FCCS News & Insights

Generational Changes in the Workplace and Succession

According to the Pew Research Center, in 2015 Millennials surpassed Generation X in the labor force, now numbering 53.5 million compared with Generation X’s 52.7 million and the Boomers’ 44.6 million. There’s been a lot of discussion over the past decade about what the generational differences mean for human capital plans and building strong cultures and successful businesses. The Farm Credit System and agricultural cooperatives, with their typical long-term tenure, are facing similar questions.

It’s been well-established that there are distinctions between the generations. As the Wall Street Journal reports, “Baby Boomers, born between 1946 and 1964, are competitive and think workers should pay their dues, workplace consultants say. Gen Xers, born between 1965 and 1977, are more likely to be skeptical and independent-minded. Gen Ys—also known as Millennials—were born in 1978 or later and like teamwork, feedback and technology.”

Jay Lux, Vice President of Organizational Effectiveness Consulting at FCC Services, offers more insight on the strengths each generation brings to the Farm Credit workforce. “Many factors impact the way different generations see things and how they work. For example, historically, lending practices have been very high relationship, high touch. Today, the use of technology and the related skill sets may be of greater importance.”

Chris Keller, Senior Vice President, Talent and Leadership Development, says that attendees at FCC Services’ Leadership Development Program primarily represent Generation X and older Millennials. “This group wants to play an increasingly strategic, involved and engaged role in their organizations,” says Chris. “They’re focused on understanding their own leadership role as well as ‘managing up’ to work better with senior management, which typically means being able to communicate effectively with the Boomer generation.”

Not only are workforces facing these generational distinctions, the customer base is also changing, so it’s critical that Farm Credit organizations have staff that represent their individual markets, and align relationship managers strategically with their customers. This may mean that more senior staff work with older customers, building the relationships that matter to them, and that less tenured staff work with younger customers, who may prefer texting to in-person meetings as a means of communication. Of course, these decisions shouldn’t be made without careful thought as generalizing about an individual’s strengths based simply on their age can limit both their potential and the organization’s strength.

“Individuals should be judged on their own merits, not with the broad brushstroke of their generation,” says Jay. “It’s also important to recognize that on some level, all employees regardless of generation want the same thing: to do work that they’re good at, accomplish their goals and be recognized for their achievements.”

Another facet to the generational issue is that a large number of Baby Boomers are growing close to retirement, and nowhere is this truer than in Farm Credit. 

“I can’t think of one Farm Credit organization that is not facing at least one executive-level retirement in the next few years,” says Jay.  

Filling the talent pipeline is critical to ensuring continued smooth business operation through planned and unplanned vacancies. Most often, this pipeline is filled with internal staff who know your operation, processes and culture. However, when the time comes to promote staff into higher positions, it leaves their former positions empty, so succession planning should focus beyond the executive level to build a true talent pipeline. Tied closely to this is the need for employee development plans so staff can gain the necessary skills to succeed in a higher level position.

“Every employee in our organization has a development plan, and we have a succession plan for every position,” says Dick Weathered, CEO of Western AgCredit. “It may be as simple as posting and hiring for the position, such as for our receptionist, or as complex as the CEO search we’ve now started with FCC Services.”

The complexity of what Farm Credit offers its customers and what agricultural cooperatives offer theirs makes succession planning even more critical.

“We’re in a knowledge-based business, so we succeed or fail on the quality of our people,” says Jay. “Staff is the single biggest cost, and thus the single biggest asset, so we need to make sure we understand our situation, identify where the gaps are, and create a plan to fill them.” 

Developing a succession plan is a fairly straightforward process: one position at a time, understand the skills that make someone successful in the particular job, determine if there are internal candidates who have or can develop these skills, create a development plan to fill in any gaps, and monitor how those skills are developing over time. 

Creating a comprehensive succession plan yields additional benefits as well:  it lets employees know that you’re focused on the future of the company as well as their own future careers. Ancillary development plans put them on the path to success. Combined with a respect for generational differences, you can achieve higher levels of engagement, more productive employees, a positive corporate culture, higher retention levels, and a stronger and more stable organization.