How will My Staff Affect My Succession Plan?
Most business owners would agree that it is becoming increasingly difficult to attract and retain good staff. There is increased reporting on the skills shortage in various industries and there are no signs that this is going to change. According to recent research, in two years time there will be more Australians leaving the workforce than entering it, adding to the skills shortage.
As a result the composition of our workforce is changing. The young people that are currently entering the workforce, the so called Generation Y-ers, have a much different personality profile than any other generation in the past.
Who is Generation Y?
Generation Y refers to those born between 1978 and 1994. Generation Y makes up 20.5% of our population and 45% of our workforce. They are a generation of consumers wanting an instant lifestyle. They are career-oriented and self-interested, tire quickly of routine and demand change. They do not see business owners as role models as they have different lifestyle aspirations.
What do Generation Y want and expect from employers?
Recent research shows that Generation Y want workplace flexibility, including telecommuting and working hours that allow them to do the things they love outside of work. They want to be involved in a variety of projects at any one time.
Money is important to Generation Y but they are also interested in non-cash incentives. Research also shows that the Generation Y attitude will make it impossible to retain key staff if your managers are not excellent people persons.
Why is Gen Y important to your business?
Because they are your future!
Generation Y's love of a challenge and their adaptability to change make them extremely valuable resources. They are an important part of the workforce and more and more businesses are reaping the rewards from their employment. However, the way to employ and manage them is changing as these young professionals now have a lot more career options and tend to be more transitional, with long term commitment to one business not a priority.
If as a business owner you do not recognise that the workforce is changing and make adjustments to manage this change, it will have an adverse affect on your business, your lifestyle and consequently your exit from the business. These implications include:
- Difficulty in attracting new staff
- Retaining existing staff
- An increase in labour costs
- Less stability in the workforce
- Increased stress for the business owner
- Commercial opportunities are foregone (and end up with the businesses who are better at staff recruitment/retention)
- Business owner spending more time on staff and less time on clients.
Without good staff you are unable to grow your business and your business will remain owner reliant. Both of these issues will adversely affect the value of your business and hence the quality of your retirement lifestyle.
In the future, there will be a lack of suitably qualified, willing successors along with an increasing cost of labour. It is therefore critical for every succession plan to include strategies for staff recruitment and retention. It is vital that these strategies include specific actions on attracting and retaining Gen Y employees.
Staffing issues that need to be considered when strategising your succession plan:
- Effective use of Staff
- Recruitment
- Management
- Future Ownership
Summary
Clearly, staff play a major role in your business success and your succession. Firstly, they determine the value of your firm. Secondly, they provide an excellent 'pool' from where your future successor may be sourced. At a time when the average age of a business owner is over 50 it is crucial that they learn to understand and work with Gen Y employees.
Sources:
Generation Y: Thriving and Surviving with Generation Y at work, Peter Sheahan
Managing Generation Y, Bruce Tulgan & Carolyn Martin
Best Employer Australia Survey, Hewitt & Associates; The War for Talent
Australian Bureau of Statistics, Australian Financial Review, RMIT and BStar
GWP Magazine Issue #27, Nov-Dec 2009
Articles and any content can not be copied and/or displayed in any other applications; printed/web-based etc without the written permission of GWP Magazines.
