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Managing the newest generation in finance isn’t as hard as some make it out to be. But there are still hazards.
Jason Karaian, CFO Europe Magazine
November 3, 2008
In retrospect, six months ago wasn't the best time to join a bank, as layoffs in the sector have been fast and furious since then. But Helena Farstad takes it in her stride. After all, should the bank let her go, it would be her third brush with redundancy before turning 30. "When it comes down to it, you're on your own," says the 28-year-old, now a finance business analyst at Lloyds TSB in London. Although committed, she's not "emotionally attached" to any employer, she adds.
In previous jobs, at chemical groups Uniqema and ICI — both taken over and restructured while Farstad was working in the finance department — she was surrounded by "people who thought they were sorted for life." When they learned this wasn't the case, she saw "a lot of despair" around her office in northeast England, a region with a history of wrenching de-industrialisation. "It was a horrible, but useful, lesson to learn," she says.
Stories like hers add nuance to the stereotypical image held by many older executives of the latest generation of workers, commonly referred to as Generation Y or "millennials." These employees — roughly speaking, anyone in their twenties or early thirties — are often considered disloyal, distracted, impatient and needy by their elders. Hiring and retaining these young guns can be expensive, and exasperating, many complain.
In a global survey this summer of more than 160 senior executives, IT firm Genesys and the Economist Intelligence Unit, a sister company of CFO Europe, found that only 3% of top managers considered the millennials' most distinctive characteristic to be a reliable work ethic. (See "Skill Set" at the end of this article.) Three-quarters were most impressed by this generation's ease with technology, though this could be a backhanded compliment as dexterity on a mobile phone or an iPod are hardly critical business skills.
But speaking to young finance workers, such as Farstad, dispels many of the stereotypes, or at least adds some subtlety to the caricature. There is little doubt that this generation has "a completely different view of the world than the generations before them," says Ian Graves, managing director for continental Europe at Robert Half, a recruitment company. They have grown up immersed in technology, encouraged — some would say coddled — by extremely supportive parents and have yet to experience a recession during their working lives. And however current conditions may affect the job market in the short term, most millennials are aware that long-term demographic trends are in their favour as the bulge of "baby boomers" now start to retire.
In response, companies are refashioning benefits packages, working patterns and much else. Nearly 70% of global HR executives surveyed earlier this year by WorldatWork, a professional association, said that they will tailor rewards to different generations within five years.
But before finance chiefs fret about overhauling benefits packages and rewriting corporate charters, Graves notes that millennials crave "stability, security and challenge, like everyone before them." They may express these desires differently — thus requiring some adjustments to traditional corporate structures — but, deep down, they are not the entirely new breed of employees that many of the older workers believe them to be.
Commitment to the Cause
Take lack of loyalty, often the biggest complaint that older employees have about the young. There is a big difference between loyalty and commitment, says Farstad. "I am fully committed, but I cannot afford to depend on a company no matter what," she declares.
Mesut Eken, a 29-year-old controller in a business unit of Continental, a German automotive supplier, says that the biggest misunderstanding between the generations is to "equate age with experience." Job promotions based mainly on length of service are a big turn-off for Generation Y, he adds. Eken started work straight after school at Siemens, where he got a degree from its corporate university while he worked in finance. He rose to a senior finance role during a four-year stint in Brazil, including time at a mobile-phone unit that was later sold to another firm. Now he's working in Dortmund after the automotive unit of Siemens he was working for was sold to Continental last year.
Michal Kujawiak, a 28-year-old management accountant at Jewson, a UK-based building-materials company owned by Saint-Gobain of France, stresses that loyalty is a two-way street. "If a company is selfish, then so are its people," he says, expressing a low opinion of "doing time" in order to advance. "This is not prison," he quips.
Not all, or even many, millennials are itching to move on. For Farstad, Eken and Kujawiak, changes in actual jobs and responsibilities have been as a result of formal development programmes or been forced by takeovers. A survey last year of 1,000 full-time employees in their twenties by Robert Half and Yahoo HotJobs found just as many expected to stay in their jobs for six years or more as wanted to leave in a matter of months. (See "Not So Fast" at the end of this article.)
Eken rebuts the common refrain that younger workers are easily distracted, and seduced by higher pay at other companies. "If I were just after money, I would have changed companies several times already," he says. He has received, and rejected, CFO offers from smaller companies, in some cases offering a 30% pay rise. At large multinationals, he see opportunities to hone his finance skills, passing through "all of the various functions that you need to know to become a CFO." He doesn't take the move to finance chief lightly. "Once you take the top position at a company, you stay for three or four years and then what?" he asks. "As CFO, you can't just switch from one post to another."
Enrico Garino is similarly clear-eyed about what it takes to reach the top. "It would be great to be the CFO of a big company some day," says the 26-year-old commercial controller working in the auto sector in Italy. "I would love to stay at this company for my whole career, but you never know where the winds will take you." For him, "the next ten years are about gaining knowledge, with money of secondary importance."
If anything, members of Generation Y, assuming their needs are met, appear less likely to be lured away by pay than older workers, claims Brian Wilkinson, a board member at Dutch staffing group Randstad. A survey of employees by Towers Perrin last year found that pay was equally valued across age groups. (See "What Workers Want" at the end of this article.) It was also found that members of Generation Y ranked learning and development opportunities higher than older respondents.
Millennials "thrive on variety," Wilkinson asserts, so companies "need to introduce some variability into career management" in order to hang on to them. This can be tricky for the parts of finance with rigid cycles and repetitive tasks, but Wilkinson urges that, whenever possible, offering a range of functional and geographical moves is the best way to engage — and get the most from — young employees.
Richard Gartside, HR director at Ernst & Young, says that the firm is "pushing engagement down much earlier than before." Even newly qualified employees are able to consider themselves on "partner track" after only a few years at the firm.
Some see this as impatience. For millennials, it is simply ambitious.
Home and Away
Gloria Suen "hopes to make a big impact at a company" within five to ten years. So far, the 32-year-old has been on an increasingly familiar globe trotting path. She worked in finance at American Express in New York, got an MBA at IMD in Switzerland and is now an associate director at Standard Chartered Bank in Singapore, which she joined earlier this year. Working in the capital markets gives her a new perspective on finance. "A CFO deals with much more than a P&L," she says, so the experience will be handy when, as she hopes, she eventually becomes CFO of a medium-sized business, maybe something along the lines of Standard Chartered's microfinance unit.
Kujawiak is also thinking of a larger role at one of the brands in his company's portfolio. He is considering returning to his native Poland next year, preferably with Saint-Gobain. He reckons that becoming a controller for a smaller brand or region in the next four years is "doable." Eken and Garino are also angling for international moves in the near future, with their present employers if possible.
In addition to providing clear development paths that include regular job rotations, companies are mindful of a concern for work-life balance among the younger ranks. In a global survey of more than 1,100 senior executives released in September, the Association of Executive Search Consultants found that 25% of respondents cited having programmes to improve work-life balance, up from 8% in a 2006 poll.
But how much of this is driven by needy millennials? "Growth in awareness of work-life balance transcends the generational divide," reckons Gartside of Ernst & Young. "Because it is emerging now, it's often attributed to Generation Y."
"I work to live, and not the other way around," says Kujawiak. At the moment, 40 hours a week is enough, he says. "I have a wife and I like to see her." What's more, he blanches when managers treat their charges as "minions." Though he hasn't experienced this directly, he has friends who have, and "this could be what causes a snag between the generations," he says. "There is a lot more focus on soft skills now."
Farstad has similar feelings. In her experience, large companies tend to have "male-dominated" cultures. "I don't want to live by those rules," she says. At Lloyds TSB, where her line manager and the managing director of her unit are women, her team promotes "inclusive and collaborative" behaviour. She says she likes the fact that her superiors "encourage feedback and input" from across the ranks.
As economies slow and layoffs mount, will the desires of Generation Y still be met? "For Generation Y, everything has worked out so far," says Jill Storey, a partner in KPMG's international executive services practice. Now, many companies will "ask people to do things they don't want to do," she adds. How will the millennials react?
They respond with typical confidence, which is either inspiring or naïve, depending on your point of view. "Companies are looking for good, young people," says Eken. "With the international experience I have, I don't see any reason to worry." For Kujawiak, "My skills are marketable enough that I won't have a problem in the long term." Similarly, Garino sees "no problems finding a job; finance is a good field in this regard."
In London, where the economic turmoil is taking a heavy toll on the city's financial-services community, not only is Farstad unfazed, but she also sees the downturn as another chance to develop her skills, akin to when she qualified as an accountant with CIMA last year. "My generation should welcome this period," she says. "It will be a great learning experience."
Jason Karaian is deputy editor at CFO Europe.
Additional reporting by Gabor Taroczy, an intern at CFO Europe.