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Workforce Segmentation: Various Employee Groups

Workforce segmentation refers to the process of identifying distinct groups of employees and designing human resources practices for each group based on their unique needs and characteristics. Segmentation can be done in many ways depending on an organization’s business and human resources strategies.

Generational-Based Workforce Segmentation

Demographic trends in the United States are changing and will continue to do so during the next four decades. There are now five generations of employees with their own unique work-related values and attitudes toward learning and career development:

  • Traditionalists (born between 1922 and 1945)
  • Baby boomers (born between 1946 and 1964)
  • Generation X (born between 1965 and 1980)
  • Generation Y or Millennial (born between 1981 and 2000)
  • Generation Z (born after 2000)

Table 1.4 highlights each generation’s work values.16 Attitudes toward learning are discussed in detail in Chapter 6, “Customized Learning and Learner Control.”

Table 1.4 Work-Related Values and Attitudes

Traditionalists Born between 1922 and 1945 Ages: 68–86

Experienced the Great Depression, World War II, and several societal and economic changes during their lives

  • Value job security and hard work
  • Tend to be thorough, formal, and loyal to their employers
  • Comfortable with stability; respect chain of command and institutional hierarchy

Baby boomers Born between 1946 and 1964 Ages: 49–67

Grew up during a period of relative prosperity, safety, and optimism

  • Value compensation and monetary benefits
  • Tend to embrace the social ideology of live-to-work and view work as a vehicle to financial wealth and success
  • Favor individualism and expect to be rewarded for good performance

Generation X Born between 1965 and 1980 Ages: 33–48

Grew up surrounded by financial, economic, and social insecurity

  • Have the mentality of live-to-work and not overly loyal to their employers
  • Tend to be individualistic, goal-oriented, self-reliant, unstructured, impatient, informal, and results-driven
  • Comfortable with challenging the status quo

Generation Y or Millennials Born between 1981 and 2000 Ages: 13–32

Grew up in an era of technological advances and changes

  • Motivated by jobs that provide growth, flexibility, mobility, and a sense of purpose and meaning
  • Comfortable with multitasking, change and innovation, and prefer instant and real-time feedback
  • Value social responsibility and environmental concerns

Generation Z Born after 2000

Are growing up in a world that is highly connected, interactive, uncertain, and open

  • Are curious, globally focused, impatient, and social-media savvy
  • Comfortable with big data, gamification, real-time virtual communication, and multitasking
  • Desire mobility, pursue entrepreneurial endeavors, and embrace change and abstraction

It is estimated that the 55 years of age and older age group will total 97.8 million in 2020, which means that the group will comprise approximately 28.7% of the resident population; in 2010, this number was 24.7%.17 This age group, referred to as baby boomers, is not retiring at traditional retirement age. Hence, they continue to work or seek work. In general, they work for a considerable length of time after reaching retirement age. For the baby boomer generation in particular, retirement age is viewed as fluid. In instances such as this, the role of the learning function is to minimize any adverse reactions to these workers by managing positive and negative biases toward them in the workplace.18

Conversely, when baby boomers do retire (and for those who have retired), the loss of knowledge and experience they take with them is cause for concern for many organizations.19 The role of the learning function here is to facilitate the transfer of knowledge from older workers to other workers in the organization.20

Diversity-Based Workforce Segmentation

The U.S. workforce is becoming more diverse and will continue this pattern in the coming years. According to recent data, approximately 16% of the labor force is Hispanic, 12% is African American, and 5% is Asian.21 It is estimated that the proportion of people of color participating in the workforce will continue to increase as the United States becomes more racially and ethnically diverse.22 In addition, immigration is now a core source of labor supply and strongly contributes to the racial and ethnic makeup of the U.S. workforce.23 It is estimated that 16% of the labor force is foreign-born (16 years old and over)24 and current trends suggest that immigration will only increase, making the U.S. workforce culturally and linguistically diverse. Finally, women make up 47% of the labor force and their labor force participation has grown dramatically over the past few decades and will continue to do so.25

Talent-Based Workforce Segmentation26

Here, the focus is on categorizing employees into A, B, and C players based on the assumption that employees who add more value to the organization should be treated differently.27 The most talented employees who have the most significant impact on the organization’s business are categorized as A players (also known as high potentials). B players are talented employees who perform consistently and satisfactorily. C players are poor performers who are considered a liability; they are most likely to be separated from the organization. Using this approach, employees can also be categorized in terms of strategic/nonstrategic and core/noncore.28

An important challenge for the learning function is to manage, motivate, train, and develop each group differently.

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