Managing Generational Diversity: Lessons German Companies Can Learn From Silicon Valley

Managing Generational Diversity: Lessons German Companies Can Learn From Silicon Valley

Martin Klaffke
Copyright: © 2020 |Pages: 15
DOI: 10.4018/978-1-7998-3583-7.ch008
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Germany is undergoing a dramatic demographic change that requires its organizations to make workforce talent of all ages a strategic priority. Practitioners in Germany focus largely on Generation Y employees, because this young employee cohort expresses new and different work-related values. However, diverse attitudes and behaviors of employees in different age groups can potentially lead to conflict and have an overall negative impact on organizational performance. Given US labor legislation and media pressure, managing workforce diversity has been on the agenda of U.S. organizations for many years. Consequently, it can be assumed that there are areas in which German organizations can learn best practices from the U.S. experience. Although data collected from Silicon Valley organizations suggest that taking specific action for managing the multi-generational workforce is currently not a pressing issue in the tech industry, setting up innovative workplaces is an action field in which Germany can learn from its U.S. counterparts.
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Research Background

More than any other OECD nation, Germany’s economy is approaching a demographic shock of a scale not observed since the Middle Ages. By 2030 the German working-age population is expected to decline by 6 m, already skewing sharply older in the coming decade (Robert Bosch Foundation 2013). Due to talent shortage, more than half of Germany’s small and medium sized enterprises are expecting a decline in prosperity and growth (Ernst & Young 2013).

To safeguard the employment provision, and thus further ensure Germany’s prosperity there are two basic options: a) increase the volume of work performed and b) improve workforce productivity. As immigration has yet been unable to compensate for the loss in labour force, some important reforms have already been put in place to lengthen one’s working lifespan. School and academic education were shortened, pension was postponed to the age of 67 and retirement pay was cut thus incentivizing employees to work until the statutory retirement age. Given the implemented changes in both exit age and education system, collaboration time of employees of different age with connected divergent values will increase by roughly 10 years.

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