The Shift: The Future of Work is Already Here. Lynda Gratton
65, making up between 5% and 10% of the workforce. Between 2010 and 2025 the majority of this generation will have left the workforce. However, we can expect some part of their legacy to live on in organisational life since this generation were the initial architects of many organisational practices and processes which subsequently survived for decades.
In many ways, the coming decades will be defined by the actions of the largest demographic group the world has ever seen – the Baby Boomers. This period saw around 77 million babies born in the USA, while the birth rates of many European countries reached as high as 20 per thousand, nearly five times the rate in 2010. In 2010 they were in their 50s and 60s and by 2025 most will have left the workforce, taking with them a huge store of tactical knowledge and knowhow; and also, if some commentators are to be believed, much of the wealth of the next generations. More importantly, as this huge bulge leaves the workforce, the post-1960s reduction in birth rates across the developed and much of the developing world will see significantly fewer people taking their place. This has huge implications for the retention of knowledge in companies and the challenge of severe skill shortages.
The following generation – Generation X – is the generation that in 2010 are in their mid-40s and will be in their mid-60s by 2025 – so in 2010 they were entering the height of their earning power, beginning to see their children growing up. This is a generation that grew up in a time of economic uncertainty, the Vietnam War, the fall of the Berlin Wall, the 1973 oil crisis, the dotcom bubble, the Iran hostage crisis, all of which reduced their expectation of a long-term relationship between employee and employer.6 They also increasingly witnessed their parents divorcing. In 1950, 26% of US marriages ended in divorce; by 1980 this had climbed to 48%.7 They were there when computers came into the home, when video games began to be played and the nascent internet began to connect them.8 While the Baby Boomers believed the world to be a place of future positive growth, this was not the case for Gen X. In real terms, Gen X US men in 2004 made 12% less than their fathers at the same age in 1974.9 This was on top of significant personal investments in education, joining a workforce behind a generation of Baby Boomers, and competing in a weak global economy.
By 2025 the Gen Y’ers (born around 1980 to 1995) will be aged between 30 and 45 and at a crucial stage of their working lives. This was the first generation to have grown up alongside the bulky embryonic forms of personal computers, the internet, social media and digital technologies. Many Gen Y’ers closely followed the rapid technological evolution of their time and now have an intimate knowledge of, and perhaps even admiration for, the devices and platforms they use. Their social habits and behaviours shifted as they increasingly used text, email, Face-book and Twitter to communicate. They talked to their friends online, and played with strangers in MMORPGs like World of Warcraft and Second Life.
Gen Z by 2005 had reached their first decade, and by 2025 will be around 35. From 2020 onwards they will be taking an increasing role in the business life of companies across the world. Called by some the Re-Generations and by others the Internet Generation, this group is often defined by their connectivity.10 Although we cannot be sure how they will develop as a generational cohort, we know something of their early experiences. Generation Z will be the first generation to grow up surrounded by the trends we have discussed, and the challenges and opportunities that we have talked about will weigh heavily on their minds, helping to form who they are and what they do.
At the same time, with regard to birth rates, there are complex demographic patterns emerging across the world. The developed world is ageing fast and hardly reproducing itself. That’s why by 2050 one in three people across the developed world will be drawing a pension. This has huge implications in many respects, particularly where a country decides to spend its money. In the USA, for example, the Congressional Budget Office predicts that spending on entitlements will grow from 10% of GDP in 2010 to 16% in 2035.
The soon-to-be-retiring Baby Boomers are primarily a phenomena of post-World War birth rates. Since that time, birth rates in much of the developed world have been in decline, caused by a combination of increasing female education, personal choice and enhanced child medical provision. In China the ‘one child per family’ government regulation introduced in 1979 has drastically curtailed the growth of the population, from an average of 5.8 children per family to 1.7. However, lowering birth rates is not a worldwide phenomenon, and we can expect to see birth rates remaining high in many of the developing regions of the world such as sub-Saharan Africa and rural India. Clearly difference in birth rates will impact on the availability of labour and skills and also on the labour migration routes we can expect to see forming over the coming decades.
In Europe the working population is rapidly ageing due to low birth rates, longer life expectancies and in many countries low immigration. By 2050 it is estimated that the median age of Europeans will rise to 52.3 years from 37.7.11 In some European countries this challenge is particularly pressing. In Italy, for example, 25% of Italian women are childless with another 25% having only one child.12 Estimates indicate that Italy will either need to raise its retirement age to 77 or admit 2.2 million immigrants annually to maintain its current worker-to-retiree ratio.13
However, of all the forces, demography and longevity are the most situationally and contextually based, with contradictory aspects across the world. For example, birth rates are indeed falling in Italy – but they are soaring in Ethiopia. People are certainly living longer in Sweden – but across the border in the Soviet Union life expectancy has dropped. With regard to the demographic groups, it is clear for example that Gen Ys in Boston want meaningful work and the opportunity to develop – yet in Shanghai the most talented Gen Ys are leaving one company to join another for an extra $1,000 a year. As a consequence of these contextual differences, the overriding proviso for the demographic force is ‘Well, it depends’, and so as you patch together the future of your work and that of others you need to keep this uppermost in your thinking.
Having said that, there are some basic rules of thumb that can be applied when understanding and predicting demographic and longevity trends.14 With regard to the attributes of the generation, the greater the wealth and job security of Gen Y, the more similar their views are to the stereotype of Gen Y. That’s why, for example, educated and professional Gen Y’ers in Mumbai are rather similar in their aspirations and goals to educated Gen Y’ers in Silicon Valley, but very unlike Gen Y’ers who are living in Mumbai’s slums.15 Here are the four specific pieces about demography that have been patched into the future storylines.
1. The ascendance of Gen Y: by 2025 this group will begin to make their needs and hopes felt in the workplace. We can expect that their aspirations for a work/life balance and for interesting work could well profoundly impact on the design of work and the development of organisations and working conditions.
2. Increasing longevity: perhaps one of the most important aspects of the coming decades is the extraordinary increase in productive life – which will allow millions of people over the age of 60 who want to continue to make a contribution to the workplace.
3. Some Baby Boomers grow old poor: longevity will enable millions of people across the world to continue to make a contribution to the workplace. The challenge will be creating work for them, and we can expect a significant proportion of them to join the ranks of the global poor.
4. Global migration increases: over the coming decades migration will increase both to the cities and across countries as people move to gain education or better-paid work. We can also expect to see an increase in the migration of carers and supporters from the emerging to the developed countries.
Demographic and longevity forces will influence our work