Meeting the Challenges of Age Diversity in the Workplace

By Nancy Sutton Bell and Marvin Narz

E-mail Story
Print Story
FEBRUARY 2007 - The modern CPA firm has four generations working side by side: Traditionalists, Baby Boomers, Generation X, and Generation Y. Because of demographic realities, managers must both develop new programs to attract younger workers and entice older productive workers to delay retirement. Many employers are finding that flexible work arrangements are effective in meeting both these challenges.

Generational Attitudes Toward Work

A generation is defined by demographics and key life-events that shape, at least to some degree, distinctive generational characteristics. Although sources disagree on the exact birthdates that define each generation, there is a consensus that employees over 60 in 2006 belong to the Traditionalist generation. Those in their mid-40s to 60 are Baby Boomers. Employees in their late 20s to early 40s are Generation X. The new generation entering the workplace, in their early 20s or younger, is generally called Generation Y.

Cultural generational changes create trends that can be noticed over time. Looking at the background and characteristics of each generation can be useful in understanding the distinctive talents and challenges each individual brings to the workplace, as well as identifying long-range trends that are changing the culture of the workplace. There appear to be distinctive trends toward dual-career families and an interest in having flexible work arrangements that help employees achieve balance between their work and family life.

Traditionalists may be credited with the typical work environment, where individuals work in the office from 8:00 a.m. to 5:00 p.m., along with frequent evening and weekend work and extended work hours during tax season. Traditionalists are frugal, hard-working conformists who respect authority and put duty before pleasure. They spent most of their careers with one or two employers. Nonworking wives typically tended to family matters to support the long hours husbands spent at the office. Although they are steadily retiring from the workforce, Traditionalists remain connected and influential.

Having been raised by Traditionalist parents, Baby Boomers entered the workplace with a strong work ethic, but also as dual-career couples, with highly educated women working alongside men. Baby Boomers value personal growth, hard work, individuality, and equality of the sexes. They question authority and have led a trend toward less-hierarchical work structures. They have had smaller families and enjoyed affluent lifestyles that led to their being labeled the “Me Generation.” With this comes a trend away from long-term relationships, both personal (through divorce and second marriages) and professional (through multiple employers, downsizing, reengineering, and second careers). Boomers are 30% of the population, but represent the heart of today’s management. They are leading a trend toward delayed retirement, with nearly 80% wanting to work at least part-time during retirement (AARP, Baby Boomers Envision Retirement II, 2004).

As children of the Baby Boomers, Generation Xers saw the toll that having both parents trying to “have it all” took on the family, and they are working to change it. They are a relatively small generation, sometimes called the “baby bust.” They are self-reliant, optimistic, and confident. They value education, independence, and parenting above work. Consequently, they do not have a strong loyalty to an employer, and they have developed a repertoire of skills and experiences that they take to the employer that best meets their needs. They seek balance in their lives as they raise their families. As Exhibit 1, summarizing a survey by the Families and Work Institute, demonstrates, Generation X employees tend to be more family oriented than Baby Boomers. The majority of those surveyed put family first (52%); more than a third are dual-focused between work and family (35%); and only 13% put work first.

The newest employees entering the workplace are members of Generation Y, also called the millennials, the Internet generation, and Echo Boomers, because they are the relatively largest generation since the Baby Boomers. They were exposed to diverse lifestyles and cultures in school at an early age, and tend to respect different races, ethnic groups, and sexual orientations. They are exceptionally comfortable with diversity, one-third are members of a minority group, and they are accustomed to computer technology, immediacy, and multitasking. They have short attention spans, but value professional development and strive to work faster and better. They want creative challenges and projects with deadlines so they can build up ownership of their tasks. They want jobs with flexibility, telecommuting options, and the ability to work part-time or to leave the workforce temporarily when having children. As Generation Y enters the workforce, employers will need to adjust to their demands.

Cultural Trends

Several cultural trends can be inferred from these generational characteristics. Since the Baby Boomers entered the workplace, dual-career families have become the norm. The Boomers developed less- hierarchical work structures, and each successive generation has further questioned traditional work structures. Technology and long work-hours by parents in dual-career homes have increased interest in programs that help achieve greater work-life balance. Increased life expectancy has expanded work-life balance issues beyond raising children to include caring for elder relatives and enabling older workers to continue in the workforce. With technology making it possible to do many jobs anytime and anyplace, younger workers are questioning how necessary the traditional work structures are.

The demographic reality is that Boomers are a group relatively larger than Generation X, and as they leave the workforce through retirement or death, there will be a decreasing number of workers in the labor force. The trend toward longer work-lives may moderate the effects of Baby Boomers leaving the workplace, but older workers will have special needs that will require a more flexible work environment.

Finally, all of the generations discussed share a strong work ethic, as evidenced by the increasing number of hours Americans work. As illustrated in Exhibit 2, the number of hours that the average American worked increased from over 43 hours per week in 1977 to over 47 hours per week in 1997. The increase was greatest for women; while the average male worked almost three hours longer each week, the average female worked five hours longer. Longer working hours make a work-life balance more difficult.

Evidence suggests that juggling the demands of work with a personal life has become a major issue for American workers. An AICPA survey found that 87% of women and 78% of men expressed concern about work-life balance. For employees with young children, 91% of women and 83% of men expressed great concern. The survey also found that the main reasons CPAs leave public accounting were working conditions, including schedule, hours, and assignments (81% of respondents), and work-life balance (68%) (N. Baldiga, “Opportunity and Balance: Is Your Organization Ready to Provide Both?” Journal of Accountancy, May 2005).

Another survey, of more than 1700 employees by Business Credit magazine, found that 18% agreed with the statement “In the New Year, I plan to look for another job to improve my work-life balance” (“One in Five Employees Plans to Quit in 2006 to Pursue a More Balanced Life,” Business Credit, April 2006). These demographics and trends will increasingly force companies to develop more-flexible work programs.

Advantages of Flexible Work Arrangements

Flexible work arrangements offer many advantages in helping companies gain a competitive advantage in attracting and retaining valued highly educated employees. Flexible work arrangements include any arrangement that varies from the traditional schedule of 8:00 a.m. to 5:00 p.m., Monday through Friday, in an office setting. These arrangements frequently include flexibility in the hours that employees work, the places where they work, their access to technology, their professional development opportunities, and mentors to help employees adjust to new ways of working.

Flextime allows flexibility in when employees arrive at and leave work. There is frequently some core time each day when all employees must be present, with employees given flexibility in structuring the rest of their work time. Telecommuting allows employees to work at home or another site on a regular basis. The Internet, fax machines, e-mail, and cellphones have made it possible to communicate and access data without being physically present in the office.

Flexible work arrangements also include compressed workweeks; regular part-time work, coupled with extended hours during tax season; job sharing; concierge services to help with personal tasks; extended leaves; and sabbaticals. Flexible work alternatives may be particularly appropriate in the accounting environment, where work tends to be deadline oriented, requires individuals with special technical skills and training who are difficult to replace, has historically had a high turnover rate, and is facing a labor shortage with the retirement of Baby Boomers.

Although younger workers are more likely to expect flexible work arrangements, such programs have cross-generational appeal, helping each employee make the best use of work time and personal time. Two surveys by the American Association of Retired Persons (AARP) provide evidence that flexible work arrangements are attractive to older workers. The large 2004 survey of Baby Boomers (Baby Boomers Envision Retirement II) found that nearly 80% want to work at least part-time during retirement. According to a 2005 survey of workers 50 and older (S.K. Brown, Attitudes of Individuals 50 and Older Toward Phased Retirement), although only 19% had heard of the term “phased retirement” prior to taking the survey, 38% said they would be interested in participating in phased retirement. Of those interested, 78% reported that the availability of such a plan would encourage them to work past their expected retirement age. Additionally, 40% of retirees reported that they would have been interested in phased retirement if it had been offered to them, and 33% indicated that the availability of such a plan would have prompted them to remain in the workforce longer. Although they appeal to each generation for different reasons, flexible work arrangements can help employers attract the scarcer pool of younger workers while also encouraging older workers to continue to work through phased retirement.

Although studies are limited, existing research consistently finds that alternative work arrangements improve retention and job satisfaction. A study comparing public accountants working under traditional arrangements to a similar group working under alternative work arrangements found that those with alternative work arrangements reported significantly higher job satisfaction and intentions to stay and lower levels of burnout and stress than those with traditional work arrangements (E.D. Almer and S.E. Kaplan, “Myths and Realities of Flexible Work Arrangements,” The CPA Journal, April 2000). Over 80% of the CPAs with flexible work arrangements reported that they would have left the firm if their flexible work arrangement had not been approved. At one law firm, attrition among employees declined from 21.5% to 17% in the first year of enabling nearly 600 employees to work a flexible schedule (C. Huff, “With Flextime, Less Can Be More,” Workforce Management, 2005). Ernst & Young, also cited in this study, identified a slight retention increase since instituting flexible schedules, with 76% of women remaining with the company four years after they were hired, compared with 72% in the mid-1990s.

Probably the greatest advantage for a CPA firm is that flexible work arrangements increase the firm’s flexibility. Telecommuting can greatly expand a company’s labor pool to include employees from other geographical areas and those required to work from home because of a disability or child-care or elder-care responsibilities. Having a mix of part-time and full-time employees can improve a company’s ability to manage the seasonal demands of public accounting. Flextime, with a mixture of employees who come in early or stay late, can expand the hours the company is available to clients. Both telecommuting and flextime decrease the cost of office space, because fewer employees are in the office during the same time. Finally, all flexible work arrangements help an employer maximize its most valuable resource, its employees, by capitalizing on each individual’s strengths.

Developing Flexible Work Arrangements

Flexible work programs are most successful when based on a culture that is supportive of individuals’ being successful in their personal and professional lives. It is important to build a culture that clarifies business priorities and employee responsibilities, rewards employees for productivity instead of hours worked, encourages employee input, develops family-oriented practices, experiments with new business models, and provides employees with the tools they need. Deloitte’s Personal Pursuits program and Sun Microsystems’ iWork program are two creative examples of profitable programs.

To reduce turnover, Deloitte recently instituted Personal Pursuits, a program that allows employees who leave the workforce to stay connected through a mentor and training opportunities for up to five years (M. Browne, “Flextime to the Nth Degree,” Journal of Accountancy, September 2005). Deloitte estimates the cost of replacing an employee is at least two times annual salary. The Personal Pursuits program costs about $2,500 per employee per year, which they consider a good investment when compared to an estimated $150,000 for replacing a valued employee. The program also includes networking events, short-term work assignments, career coaches, and resources to maintain professional licenses and memberships in professional associations.

In 1994, Sun Microsystems developed a program that institutionalized the virtual office and flextime, called iWork (S. Greengard, “Sun’s Shining Example,” Workforce Management, March 2005). In 2005, 80% of their 20,000 employees connected to the company remotely. Sun estimates that reduced turnover, improved employee satisfaction, and more-efficient use of office space saved the company $255 million between 2001 and 2005. The program allows employees to work from home or from flexible offices at 12 drop-in centers and 115 other locations. A smart card, called a Sun Ray, allows employees to log on and view files and applications on a customized desktop anytime and anywhere. Sun plans to expand the use of collaboration tools that will make it easier for employees to share files and work in virtual teams. Their employees avoid expensive and time-consuming commutes while working around their personal and family schedules.

Because these programs are relatively new, developing effective models entails a steep learning curve. Several organizations offer help for employers by providing studies, examples, and advice from their websites, including the AICPA (www.aicpa.org), the AARP (www.aarp.org), and the Families and Work Institute (www.familiesandwork.org). Developing more-flexible work arrangements should help companies attract younger workers while enticing and enabling older workers to delay retirement. These programs should give CPA firms a critical, competitive tool in attracting and retaining valuable employees. Employees, whatever their generation, appreciate an employer that provides accommodations to help them achieve greater success in their personal and professional lives.


Nancy Sutton Bell, PhD, CLU, is a professor of management and Marvin Narz, CPA, JD, LLM, is an associate professor of accounting and business law, both at the Stephens College of Business at the University of Montevallo, Montevallo, Ala.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

©2009 The New York State Society of CPAs. Legal Notices