Chapter 12: A Conceptual Framework for Managing Intergenerational Relations in the Workplace

Recent studies in the European Union point to the fact that population is aging (European Commission, 2009; Giannakouris, 2008). Alongside of this, demographic forecasts within the European Union and other western countries point to large gaps in employment because of the looming Baby Boomer retirements and a coming lack of younger employees to replace older ones (European Commission, 2011). Thus, changes in the demographic make-up have major consequences for society, organizations, and the individuals who work in them. At a societal level, governments are alarmed about financing a growing retired population, leading them to take measures aimed at raising the legal age of retirement. The consequence for the individual of an older retirement age is a longer working life. This in turn means that the average age of workers within organizations will most likely rise. Alongside of this, because of fewer births, a lack of new workers will raise the demand for labor, forcing organizations to keep older workers longer in service or lose valuable human capital. These developments combined are leading to a higher average age of the workers in organizations. This is in itself not necessarily a problem, but it poses some major challenges for managers because as people remain longer at work, diversity on the work floor increases. In fact, for the first time ever, four different generations are in the workforce. Managing diversity of any type is important because on the one hand it may have added value, but on the other hand it can be problematic, having negative effects on social structures within the organization. Poor generational management – or a lack thereof – could adversely affect crucial organizational processes such as knowledge transfer, innovation and general communication, which in turn negatively affect organizational performance.