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Running head: GENERATION Y

Topic: Generation Y: A New Challenge in Managing the Human Resources Name: Mohamad Nazreen bin Dol Bahar

Course: Human Resource Management Date of submission: 20th March 2011



Generation Y has been flooding the workplace and well known for their different characteristics than the previous generation. This is a research paper to focus on characteristics of Generation Y and the challenges in managing them. This research specifically targets Generation Y that has been in the workforce for a few years. For a purpose of study, most of the data and statistics collected are based from the United States of America, because most of the surveys were done in that country. However, the outcome should be similar and this could be considered as a starting tool for further study for future generation.


Generation Y: A New Challenge in Managing the Human Resources

Have you ever experienced dealing with Generation Y in any scenario? Do you think Generation Y is easy to handle? How about tackling Generation Y in a workplace? Who is this Generation Y? Is it so crucial to get to know them? Those are some of the questions we may have heard in newspapers or articles. Some of us do not even care to know who this Generation Y is. Not to mention those people who have never come across this term Generation Y. So, what is Generation Y? Generation Y is a group of people born between 1980 onwards. Another easy interpretation is Generation Y has grown up with advanced mobile communications as well as internet. They are born to be digitally, globally and constantly connected. According to Puybaraud (2010), Generation Y is defined as a generation aged between eighteen and twenty-five who is technology savvy and motivated. They bring with them to workplace a load of cultural diversity, habits and behaviours inhibited the way they act, work, communicate, exchange and relate to their environment, people and their management. If we try to imagine a group of energetic guests come to a house party which already has guests there, and those energetic guests come with outsize luggage in the form of multiple digital technologies, their social network, their technology savvy culture, new ways of contemplating work and new managerial forms, what do you think the people in the house feel? If I were them, I will feel awkward about it. Nowadays, Generation Y is recognized as invaders in a workplace and managed to grab attention many employers as well as commentators who claim that these young people are setting of a new wave of social and business transformation. The advent of these newcomers into the workplace is said to bring new changes that


need to be addressed. More shockingly, this generation is considered as the most digitally sophisticated generation we have ever seen. This is because their characteristics are very different than the previous generation, those who are born earlier than 1980. This generation, if we could understand them, it would bring us a lot of advantages for a good of mankind, not only to a country, but also to any employer, specifically. So, what are the reasons we need to understand Generation Y? Referring to Puybaraud (2010), Generation Y is an extraordinary generation and there are at least six reasons why we need to understand them and how they relate to work. The reasons are the following: 1. The demographic data indicate that there are not enough of them coming in to the workforce 2. They are transformational, who have grown in a different world to their parents and surrounded by modern technologies and a society of consumerism. 3. They do things differently because modern educational curricula have brought a wave of transformation in their life. 4. They are challenging this is the most commonly agreed threat about this generation, but yet is has not been proved. 5. They are technology savvy the 20th and 21st centuries have brought and will continue to bring the most terrifying and transformational technological solutions to our world. 6. They are agile and multi-taskers their agility to perform different things at the same time is well known, but it does not mean it makes them more efficient in the way they work. (Puybaraud, 2010)


The above mentioned reasons have brought up more questions for further discussion: Will their existence modify the current working environment? What would this generation expect from their employer, their work in their workplace and their way of working? In other words, to compress into simpler question, what are the challenges in managing this Generation Y at the workplace? This is precisely what a discussion would be found in this paper.

Retaining Generation Y Workforce

Nowadays, we have seen many young employees, started to fill the opening posts not only in small or medium companies but also big companies. As many of them started to flood the opening posts, it can be noticed that many of them also easily leave the companies. According to Sodexo Motivation Solutions (2010), one of the worlds largest motivation solutions providers, a result from a survey highlighting Generation Y, shows that 56% out of 401 respondents between 16 and 28 years old are looking to leave their jobs within a year. This is quite surprising because this is more than half of them. This will be a challenge for any company to survive because most of the new employees in many companies are categorised as Generation Y. Typically, new employees will be provided training as a preparation to perform their jobs, either on the job training or off the job training. This of course will incur cost to the organisation. Hence, providing this training just to observe these employees leaving the company a year after, is not what any company expects. As a result, the management in many companies were struggling with how to attract and retain members of this Generation Y.


The question we need to ask, why do these young generation want to leave their companies? What are they looking for in their career? There must be at least one reason, why they do not intend to stay in a company for more than a year. Lack of motivation is one common thing that can be associated with this scenario. According to Sodexo Motivation Solutions (2010), one way that seems to motivate this generation the most is to apply a healthy work-life balance. Unlike previous generations who put a high priority on career, todays younger employees are more interested in self-fulfilment and expect their employers are able to accommodate their family and personal lives. They want jobs with more flexibility, telecommuting options and the ability to go part time or leave the workforce temporarily when children are sick, for instance. As spending time with family or even friends is important to younger workers, companies may have to consider benefits such as flexible work schedules and longer holidays to attract and retain the services of these high-calibre staffs. Apart from that, most of these people will expect to enjoy their work. They do not intend to encounter any stress in their job. Therefore, an organisation needs to encourage passions in this Generation Y, which require a study or research on what are the factors to increase their passions into job. If passion is well cultivated and integrated in their work life, they will of course love their jobs, and this is what all companies should practice in the work place. It is not impossible that if all those are well applied, these Generation Y professionals will be hired for life. Nevertheless, work-life balance is not the only factor for Generation Y to stay with their current organisations. As stated in a study by Fidelity Investments (Employee Benefit News, 2010), more than 70% of Generation Y are very concerned about their finances and have set the goal of daily money management and


budgeting. Many of young workers surveyed say that the economy recession has caused their generation to be more conservative about their career and financial goals, which results in their spending decisions and employment choices. This obviously proves that many Generation Y staffs will put high priority on how much salary they get. The more cash reward with respect to their job, the more probability for them to stay with their current companies. If they are not happy with the salary they get, of course they will find a way to jump to a company that offers a better pay. In order to ensure these workers are satisfied with their salary, one effective method can be applied is to ensure that they are paid well above market value. Therefore, it is a challenge for human resource department to perform a survey on the market value of the salary for related industry. This is very essential as this generation knows what theyre worth. Theyve spent years in college, years gaining experience and done their research about others compensation before even interviewing for a job. So, how to retain them? The only answer is to be transparent about their pay and benefits and encourage discussion with these young professionals. If necessary, let them know how their pay or benefits can change once theyve been with your organization for a period of time. As mentioned earlier, on top of salary, benefits have to be taken into account as well. Approximately 62% of respondents from Fidelity Investment survey say that the quality of a benefit package influences their choice of employer and about 64% say that benefits affect their job loyalty. On top of that, about four out of 10 (44%) believe that the value of the benefits they receive should be tied to their performance (Employee Benefit News, 2010). When asked about must-have benefits, Gen Y-ers ranked health insurance first (82%), followed by paid vacation (68%) and access to a retirement plan (57%). About 18% now consider saving for retirement their most


important goal, up from 13% in 2008. The majority (57%) believe that employersponsored retirement plans are the best way to save for retirement (Employee Benefit News, 2010). All the facts above illustrate that not only direct financial compensation is crucially important, but also indirect financial rewards. This also indicates that many Generation Y employees have become engaged with their finances through this economic downturn and are now recognizing how critical it is to save early for retirement.

Career Development Expectations

As mentioned previously, more than 50% of Generation Y staffs do not intend to stay more than a year in their current company. Another interesting survey discovered that most Generation Y employees do not plan to work in the same position for too long. It shows that less than half of the respondents are willing to work in the same position for over two years. Apparently, as can be observed in Figure 1,