosphere that development programs for thisThese social tools will enable Net creatively blends life and work. reason and saw it as the top benefitGeners to instantly connect, engage, they wanted from an employer.8collaborate, and innovate with 6 Source: Gartner Research, Gartner Says Social-Networking Services to Replace E-Mail as the Primary Vehicle for Interpersonal Communications for 20 Percent of Business Users by 2014, November 2011 7 Source: Corporate Executive Board, “The Role of Employee Engagement in the Return to Growth”, Bloomberg Businessweek, August 2010 8 Source: PwC, Millennials at Work: Shaping the Workplace, December, 2011 PwC 5
  • 7. In general, Net Geners gravitate But that doesn’t mean traditional This cross-generational coachingtoward learning styles that are learning methods like classroom presents a double opportunity forautonomous and customizable. instruction are ineffective. Quite HR: It can satisfy younger workers’Despite a preference for independence the contrary: Net Geners respect expectations and, at the same time,and personalized learning, they want authority and experience, and will help preserve the organizationalstructured rules and procedures that respond enthusiastically to dynamic knowledge of seasoned workersclearly define what they must do to and engaging dialog. The best who may be nearing retirement.achieve career objectives. training programs will mix classroom Inevitably, the organization’s instruction with digital learning hierarchical barriers will erodeThey are accustomed to a world of modules, interactive video, and as diverse generations interact.information and entertainment at webinars. A flexible menu of trainingtheir fingertips, delivered instantly approaches enables young employees For all their expertise in technologyby an array of technology devices. to customize their work and career and collaboration, many HR leadersAccordingly, they respond well to a development programs. Digital have found that Net Geners oftenstimulating range of learning styles learning requires that training content require training in fundamentaland modes, such as PowerPoint and sessions be freely available on workplace behavior and culture.presentations, online-learning the corporate network, enabling These young workers, for instance,modules, webinars, video games, workers to complete training on a broadcast the minutiae of theirand one-on-one mentoring with flexible schedule and investigate personal lives on Facebook anda senior manager. career development as time and Twitter but may need to be told that motivation dictates. it is inappropriate to share salaryMore than previous generations, Net information or performance reviewGeners prefer to learn by doing rather Beyond training, traditional and results with co-workers. Similarly,than by being told what to do. They are otherwise, Net Geners know that they are accustomed to instantinnately collaborative and accustomed the knowledge of experienced senior responses when they chat with friendsto learning in teams. Similarly, they workers will be invaluable to their via instant messaging yet may notwill want to engage and interact with careers. Unlike previous generations, realize that older workers often do notinstructors; in other words, a one-sided they will not hesitate to ask for treat IMs with the same immediacy.lecture will not hold their attention. on-the-job mentoring.The best training programs will mix classroom instruction with digitallearning modules, interactive video, and webinars. A flexible menu oftraining approaches enables young employees to customize their workand career development programs.6 The power of the Net Generation
  • 8. All things considered, the lack of technicalImproving tech skills skills among older workers represents moreWhile much has been said about the opportunity than challenge. Encouragingimminent retirement of Baby Boomers, younger workers to share technology skillsthere is considerable uncertainty as to with more seasoned cohorts can flatten thehow swift and complete that exoduswill be. The enduring recession has hierarchical barriers of a multi-generationalslowed retirement as Boomers have workforce, promote enterprise-widebeen forced to raid their 401(k) collaboration, and help preserveaccounts and savings, while others arestaying on the job longer to qualify corporate wisdom of retiring workers.for a larger Social Security benefit orretain current health care coverage.These uncertainties require that HRprepare for the secession of seasonedemployees while simultaneously One of the most effective ways to A technology mentoring plan willensuring that they continue to develop sharpen the technology IQ of older be most effective when seasonedskills. In particular, older workers workers is an approach known as workers understand that tools suchoften lack competency in the use of reverse mentoring, which pairs young, as social networking and micro-collaborative and social networking tech-savvy employees with seasoned blogging can help them moretechnologies. It’s not that they are workers. Reverse mentoring enables efficiently and flexibly collaboratereluctant to augment their technology mature employees to learn digital- and communicate at work—and atskills; they simply need a supportive social technology in a structured, home. An informal seminar on howenvironment in which to learn. non-threatening environment. They to use digital cameras and upload can, for instance, ask specific questions snapshots to photo-sharing sites, for about how Facebook status updates instance, will teach mature workers work in one-on-one sessions with valuable skills about social networking35% younger employees. The bonus for sites that can be used at work and HR: Reverse mentoring will flatten also enrich their personal lives. organizational barriers and preserve corporate knowledge as Net Geners All things considered, the lack ofof Net Geners said they interact with established workers. technical skills among older workerswere attracted to employers represents more opportunity thanwho offer excellent training challenge. Encouraging youngerand development programs and workers to share technology skillssaw it as the top benefit they with more seasoned cohorts can flatten the hierarchical barriers of awanted from an employer. multi-generational workforce, promote enterprise-wide collaboration, and help preserve corporate wisdom of retiring workers. PwC 7
  • 9. Leading thecharge for change Attracting and retaining the next The cultural and technical changes generation of workers is critical to the inherent in preparing the workplace future of your business. Net Generation for the workers of tomorrow creates a workers’ career aspirations, attitudes complex challenge that begins in HR about work, and knowledge of new and ultimately spans the enterprise. Its technologies will define the culture scope will require a careful assessment of the 21st century workplace. of existing policies and technologies, a strategy for enterprise-wide change, HR has an opportunity to lead and the expertise to avoid implosion workplace change by building upon implementation. awareness of this shift and developingThe cultural and a strategy that leverages new This magnitude of change will not betechnical changes technologies to engage new— easy, nor will it be achieved overnight.inherent in preparing and existing—workers in ways But it must begin now. Already, that drive growth and innovation.the workplace for the Digital-social technology is key because Net Geners represent one-quarterworkers of tomorrow it will provide a platform for effective of the US workforce, and their communications, collaboration, and numbers are expanding.creates a complex innovation for all workers. It willchallenge that begins also enable the organization to better The right strategy, planning, and execution will enable your companyin HR and ultimately understand and meet the needs of to not only meet the needs of these customers, many of whom already usespans the enterprise. social technology in their daily lives. digitally-connected workers, but also unlock the innovation and productivity of existing employees and confidently enter the next generation of business.8 The power of the Net Generation
  • 10. www.pwc.com/us/peopleandchangeTo have a deeper conversation about the Net Generationand what your organization do to attract and retain thisnext generation of works, please contact:Ed Boswell Sayed Sadjady(617) 530-7504 (646) 471-0774edwin.h.boswell@us.pwc.com sayed.r.sadjady@us.pwc.comDiane Youden Jean Lee(214) 754-5150 (408) 206-7006diane.youden@us.pwc.com jean.e.lee@us.pwc.comScott Olsen Justin Angsuwat(646) 471-0651 (917) 225-3511scott.n.olsen@us.pwc.com justin.angsuwat@us.pwc.comFor this and more People andChange publications scan thecode belowTo download a tag reader, go to http://getscanlife.com© 2011 PwC. All rights reserved. “PwC” and “PwC US” refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm ofPricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, andshould not be used as a substitute for consultation with professional advisors. PH-12-0103

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