Wharton@Work

December 2023 | Management

Beyond Generational Differences: The New Workforce

Today’s workforce includes five generations — a first in modern history. The conventional wisdom around managing those workers requires a multi-pronged approach: “It’s vital to understand the characteristics of each generation so you can adapt your leadership style to utilize everyone’s talent,” says one expert. “Managers need to adjust their managing skills to meet the needs and behaviors of each generational group,” counsels another.

The onus is on business leaders to adapt and adjust, developing generation-specific benefits, career tracks, titles, stretch experiences, and more. And even though it’s a tall order, the concept has been widely embraced. But according to Wharton professor of multinational management Mauro Guillén, it’s not just wrong, it’s “ridiculous. There's absolutely no excuse for saying you are born a millennial [or Gen Xer or GenZer] and then you're different than anybody else for the rest of your life. Generations, which are a particularly American obsession, are completely arbitrary.”

Guillén says there was a time when such distinctions made sense — but that was over 70 years ago at the end of World War II, when the so-called “Greatest Generation” was compared to Baby Boomers. “The contrast was very stark because one generation had gone through the Great Depression and experienced at least one World War, and the other generation was born into relative affluence and peace,” he says.

It’s Age, Not Generation, That Matters

That’s not to dismiss the fact that younger workers may have different expectations of their employers or communicate differently than their older counterparts. But Guillén says these differences are more a product of age and shouldn’t be confused with the stereotypical descriptions that purport to align millions of people born from 1965–79 (Generation X) or 1980–94 (Millennials), for example. “We have been looking for differences between generations,” he explains, “when the differences within generations are so much bigger. There's absolutely no excuse for saying, ‘millennials are supposed to be this way and Gen Z that way.’ It's an overgeneralization. Millennials born in Kansas City are very different from millennials born in Brooklyn, and many older Gen Xers have acquired attitudes and behaviors associated with Baby Boomers.”

By avoiding the lens of generational stereotypes, managers can more directly address real differences and conflicts between team members. “Age groups have different experiences and face different prospects about their future, including their careers,” says Guillén. “But that's different from saying that because you were born in a particular decade, then you're going to be different from everybody else born in a different decade for the rest of your life. That's a generational effect.”

But even the age lens can create issues, as with the “kids these days effect,” which has been around for millennia. The effect describes older people’s penchant for criticizing today’s younger people as worse than they were at the same age. One example comes from Aristotle, writing in the 4th century BC: “[Young people] are high-minded because they have not yet been humbled by life. … They think they know everything, and are always quite sure about it.” The “kids these days effect” can cause managers to discount the contributions of younger workers or even avoid hiring them in the first place — both dangerous reactions in a tight labor market with the largest segment of the workforce reaching retirement age.

Managing Beyond Stereotypes

In his new book, The Perennials: The Megatrends Creating a Postgenerational Society (St. Martin’s Press, 2023), Guillén writes, “A compartmentalization of our life by age is ridiculous because a lot of people don't make prescribed transitions [play/go to school/work/retire] at the prescribed time, and they fall behind,” he says. “Plus, the new economy doesn't like that age-determined progression because it requires us to have far more flexibility, changing jobs and careers multiple times and updating our knowledge more frequently because of developments like AI and other technologies.”

“Instead of endlessly debating generational differences and stereotypes in the workplace,” Guillén continues, “companies should embrace the concept of Perennials, a term coined in 2016 by Gina Pell, a serial entrepreneur. Perennials make connections across generations and are not defined by their own. They don't think or act their age.”

Some companies are moving away from the debate and starting to change as they realize what research reveals: intergenerational teams at work have greater productivity and are more creative than their homogenous counterparts. With fewer young people to take the place of older workers, coupled with the fact that we are living longer in sound mental and physical health, organizations are realizing that they cannot waste talent. “Getting rid of someone when they turn 60 no longer makes sense,” says Guillén.

In Perennials, he cites success stories including BMW, which is reorganizing itself to enable people of different ages to work better together. “In Silicon Valley, it's the norm for 40- somethings to manage 60-somethings. But even where that traditional hierarchy isn’t changing, reverse mentoring is happening. Younger and older people have different sets of knowledge and experience that the other can benefit from. When people from different age groups work together, they better understand each other. And as a result of that, I think we have a better chance of minimizing conflict.”

Guillén says the economy clearly doesn't like generational compartmentalization and a rigid, age-based system that determines who has power and who doesn’t. “That's not the way the new jobs of the future are being created. They're not being created for a 40-year-old. They're being created for people with certain skills, including the ability to learn.”

Leveraging All Talent

“I didn't write Perennials to make successful people even more successful,” he says. “My goal is to help everyone realize that the way we have structured our lives, including our working lives, is not just self-defeating, but it hurts everyone who misses one of those life transitions, including teenage mothers, high school dropouts, young adults who grew up in foster care, and people who have abused substances. It's costing society a ton of money because those people have talent and there should be a place for them in the workforce.”

“The current obsession with generations and age is not good for anyone. It prevents us from helping people make the most out of their talents. It made sense a century ago when we needed workers not to think but to perform a job repeatedly. But the world has moved on. We are now entering a postgenerational society.”