This document summarizes a study conducted by Hay Group on managing employees across generations in an Indonesian financial services company. The study found that: 1) Employees of different generations have different motivations, with benefits being very important for all generations; 2) Reasons for joining a company are different than reasons for leaving, with competitive pay being important for both; 3) Tapping baby boomers' willingness to mentor younger employees can help retain institutional knowledge. Managing a multi-generational workforce requires understanding each generation's needs and tailoring programs accordingly.

1. 1
Managing
across generations in
Indonesia
What does it take to lead Indonesia’s inter-generational tribes
Feb 2013 towards 2020?
Introduction
By 2020, Indonesia will have the third fastest-growing In this paper, we will discuss the above questions,
workforce in the world. Our population will stand at examine some of the ground work that needs to be
262 million; 60% of whom will be living in cities. As done now, using a Hay Group client as an
such, the workplace in Indonesia is facing a illustration. The company is a premier financial
generational adjustment of values, learning and services firm in Indonesia with over 400 employees.
working styles that will have a huge impact on how
leaders think and act.
Acknowledging that they are primarily a knowledge-
based company where employees are a key driver
In preparation for this seismic shift, what can com- of growth, the company conducts annual employee
panies in Indonesia do to ensure continued growth? engagement surveys. Its 2012 results had highlighted
What are the gaps between employee expectations the inter-generational needs of its workforce, thus
and our HR tools? How can these gaps be bridged? making them re-think the current HR tools for
motivation and retention.
©2013 Hay Group. All rights reserved www.haygroup.com/id

2. Managing across generations in Indonesia
One size doesn’t fit all
Take a look around any organization in Indonesia today. Just
simmering below the calm surface, there is a serious new challenge.
And it has nothing to do with the current economic boom, intense
competition, or clueless bosses.
Instead, it is the problem of distinct generations — the Baby
Boomers, Generation X and Generation Y — working together and
often colliding as their paths cross.
The situation is no different at one of Employees also are attracted to the
Indonesia’s financial services company. chance to learn new skills, work-life
Their employee engagement survey balance and competitive pay as key
threw up two interesting top-level attraction factors.
insights:
These attraction factors did not happen
ƒƒ The five-year mark seems to be a by accident. Their Head of Human
tipping point. Employees who have Resources commented that, “not only
served less than five years felt less have we invested in building talent,
engaged compared to their career and performance management
colleagues who had served for more systems, we also invested in
than five years. communicating our employer brand
ƒƒ Employees who were younger than 45 to the candidate pool. This means that
years old felt less engaged than those consistently for the past ten years, we
who were over 45 years old. have had our first choice of candidates.”
Hay Group was then commissioned to Why employees stay
conduct an in-depth survey to ascertain When it comes to employee
Understanding the the attraction, motivation and retention
generations retention, there is certainly more
factors of the company’s workforce. This diversity of reasons. However, for all
Baby Boomer : 1940s – 1959 provided useful action steps to help three generations, the pay must be
(50 ~ 69 years old) them fight the talent war in Indonesia, competitive so that they can keep up
Generation X : 1960s – 1979 which rages fiercely in Indonesia’s with their peers (Figure 2).
(30 ~ 49 years old) financial services sector.
Generation Y : after 1980s For Baby Boomers, accessibility to
(up to 29 years old) Why employees join company leaders and opportunity to
When it comes to attracting employees, mentor the younger generation are
the company’s sterling corporate within the top three reasons for staying
reputation and employer brand stands on. Inspired by these findings, the
it in good stead (Figure 1). All company is exploring the possibility
employees surveyed listed the of tapping this desire to mentor with a
company’s reputation as either the first system that co-opts the Baby Boomers
or second reason that enticed them to in the development of the next
join and its brand as an employer of generation.
choice as the fifth reason.
©2013 Hay Group. All rights reserved

3. 3
Figure 1: Why employees joined the company
Baby Boomers Generation X Generation Y
Opportunity to learn new
Company reputation Company reputation
skills
International Opportunity to learn new
Company reputation
assignments skills
Competitive pay Competitive pay Competitive pay
Opportunity to learn new
Work-life balance Work-life balance
skills
Employer branding Employer branding Employer branding
Figure 2: Why employees stay with the company
Baby Boomers Generation X Generation Y
Opportunity to learn new Opportunity to learn new
Competitive pay
skills skills
Leadership accessibility Competitive pay Competitive pay
Mentoring programs Retention bonus Work-life balance
Accelerated career
International
Long-term incentives development
assignments
opportunities
Opportunities to learn
Leadership accessibility Retention bonus
new skills
Leadership accessibility is also competitive to the market to ensure it is
important to Generation X, but not able not only to attract, but to retain the
mentioned at all by Generation Y. This is best talent.
not surprising as the older group of
employees want to work in
As for Generation Y, what is crucial is
organizations where their contribution
their career development path – it has
is valued and recognized by top
to be clear and it has to be accelerated.
management.
So while money is important to them,
Interestingly enough, three out of the learning and career opportunities and
top five reasons why Generation X stay work-life balance are also important to
on at the company have to do with them. In other words, if a competitor
reward: competitive pay, retention were to offer more career opportunities
bonus and long-term incentive. Over without significantly more pay, chances
the past few years, the company has are, they will go.
adopted a policy of making itself
www.haygroup.com/id

4. Managing across generations in Indonesia
What motivates employees
When it comes to motivation, the Interestingly, as with their peers around
generation split between Baby the world, the Generation Y here are
Boomers and the other employees are also motivated by appreciation and
in stark contrast (Figure 3). For Baby recognition, which must be quick and
Boomers, cash reward, company culture, instantaneous. Year-end performance
benefits and company focus are reviews and annual bonuses have less
important motivation factors. motivating power with this generation.
Instead what seems to work better are
on-the-spot praise and more frequent
In contrast, Generation X and Y are appraisals and reward.
motivated by development
opportunities, job fulfillment and
benefits. For Generation X, the integrity Indeed this is what the company
of the company also counts as a practices. “Managers are given the
motivation factor, as they believe that discretion to present coffee and meal
they are not only serving their direct vouchers to reward exceptional
clients but Indonesia’s national interest performance in team meetings. This
as well. type of on-the-spot recognition is much
appreciated by all employees,” says the
company’s Head of Human Resources.
Figure 3: What motivated employees at the company
Baby Boomers Generation X Generation Y
Development Development
Cash reward
opportunities opportunities
Fulfilling & challenging
Company culture Benefits provided
job
Mentoring programs Retention bonus Work-life balance
Opportunities for
Company focus Company integrity
advancement
Fulfilling & challenging Appreciation &
job recognition
©2013 Hay Group. All rights reserved

5. 5
www.haygroup.com/id

6. Managing across generations in Indonesia
Figure 4: Why employees leave the company
Baby Boomers Generation X Generation Y
Limited growth Limited growth
External inequity of
opportunities within the opportunities within the
compensation
organization organization
Lack of career Lack of career Lack of career
development programme development programme development programme
External inequity of
Performance assessments Lack of recognition
compensation
External inequity of
Under-utilisation of skills Lack of recognition
compensation
Limited growth
The way people are Internal inequity of
opportunities within the
managed compensation
organization
Why employees leave
When it comes to reasons for leaving, leaving based on perception – a
there is a corollary to why employees perception that they are not
joined in the first place (Figure 4). All appreciated, not fairly treated in terms
three generations cite external inequity of pay, and not fully valued. This usually
of pay, limited growth and career boils down to how their managers treat
opportunities. them.
Interestingly Generation Y stated Whether these perceptions are accurate
“internal inequity of compensation”, or not is immaterial. Like it or not, the
whether real or hearsay as a reason for perception is reality that the employees
leaving. As with many companies in the experience and they will act based on
talent-scarce financial services that experience.
sector, this company has seen its pay
bands being “stretched elastically.” Hence, the successful retention of
employees is contingent on the
Baby Boomers leave because they feel leadership and management skills of
that their skills are under-utilized. For their direct supervisors.
Generation X, their direct manager
could also be a reason for leaving. Both This begs the question, how are our
Generation X and Y also cite a lack of managers being trained and enabled
recognition for their efforts. to retain their employees? Do we know
whether our line managers are
This is a prime example of the familiar creating high-performance or
saying, “people join brands but leave demotivating climates?
bosses.” In this case, their reasons for
©2013 Hay Group. All rights reserved

7. 7
Managing multiple generations
The company’s employee survey sheds ƒƒ Not only must there be a Career
some very interesting insights on Management System, there must be
managing employees in Indonesia. clear communications to employees
about the objectives, measurements,
ƒƒ Benefits are a very important motivat- and expectations from them.
ing factor for all three generations. ƒƒ Awards and recognition, be it a
This is a phenomenon seldom report- certificate of appreciation or a
ed in other countries and seems to be restaurant voucher, needs to be
a peculiarity of the Indonesian market. instantaneous and consistently
ƒƒ The reasons employees join you delivered across the organization.
are usually not the same reason for ƒƒ Engage employees in discussions
their leaving. With the exception of about their career aspirations and
competitive pay, employees join a development needs – today’s younger
company because they are attracted generation want an active hand in
to the employer brand or corporate planning their future rather than
reputation. However, once they are being passive recipients of
onboard, competitive pay becomes a management’s will.
hygiene factor. ƒƒ The leadership skills of managers and
ƒƒ The experience of our older the climate they generate are of
generation is a valuable resource. paramount importance in motivating
Tap on their willingness to share and and retaining employees.
mentor their younger colleagues and
we will be assured that institutional
knowledge is kept within our
companies.
www.haygroup.com/id

8. Managing across generations in Indonesia
From this study, it is obvious that there Hence, I encourage you to conduct such
is a no “one-size fits all” approach for surveys, if you haven’t already. If you
managing a cross-generational work- already have, then cut your data by
force. Each generation comes with its generations and see if there are any
own set of values, needs, attitudes and significant trends. In this way, you will
expectations of job requirements. not be caught unaware of the shifting
mood.
The key lies in knowing what each
group wants and tailoring our To be ready to cope means getting
management and reward systems in a people on the same plane of how to
fair and equitable way. Age differences interact and collaborate;
can create an insurmountable challenge encouraging and rewarding people
if they take us by surprise. who help to build networks and
relationships. These important
behaviours should be the responsibility
So let us not assume that we know what
of all managers and is certainly not just
motivates the different tribes within our
HR’s responsibility alone. Only through
workforce. The point of inflexion will be
a concerted organizational effort can
here soon for all companies in
the generational gap be bridged.
Indonesia; in fact for some, they are
already in the throes of a generational
shift.
Contact
Nidthia Chelvam, Managing Consultant for Hay Group
Indonesia, helps companies and family businesses to
About Hay Group
transform their business strategies into results. He also has Hay Group is a global management
extensive line and operational management consulting firm that works with leaders
experience with global companies across three continents. to transform strategy into reality and to
help people and organizations realize their
potential. Visit www.haygroup.com/id.
e| Nidthia.Chelvam@haygroup.com
The content in this report is provided solely for informational purposes. This report does not establish any client, advisory, fiduciary or professional relationship between Hay Group and you.
Neither Hay Group nor any other person is, in connection with this report, engaged in rendering accounting, advisory, auditing, consulting, legal, tax or other professional services or advice.
©2013 Hay Group. All rights reserved