Here is an interesting effect of the workforce generational shift: According to PeopleManagement.com.uk, the HR consulting industry has shrunk by 20 per cent in the past year.

Part of this decline is an effect of reduced demand caused by the global economic recession, but there is also a generational factor at play according to recent research:

The report by specialists sourceforconsulting.com, which included a survey of the largest buyers of consultancy services, concluded that there is still significant demand for HR consulting but it was increasingly focused on elements that offer a measurable financial return. The majority of organisations in the study (84 per cent) had reduced their expenditure on consultants in the past year and half had reduced it by more than 20 per cent.

Consulting on organisational design and change management are in particular decline but performance management is a growth area, found the research, entitled What is the future for HR consulting?

Fiona Czerniawska, joint managing director of sourceforconsulting.com and author of the report, said the trend is leading to consolidation in the consulting sector.

“Our research points to a ‘generational shift’ in HR consulting, away from traditional areas to focusing more on performance management,” said Czerniawska. “The future of HR consulting will see traditional firms collaborating, even merging, with smaller, more innovative specialists in order to survive. The merger of Towers Perrin and Watson Wyatt and the recent acquisition by PricewaterhouseCoopers of performance management consulting firm Paragon is evidence of this evolving trend.”

In another generational twist, another report today asserts that job satisfaction in the U.S. is at its lowest level in two decades (read article here). Managers need to be aware of this trend as the economy begins to rebound, or they will be facing an even larger talent and knowledge gap than the one being caused by the shifting generational makeup of the workforce.

“While one in 10 Americans is now unemployed, their working compatriots of all ages and incomes continue to grow increasingly unhappy,” says Lynn Franco, director of the Consumer Research Center of The Conference Board. “Through both economic boom and bust during the past two decades, our job satisfaction numbers have shown a consistent downward trend.”
Fewer Americans are satisfied with all aspects of their employment, and no age or income group is immune. In fact, the youngest cohort of employees (those currently under age 25) expresses the highest level of dissatisfaction ever recorded by the survey for that age group.
“The downward trend in job satisfaction could spell trouble for the overall engagement of U.S. employees and ultimately employee productivity,” adds Franco.
“These numbers do not bode well given the multi-generational dynamics of the labor force,” says Linda Barrington, managing director, Human Capital, The Conference Board. “The newest federal statistics show that baby boomers will compose a quarter of the U.S. workforce in eight years, and since 1987 we’ve watched them increasingly losing faith in the workplace.” Twenty years ago, some 60 percent of that generation was satisfied with their jobs. Today, that figure is roughly 46 percent. Barrington adds: “The growing dissatisfaction across and between generations is important to address because it can directly impact the quality of multi-generational knowledge transfer–which is increasingly critical to effective workplace functioning.”

If you aren’t considering the effects of the generational shift on your organization, now is the time! Don’t be caught in a situation in which knowledge is lost, talent is not developed, and employee satisfaction and productivity are low! Businesses, now more than ever need to be focused on the generational issues at play in the economy and in their organization, and plan for the future by investing in talent development and knowledge transfer management. Although, as the first story indicates, businesses are increasingly cutting consulting budgets to save costs, this will not be a solid strategy for many organizations in the long term.

Technorati Tags: american job satisfaction, generational workforce satisfaction, HR consulting, workforce generational shift