This is the 3rd article in our three-part series of megatrends that are currently defining human resources across the world.
The first and second megatrends covered Navigating the Human Energy Crisis and Optimizing Organizational Plasticity. These articles focused on the level of stress felt across organizations globally, and how companies could seize the opportunity to build better relationships with employees, as they navigate the changes together. This third trend highlights the effects of Generation X taking on more leadership roles, including in the C-suite, as baby boomers retire.
The Gen X Focus
The rise of more Gen X leaders has come with more intense focus on areas that were not necessarily concentrated upon in the past. This includes corporate social responsibility measures (CSR), as well as environmental, social and governance (ESG) initiatives:
- Gen X leaders’ increased prioritization of CSR and ESG initiatives leads to better performance and higher market value for their organizations
- This shift in leadership demographic brings a different perspective on the value of diversity and inclusion at the boardroom level, often increasing total firm value
- Succession planning and broader and formalized approaches to ESG will be critical in maximizing Gen X’s leadership impact
How Corporations Have Changed
Sixty-eight percent of CEOs in both Fortune 500 and Inc. 500 companies were Gen Xers as of 2018. This is a very large shift occurring as baby boomers continue to retire in great numbers.
Sixty-three percent of Bank of America’s high net worth Gen X investors review portfolios to prioritize ESG investments. And sixty-six percent of U.S. public and private companies admit they still have no formal CEO succession plans in place.
What Organizations Can Do
Generational identity is a potential driver of directors’ abilities to impact organizational performance, according to the Paul College of Business and Economics. Organizations need to rally around the cultural growth opportunities that a new take on leadership brings and put the right systems in place to increase the ripple effect of inspiration that well-placed executive priorities can have on people in all roles. Key actions include:
Bias Detection: Implement technology such as sentimental analysis tools throughout your recruiting, performance and retention processes that help you uncover trends that may indicate unconscious bias. With this level of data, it becomes easier to correct your practices and retrain decision makers, increasing the likelihood of making diverse, inclusive choices for positions at the director level and above.
Succession Planning: Decide on and automate the standards you use to determine when someone is ready for the next phase in their career, including executive leadership. This will allow you to actively track your people’s readiness to move up in the organization and help you act when the time is right through connected processes.
Social Responsibility: Tap into the causes your employees care deeply about and give them regular opportunities to invest in those causes through charitable giving woven directly into your pay system. Making it easy to promote causes that your leaders care about and allowing your people to show leadership in CSR efforts will increase engagement and benefit your employer brand.
Leaders, let’s work together to bring focus to the ethical values you want to prioritize all across your organization. Contact us at info@axiomhrs.com for a free demo of UKG’s HR solution so you can use employee insights and trends to continue to pave the way, now and in the future.
Data from this article is taken directly from UKG’s Human Resources Megatrends 2023 report.
