How 5 Generations are Impacted by a Recession

A Historical First.

Over the last two decades, recessions have impacted careers across all generations. And now, in 2020, that means that a total of five generations have been impacted by a recession during their lifetimes. To make matters more complicated, layoffs, furloughs, and retirements have drastically evolved alongside the new needs of modern workers.

During the recession of the early ’90s, the workforce only contained three generations: the Silent Generation (1928-1945), the Baby Boomer Generation (1946-1964), and Generation X (1965-1980).

Workforce dynamics during that time were very different. Employees worked for fewer companies over their career and people were retiring much earlier. In fact, people who made up the early part of the Silent Generation, looked forward to retirement at the median age of 62 and the leisure and relaxation that next phase brought to the end of their life.

During that same time, Gen Xers and Baby Boomers who were impacted by layoffs had less to worry about in terms of transitioning into new jobs. The threats of a competitive younger generation entering the workforce with more technologically sophisticated skills gobbling up all the jobs was not a reality, and the concept of professional branding and skills becoming quickly obsolete was not a thing until after the days of the internet.

As for executives, the impact of layoffs was generally blunted by big severance packages and lots of time to decide their next step after - usually - a lifelong career with one employer.

Fast forward from 1994 to 2017. Now, two more generations enter into the workforce: Millennials (1981-1996) and Gen Z (1997 – 2012). This was the first major shift in the workforce as the Millennial Generation became a third of the workforce and the ‘digital native’ Gen Zers were just starting to collect a paycheck as well.

During this time of workforce disruption caused by an influx of Millennials and Gen Z, the Baby Boomers began redefining retirement as the lifespan of the American worker neared 80. Career transition for the late-stage Boomers was all about the “reinvention” version of retirement, meaning that Boomers want to explore new paths that they may have missed out on during their careers, hobbies or part-time work that appeals to them, and many other things instead of simply retiring into a leisurely life on the beach..

The social and emotional aspects of retirement were of more importance to this generation. Life meaning, purpose, family, and health have become the most important to pre-retirees, causing them to plan and focus on different timelines when planning their retirement transition.

At this point, executive transition had become more complex for employees who’ve spent their careers with one company in one industry. Technology and job search in 2017 looked quite different, too, particularly for those executives who did not want to retire and wanted to stay in the game.

Board seats, private equity, and advisory work have historically been a natural next step for traditional executives seeking a transition into something different. However, with the age of digital and executive roles becoming more competitive and diverse in terms of age, gender, and race leveling the playing field, the once traditional executive transition is now a thing of the past.

In 2020, the impact of the recession is now on a total of five generations and has been unprecedented on many levels that we’ve never seen historically. For example, organizations are turning to virtual work as a standard in many companies, such as Twitter and Microsoft.

Retirement - and reinvention - for the typical worker over 55 has been redefined and is now the fastest-growing labor pool as defined by the Bureau of Labor Statistics in 2019.

The Millennials have been hit hardest by the recession financially as student loan debt continues to be a burden on their ability to obtain financial stability and independence.

For companies looking to reevaluate their career transition strategy for employees impacted by layoffs, should consider all these factors and how they impact generations differently.

Outplacement firms in 2020 are challenged to provide organizations with a robust delivery model that caters to all generations around the world. A transactional, cookie-cutter program that serves all levels and a few generations will not cut it.

As companies consider the needs of their exiting employees, they should strongly consider the complex nature of their workforce in 2020 and their transition needs for the future.