Managing the most important asset: PEOPLE

Northwestern Financial Review, Mar 15-Mar 31, 2005 by Bengtson, Tom

Employment issues surface as key challenge at ABA's community banker's conference

Managing employees can be a lot tougher than managing credit; the 700 bankers gathering in Phoenix for the Community Bankers Conference hosted annually by the American Bankers Association got a graduatelevel course in human resource management. Bruce Tulgan, a consultant from Connecticut, was the lead professor, with concurrent session leaders serving as teachers' assistants.

The theme of the Feb. 20-23 meeting was "Focusing on the Future: Successful strategies for today's community banker." While presentation topics ranged from health savings accounts to overdraft protection, from branching to anti-money laundering, there seemed to be no getting away from the topics surrounding employees, including their expectations, performance, and retention.

A fundamental shift in the workplace in the last decade has made management much more difficult. Tulgan, founder of Rainmaker Thinking, Inc., said the workforce has shifted away from a long-term hierarchal approach toward a new shortterm transactional approach. The consequences of this shift require greater levels of hands-on management but should result in higher levels of productivity.

"The old way was to do as you are told, keep your head down, make one short-term sacrifice after another and in the long run the expectation was the organization would take care of you," Tulgan explained during a general session. "In the new model, employees ask what do you have to offer me today, tomorrow and next week?"

Tulgan described groups of workers who fall into four age groups: Silent Generation (born before 1946), Baby Boomers (born between 1946 and 1964), Gen Xers (born between 1965 and 1977), and Generation Y (born after 1977). Initially, older workers thought the younger workers were selfish, given their propensity for immediate reward. Tulgan explained, however, that many older workers, including Boomers, have adopted the same attitudes introduced by employees in generations X and Y.

Tulgan said managers brought about the change. They abandoned legacy employment practices that promised lifetime employment, for a more flexible model. When they instituted the first waves of downsizing in the 1990s, older workers panicked. Younger workers, on the other hand, said, "Downsize me. I'll just go do something else."

Tulgan summarized: "Did managers think that the people who weren't downsized out of a job wouldn't begin to think like free agents? There are free markets for everything, including talent."

Tulgan said managers were right to abandon promises of job security, which often held companies back. "Business managers need to be able to move quickly... Business leaders had to kill the myth of job security," he said.

When the dot-com bubble burst with the onset of the new millennium, Gen Xers toned down their attitude, but instead of adopting the Boomers' long-term climb-the-ladder approach, they began to "keep their options open."

"No hard feelings, they'd say," Tulgan play-acted on the stage with an empty office chair. "I have to take care of myself and my family."

Young workers, Tulgan said, "are ready to work better, faster than anyone, all day, everyday. But they are not willing to do that in exchange for long-term promises about long-term rewards. They have high expectations not just for themselves, but also for you. They don't want to know what they are going to get in seven years, 10 years, or 12 years. They want to know what's the deal today, tomorrow, and next week. They want to know what you can do for them now."

Young workers are the product of an educational shift that took place in the mid 1980s among teachers, parents and counselors. They began emphasizing self-esteem, Tulgan noted. "Don't worry about how the other kids play. Those are their rules. That's their style. You have your rules, you have your style." Tulgan said that's why so many younger workers have trouble showing up to work on time today.

Older managers can easily become frustrated with the attitude of younger workers. "We pay you, do as you are told!" Tulgan described the reaction of many managers toward younger subordinates. "But once you do that, you have already accepted a fundamental shift away from the longterm hierarchal model toward the short-term transactional model. It used to be 'start at the lowest rung of the ladder, work you way up,' Now it's 'we pay you, do as you're told.'"

Younger workers are experts at information management, given that most of them were raised on computers, DVD players, cell phones, instant messaging, and satellite television with hundreds of channels, Tulgan said. In the workplace, he said, this makes them excellent researchers. "They can find the right answer, they just don't always know what it means," he said. "Older workers have to put those answers into context. They can provide the depth and the wisdom."

As younger workers began to fill more of the employee ranks, and managers increasingly abandoned the idea of job security in favor of flexible staffing levels, Boomers began to realize that seniority didn't mean anything. But instead of being outraged, Tulgan said they adopted the short-term transactional approach to employment that younger workers held from the beginning. "When the Baby Boomers started thinking this way, there was no turning back," said Tulgan.