New Study Reveals Gen Y is More Educated, Less Employed

A recent study by the Pew Research Center revealed some fascinating findings on Gen Y. According to the study, 40% of young adults age 18-24 were in college in 2008, which is a higher percentage than any previous generation. Great news for employers, but despite their higher educations levels, Gen Y’s lack of experience also means they have the highest share of unemployment (or are simply out of the workforce) of any generation in nearly four decades.

As the recession ends and the economy picks back up, Gen Y will enter the workforce in record numbers as many Baby Boomers, who continued working because of their plummeting 401(k)s, finally retire. That also means good news for Gen X—you’re about to move into higher management positions as Boomers start to phase themselves out of the workforce.

The study also revealed some interesting insights on how Gen Y differs from other generations. Here are a few highlights:
• Their families are different. Only 61% grew up in a two-parent household, the smallest number in three generations.
• They are starting families later. Only 21% of Gen Y is married, half the percentage of their parents’ generation.
• They are active. Compared to previous generations at the same age, Gen Y is more willing to vote and more likely to volunteer for a cause.

For employers, the increased volunteerism of Gen Y shows a willingness to go above and beyond, which is perhaps the key characteristic of an engaged employee. And Gen Y has to be hungry to work—after so much time spent in school, it’s finally time to embark on a career. What better combination could employers ask for?

The face of the workforce is changing. Companies that recognize (and act on) that change will be a step ahead of the competition as the country emerges from the recession.

Communicating Change: Do You Keep Your Employees in the Loop?

Picture this: Your company is about to roll out some new changes that will affect all employees. How do you communicate that?

Employees always have an opinion about change, whether it’s good or bad. It can be simple or complex. It can directly impact them or not. It can be the understanding that they need to update paperwork for health benefits. Or knowing the process to be considered for promotion. The news and implementation of a restructuring or a merger are extreme examples of change.

Not surprisingly, employees at companies undergoing transition — such as restructuring, merger, or acquisition — trust management less and feel less informed than do employees at stable companies. Even companies that performed well last year have been challenged with putting their business plan and vision in context of world events for employees. Added stress and confusion in the marketplace increases the desire for information and communication.

One of the most difficult times for communication is during bankruptcy. When US Airways filed for Chapter 11 bankruptcy in 2002, they needed to communicate that message to more than 35,000 employees. To complicate matters, employees were sure to be grilled by passengers on how the bankruptcy would affect both their travel and safety. So on the day of the bankruptcy, US Airways launched all of their communications to employees. Employees at all levels of the company were given information about what the bankruptcy would mean, and how to communicate that message to passengers and business partners.

So what was the end result? During reorganization, US Airways was ranked first for 2002 in an annual airline-quality rating conducted by the University of Nebraska and Wichita State University. And seven months later, the company successfully emerged from Chapter 11. Had the company not handled their communications well, the results could have been drastically different.

Below are some thoughts on different degrees of “drawing back the curtain” and the impact of these approaches.

1. Do nothing or as little as possible. 
Companies sometimes go this route because they don’t want to rock the boat. The irony is it’s the most sure way to sink the Titanic. It takes years to build trust and a second to lose it. If employees feel leadership is not interested in their thoughts or contributions at a pivotal time in the company, then the damage can be permanent. Plus, the communications world we live in is not conducive to “going dark” – Twitter and Facebook have made sure of that. Some companies post company news on Twitter to be sure employees have access to the same information as consumers.

2. Tell people who have a need to know. This approach creates an inner and outer circle among employees. The closer you are to the center, the more special you feel. You can generate a lot of buzz this way, but you also can lose brand ambassadors in the making. Some companies are using “invitation only” campaigns to test social media with employees. This usually works pretty well because the end goal is to grow the network so that everyone is engaged. Another rule of thumb is that when it comes to cultural news and information, the need-to-know approach doesn’t work. At Tribe, we’ve found that the way that companies approach internal culture pieces correlates with how they engage employees as a whole. We’ve worked with Fortune 100 companies on culture books, and their approaches vary wildly. Some leadership teams involve employees extensively, even having them create the content themselves. Others tell the employees what the culture ought to be in a way that’s about as gentle as hitting a nail with a hammer.

3. Gather consensus from the beginning. It’s human nature to embrace change more when you’ve been included in the process. While this is a proven way to foster brand ambassadors, the risk is getting bogged down in the back and forth of gaining the buy-in from a large workforce. In the end, someone’s got to be in charge and that person or persons will have more facts and information at their fingertips. Another consideration is that the earlier you communicate news, the better prepared you need to be to move fast and follow through with sustaining communications. When it’s good news, you want to leverage it as long as possible. And, on the flip side, if it’s not good news, prompt and clear communications indicate grace and a vision for the future when under fire.

Getting Leadership to Lead

Someone once told me that the sign of a true leader is how many leaders come out of their camp rather than the number of subscribers they have. People can confuse being a leader with being really good at a specific task or having a special talent. You can be a numbers genius or a brilliant creative and not have great leadership or management skills.

In Tribe’s research on Gen Y and Gen X employees, we posed the question, “What makes someone a leader?” The top three responses were as follows:

  1. Inspiring others to do their best. Great leadership makes the people around them better.
  2. Taking responsibility. Which means making the tough decisions. As they say, that’s what you get the big bucks for, right? A directionless leader causes confusion and mutiny in the ranks.
  3. Being able to give criticism well. People crave valuable feedback on the work they’ve done. One quality of Gen Y is they’re known to ask for constant feedback. The ability to give someone constructive criticism with grace in a way that they can accept and maintain their dignity is an important leadership skill.

The CEO and C-level people in a company really tell the story of what all of the leadership and management of a company is like. If the person in the corner office leads by fear, then it’s probable that everyone who reports to him will follow that model. Nothing kills innovation faster.

Last year, employees looked to leadership for guidance in how to “get through it.” The stronger the leadership, the better in shape that company is today to motor successfully through 2010.

But that very top level of leadership – the C-level and the other folks in mahogany offices – can’t do it alone. They need to exhibit leadership skills and instill those skills in others so that it trickles down to every corner of the company. Everyone’s the CEO of something, but that attitude can only exist where leadership empowers others to contribute and recognize their own power.

The first thing that leadership must do is explain to management how important it is for them to assume a leadership role. Three key points are:

  1. How much people are relying on them
  2. How much they impact others
  3. How much their actions impact others

Success is directly tied to leadership. Employee engagement has been defined as the point where thinking, feeling and acting meet. A particularly challenging (and exciting) time comes when it’s time to communicate change. If employees are stuck in their old ways, don’t expect much in terms of real change. Employees need to see how what they do affects the entire business, and then they’ll start to take ownership over the things they personally touch. At that point, you can expect change to be fully embraced.

Big-Bank Bailout Will Now Benefit Small Banks — and Small Businesses

Small business owners might be about to get our own version of the bailout, sort of. A proposed $30 billion of the money the big banks have repaid on their bailout loans could go to community banks — in hopes that they’ll in turn lend it to small businesses. President Obama announced the plans for a Small Business Lending Fund this week as part of his job creation program, once again reinforcing the idea that helping small business will help put more Americans to work.

It’s gratifying to see small businesses be taken seriously, and in fact, relied upon to help turn the economy around. When the giant banks were deemed “too big to allow to fail,” I know many of us entrepreneurial types bristled, knowing full well that our success or failure was something that was, and always had been, entirely up to us.

Many of us do, however, take comfort in the fact that our bankers have our backs. Of course, they’re much more eager to lend us money when we don’t need it than when we find ourselves in a lean stretch, but still. I consider my banker a partner in growing my business. Our close relationship and his attention to my company’s needs are due, in large part, to the bank being a small community bank, and not one of the giant financial institutions.

I’m all for a plan that frees up more capital for those community banks to lend. A New York Times reporter quoted Karen Mills, the head of the Small Business Administration (SBA), as saying, “When you look at what’s causing the problem, the problem is that small community banks might lack capital.” The Independent Community Bankers of America point out that “every dollar of capital that goes into a community bank can potentially be leveraged 8 to 10 times into loans to small businesses,” according to the same article in the Times.

The big banks certainly aren’t jumping at the chance to lend to smaller companies. While small-business lending is down for the top 22 largest lenders under the federal Troubled Asset Relief Program, SBA-backed loans are up, according to the Wall Street Journal. In previous years, estimates of SBA-backed loans ranged from as low as 1% to a high of 8%. At least one industry expert predicts they’ll be up 10% to 15% this year.

Entrepreneurs are accustomed to slogging it out on their own. But if the country’s counting on us to create a bunch of jobs, it sure does help to have some sector of banking willing to lend the money it takes to expand and grow. Here’s just one more reason I advise small business owners to find a good banker at a community bank instead of going with a big bank where you’re more likely to get lost in the shuffle.