Human capital risk management has gained traction as companies look to evaluate and measure what is arguably their greatest resource: employees and the skills and knowledge they bring.
In our information-based age, where physical capabilities have been replaced with knowledge competencies, understanding how different employees think and what factors affect their productivity and comfort level in an organization is vital to being able to retain and engage the right people.
To successfully analyze risk as it relates to your employee population, you have to understand that your workforce is not homogenous. Today’s workforce is generationally diverse. Traditionalists, baby boomers, gen X and gen Y all have different values, behaviours and expectations.
These differences mean that each generational cohort brings varying risk factors to the workplace, relative to what each expects from organizations and their leaders. All four generations want a workplace in which their contributions are valued and where they have a positive, healthy relationship with managers and colleagues. However, the way in which employees expect managers and colleagues to create that positive relationship differs.
For example, the four generations define the concept of “respect for authority” differently. Traditionalists are comfortable in a hierarchical environment. They accord respect to any person who has a more senior title or tenure to them. Baby boomers are similar, recognizing that, until they climb the corporate ladder, all senior managers are to be respected, regardless of their personal assessment of a manager’s competency. But gen X and gen Y define respect for authority completely differently, primarily reserving their respect for managers and colleagues who demonstrate competency and skills. Gen Y further defines competency to mean not only functional skills but also leadership and interpersonal abilities.
These differences point to the need to address psychosocial factors—which affect the level of comfort that employees across different generations will have within your organization—in your company’s wellness and HR initiatives.
While it is possible to quantify the return on investment of programs that encourage physical wellness such as fitness subsidies and cafeterias with healthy food choices—since success of these programs leads to decreased group insurance costs—HR leaders need to be able to translate the business case for targeted psychosocial initiatives into human capital risk terms. The stronger your organization is in promoting this type of wellness, the greater your organization’s chances are of recruiting, retaining and engaging your workforce.
For example, older, experienced managers who act in a traditional authoritative fashion where information is given on a need-to-know basis—and where the management style is more directive than collaborative—risk frustrating and disengaging younger employees and colleagues. Conversely, if younger managers do not demonstrate respect for the years of service and experience of older employees and colleagues, they will negatively impact those relationships.
Employee disengagement and stress resulting from mismatched manager-direct report relationships can lead to unproductive working environments that put at risk an organization’s ability to deliver on its goals. To create positive relationships, leaders have to recognize that they need to employ generational situational leadership to effectively communicate, clearly assign duties and responsibilities, and encourage team collaboration within a multi-generational workforce.
HR managers should facilitate this by understanding generational differences in their organization through tools such as engagement surveys, focus groups and exit interviews. With this information in hand, they can then identify key human capital risks around recruitment and retention, and develop opportunities for people managers to manage across their generations more effectively.
Adwoa K. Buahene is co-founder of n-gen People Performance Inc., with Giselle Kovary. abuahene@ngenperformance.com