What do HR leaders need to know about developing the next generation of leaders? On a macro level, HR leaders need to understand two critical trends in the global workforce: the great generational shift and the rising global youth tide (the second wave Millennials). On a micro level, HR leaders need to focus on three key strategies: 1) staffing and succession planning at every level; 2) high-potential identification, retention and development; and 3) training and support for newly promoted leaders.
The Great Generational Shift in the Global Workforce
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 shift in the numbers, but also a critical turning point in the norms and values of the workforce.
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, 10,000 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 make up 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.
At the same time, the fastest growing segment of the workforce is made up of those born in 1990 or 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.
The Rising Global Youth-Tide (the Second-Wave Millennials)
By 2020, second-wave Millennials (those born 1990-2000) will make up as much as 24% of the Western workforce, and another 4% to 5% will be made up of post-Millennials born after the year 2000. This rising youth bubble is much, much larger in Africa, Latin America and much of Asia. As of 2016, second-wave Millennials already represent more than 45% in India, Mexico, Brazil, Indonesia and Vietnam; in Nigeria—more than 60%.
By 2020, in these younger parts of the world, those born in 1990 and later will make up 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. The rising global youth tide will bring to the workplace radically different norms, values, attitudes, expectations and behavior.
The second-wave Millennials embody a culmination of the larger historical forces driving the transformation in the workplace and the workforce since the early 1990s:
- Constantly advancing technology
- The painfully slow death of the myth of job security
- The never-ending ever-expanding information fire hose
- The accelerating pace of everything
- Increasing human diversity in every dimension
- Virtual reality
At the same time, Millennials have been insulated, and scheduled, supported and accommodated to a degree that no children ever have been before. Younger workers think, learn and communicate differently than previous generations and also typically require more regular guidance, direction, support and coaching. Millennials are also the most likely to make specific requests regarding work conditions, including the assignment of tasks, resource planning, problem solving, training, scheduling, work location, work space, dispute resolution, guidance, coaching, recognition, promotions, raises, benefits and other rewards.
Organizations with significant "youth bubbles" will also face the retention challenge we call "the development investment paradox." The paradox is that employers must invest in developing their new young employees, but the more an employer invests, the more negotiating power the new young employee has in the increasingly short-term and transactional labor market.
With the employer's development investment in hand, the young employee becomes more valuable and can leverage the employer's development investment by selling it to another employer or by negotiating for increased rewards. This gives today's most valuable young employees more negotiating power in the employment relationship at an earlier stage in employment.
Staffing and Succession Planning at Every Level
As the youth tide rises, employers will have fewer long-term traditional employees. There will be many more people who flow in and out of organizations—in highly variable roles and arrangements. HR leaders must find ways to maintain core groups of key talent and develop critical longer-term stakeholders. But these core groups will very likely get smaller and smaller.
As the aging Baby Boomers exit the workforce, they will take with them a great deal of skill, knowledge, wisdom, institutional memory, relationships and the last vestiges of the old-fashioned work ethic. Organizations with significant "age bubbles" in their employee demographics will be facing these losses and cascading consequences as their aging workers leave the workforce. This will require dedicating substantial resources to support knowledge transfer and what we call "wisdom transfer," as well as flexible retention, succession planning and leadership development.
This means HR leaders must engage managers at every level in meaningful "three-dimensional" successional planning. This means cultivating bench-strength at every level, identifying high-potentials at every level and actively retaining those high-potentials so they may be developed for new leadership roles.
High-Potential Identification, Retention and Development
Who will stick around long enough to grow into your next generation of leaders? Don't look for those Millennials who are comfortable slapping people down. Don't look for those who love the power. Don't look for the biggest egos or the loudest, most confident voices. Don't be lured by charisma, passion, enthusiasm and energy. Very few people are endowed with that special brand of charisma, passion, infectious enthusiasm and contagious energy that inspires and motivates people. No organization can afford to wait for those rare natural leaders to come along and fill each supervisory role, especially if these individuals also need to have good technical skills and a proven commitment to their work and career.
Focus first and foremost on those with real technical talent, those who are really good at their jobs. That commitment to excellence is the first essential piece when it comes to identifying new prospects for leadership roles. But it is not enough. Look for those Millennials who gravitate to responsibility and service, those who spend the most time patiently teaching, those who want to lift people up and make them better.
Once you identify them, you need to concentrate on retaining and developing them. Whatever you are doing to be flexible and generous to retain your good employees, you need to be much more flexible and generous to keep your next generation of leaders. Ask yourself the following questions:
- What are you paying your good employees? Pay your great ones more.
- What kind of scheduling flexibility are you providing for your good employees? Give your great ones the best schedules and give them more control over when they work.
- How are your good employees assigned to work with vendors, customers, co-workers, subordinates and managers? Give your great employees first choice in relationship opportunities at work.
- How are tasks and responsibilities assigned to good employees? Give your great employees first choice, including any special projects or choice assignments.
- What training opportunities are being made available to good employees? Offer the best training resources to the best people first.
- How are good employees assigned to work locations or work spaces? What about travel? Give the best people the first choice of location, work space and travel.
When it comes to developing high-potential Millennials, remember this rule: The better they are, the more attention they want. The superstar Millennials want strong, highly engaged managers who know exactly who they are, help them succeed and keep close track of their success. HR leaders need to make concerted efforts to surround the young superstars with teaching-style managers, advisers, organizational supporters and maybe even mentors.
Training and Support for Newly Promoted Leaders
The next generation of leaders will be under ever-increasing pressure from senior executives to get more work and better work out of fewer employees while using fewer resources. Even while managers juggle their own tasks and responsibilities, managerial spans of control (the number of employees officially reporting to each manager) are still increasing and most managers also have a steadily growing burden of administrative duties. It seems to most managers that they have less time than ever to devote to people management, even as workers of all ages need more regular guidance, direction, support and coaching in this high-pressure workplace.
To be effective in today's environment, managers must be highly engaged and strong. Highly engaged means conducting ongoing structured communication to provide every worker with that needed guidance, support and coaching. Strong means finding ways to do more for workers when they really earn it. That means doing more for some workers and less for others, based on their performance. That means holding people strictly accountable on a daily basis: setting expectations clearly, providing candid feedback, correcting problems, rewarding good work and especially rewarding discretionary effort.
When you ask a young star to step up and make the transition to a leadership role—at any level—you owe it to this new leader and his or her team to make sure that the leader is fully prepared to take on additional responsibilities and authority. Teach new leaders how to do the people work and then support and guide them in this new role every step of the way:
- Explain that this new role carries with it real authority, not just a new business card. It is a huge responsibility that should not be accepted lightly.
- Spell out for the new leader exactly what his or her new leadership responsibilities look like. Explain that management entails more than completing some extra paperwork. Explain the "people work" in detail. Focus on the basics, like spelling out expectations for every employee who works for the new leader, following up regularly, tracking performance closely in writing and holding people accountable.
- When you formally deputize any new leader, no matter how small the project or how short the duration of the leadership role, announce the new leadership to the whole team, articulate the nature of this person's new authority and explain the standard operating procedures for management that you have asked the new leader to follow.
- Check in daily (or every other day) with the new leader. Ask about the management challenges he or she is probably facing. At first, you might want to sit in on the new leader's team meetings and one-on-ones with team members to build up the new leader. Do everything you can to reinforce his or her authority with the team and every individual on the team.
- Pay close attention every step of the way and evaluate the new leader in this new role. In your own regular one-on-ones with this new leader, focus on exactly how he or she is doing the work of managing. Ask probing questions about each employee your new leader is supposed to be managing. Make sure to take every opportunity you can to help the new leader refine and improve his or her management techniques.
- If you want your new leader to focus on something in particular with one or more employees, spell that out. If you want your managers to carry a specific message to employees, hammer away at that message. Write it down. Put it on cards for the new leader to hand out to employees. Talk it through. Role-play it.
 RainmakerThinking analysis of published data from the United States Census Bureau, the United States Bureau of Labor Statistics, the United States Central Intelligence Agency, and the United Nations
Originally published on SHRM Special Reports and Expert Views.