Generational Diversity and Employee Engagement

Joe Gerstandt, author of the blog Our Time To Act, commented today about the findings in our book on employee engagement and generational diversity. Joe is passionate about helping organizations appreciate “the value of difference”.

Our research shows that as an organization becomes more age diverse employee engagement suffers. It is an important example of how most organizations are struggling with diversity, in this case having four unique generations in the workplace.

In part, Joe reflects on these results:

Diversity is hard.

Most really important, really valuable stuff is hard.  Honesty is hard.  Change is hard.  Leadership is hard.  So is diversity.

Increasing the diversity (or difference) in a social group changes that social group. Always. Every time. Any time you bring more difference or pay more attention to existing difference in a social group you increase the potential for in-group/out-group dynamics, stereotyping, tension, conflict, etc.  We have a very real tendency to see difference as the cause of these dynamics, but this is not about the difference…these outcomes are about the container that the difference exists in.

Joe asked me to offer up more details on our research, which I’m delighted to present. These findings are based on a study of over 3,200 US employers. (By the way, we’ve had folks ask about how diversity in gender or ethnicity impacts employee engagement. Those demographics are not currently collected in survey from our friends at Quantum Workplace— good idea for future research!)

From Re-Engage, pages 36-38:

We conducted a novel analysis of the results from Best-Places-to-Work surveys to determine whether the more age-diverse employers had lower engagement levels. In other words, we asked: “Does having a broader and more balanced spectrum of ages represented in the workforce reduce an employer’s chances of creating a highly engaged workplace?”

The results of our analysis-after controlling for other company characteristics such as age, position type, company size, and tenure-showed us that greater variation in age within a company actually has a negative impact on engagement. The statistical results were quite eye-opening.  It turns out that, after controlling for the variables described above, the level of generational diversity accounts for more than 25 percent of the variance in employee engagement. Said another way, this single variable, what we call the Generational Diversity Indicator (GDI), is a significant factor in the ability of an organization to create a highly engaged workplace.

How much of an impact does this single factor have on employee engagement? The greater the age diversity (the higher the GDI), the less likely the employer will have high engagement scores.

For example, according to our study:

• If an employer has a slightly age-diverse workforce (more than 1.5 on our scale), it is three times more likely to have a lower overall engagement score.
• If the employer has a moderately age-diverse workforce (more than 2.0), it is five times more likely to have a lower overall engagement score.
• If an employer has a highly age-diverse workforce (more than 3.0), it is six times more likely to have a low overall engagement score.

Even the best of Best-Places-to-Work employers find generational diversity challenging. The CEO of one winning company, who has primarily hired younger employers at his technology-based services company, has admitted to failures in assimilating older employers into the culture. He states: “Older employees often have perceptions of work which aren’t necessarily wrong, but are very different than our culture. We’ve had a few who didn’t make it because they were rejected by younger employees before they even had a chance to succeed.”

The correlation between greater age diversity and lower engagement applies to employers regardless of average workforce age-in other words, regardless of which generation is predominant in the organization. Thus a relatively homogenous company of mostly Boomers or mostly Generation X-ers is more likely to have a higher level of employee engagement than an employer with more generational diversity.

In summary, a company’s GDI is a revealing demographic, potentially indicating a significant challenge to its efforts to develop a highly engaged workforce. Most employers aren’t going to resist the demographic trend and economic necessity of generational diversity just because it makes employee engagement more challenging.  The tide cannot be turned. We all will need to accept this phenomenon while working to lessen any negative effects and turn increased diversity to our advantage where we can.