War For Talent: Addressing the Generational Divide

War For Talent: Generational Divide

Nearly 40% of AP and AR practitioners tell IOFM they’ll leave their current organization by 2028. But depending upon the generational mix of your team, defections could be higher – and come sooner.

Those are some of the headlines of IOFM’s Best Teams to Work For Survey, which analyzed more than 400 AP and AR teams.

·         Baby Boomers (born between 1946 and 1964) – The most loyal generation, though many are approaching retirement age.

·         Generation X (born between 1965-1980) – Relatively loyal (half plan to stay with their current teams until they retire), accounting for more than half of the financial operations workforce.

·         Millennials (born between 1981 and 1996) – The least loyal generation (25% plan to defect within a year) will account for a larger share of the workforce as older workers retire.

Baby Boomers account for nearly 20% of the AP/AR workforce and two-thirds expect to retire in the next five years, including nearly 40% who expect to retire within three years.

Figure 1. Projected Attrition, Split by Generation

Source: IOFM’s Best Teams to Work For

Figure 2. When Do Baby Boomers Plan to Retire?

Source: IOFM’s Best Firms to Work For

The average AP/AR team is older than the broader US workforce. Just over half (53%) of financial operations professionals belong to Generation X, as compared to just over one-third of all US workers.

Figure 3. Share of Practitioners, Split by Generation

Source: IOFM’s Best Teams to Work For; US Labor Department

Figure 4. Share of Each Generation Who Plan to Stay With Their Current Team Until Retirement

Source: IOFM’s Best Teams to Work For; US Labor Department

The staff attrition issue isn’t just retiring baby boomers. The simultaneous challenge is that younger employees aren’t planning to remain with their team anywhere near as long as their baby-boomer peers.

Fewer than one-quarter of Millennials plan to remain with their team until they retire, meaning more than 75% expect to defect at some point during their career.

Compensation is the number one reason staff say they are likely to leave. The younger the employee, generally the less satisfied they are with their compensation. More than two-thirds of Millennials are “rarely” or “never” satisfied with their base salary. In comparison, only 21% of Baby Boomers hold such negative perceptions.

Figure 5. How Often Are You Satisfied with Your Compensation?

Source: IOFM’s Best Firms to Work For

Millennials also place a high premium on work/life balance. Two-thirds of Millennials say they would prefer to work from home at least three days per week; just over half of Baby Boomers hold such a preference.

Figure 6. Generational Preference Over Working from Home At Least Three Days Per Week

Source: IOFM’s Best Firms to Work For

In the end, voluntary staff attrition within AP/AR teams is on the rise and shows no sign of letting up. But understanding each generation can help you recruit/retain top talent.