How will generational change impact business behaviour?

Millennials became the largest generation represented in the US workforce in 2015, and in 2020 were estimated to make up half of the UK workforce [PDF]. The ‘potential’ of this group of largely digital natives has been discussed for over a decade now, but these relatively small milestones signal the beginnings of a generational shift. Millennials are now decision-makers in just over one in three businesses and, as this trend continues, we will see more businesses changing the way they behave when it comes to digital.

This change will be seen in several ways, a significant one being social and environmental issues. What Gartner calls a ‘voice of society’ metric will become more common in the next few years. Nearly a third of businesses are expected to measure their action on social issues and assess the impact on performance. Black Rock and Lloyds are two examples of big companies already pledging change on that front. But the real impact will be seen by taking a digital-first approach to global environmental efforts.

Younger generations not only have a greater desire to tackle climate change – 71 per cent say it’s more important than their own standard of living – but their digital outlook will also drive the need for better ‘basics’. A lot of climate data is estimated, for example. It’s not misleading, but it uses general factors to estimate the scale of the problem, whereas more precise information would help tackle the problem more effectively. For example, car emission measurements can use factory estimates or sensors on exhausts. The latter allows for the way that every driver behaves differently.

Building the whole picture through data helps to discover the most effective solutions, but governments cannot mandate this level of data capture. Companies must be willing to integrate technology more naturally into their products, which is more likely with a generation of leaders who are inherently digitally native. Understanding technology is not what defines someone as a digital native, but their approach to using it in day-to-day life does.

Digital natives also want to do more than ‘the basics’ when it comes to software. Their predecessors in business often saw software as a necessity, which is why products continue to define software. A generational shift is likely to see businesses more open to using technology in different ways, perhaps not even the ways that it was initially designed for. A consideration of practical applications will be the outcome.

Retirement too will change how workforces interact with technology. As key workers retire, there’s a risk that coding languages will die out because nobody uses them anymore; specialist machinery risks going unmaintained and grinding to a halt. Three-quarters of finance directors, for example, believe the skills gap created by retiring baby boomers will negatively impact their business within the next two to five years.

But it’s not too late to keep that knowledge in the workforce. Employees passing on knowledge to the next generation, whether it’s to other people or into a computer, will help make a business resilient against the ‘disruption’ of retirement. But it’s not always easy to find the right person or to have them in the same location to learn from the current experts. That situation can be complicated further if the skills relate to hazardous environments where training – or even multiple engineers on-site – isn’t practical.

Augmented-reality training enabled by IoT could help in some instances. Think about engineers sitting in front of their task, wearing a Hololens, with an experienced engineer in their ear, potentially on the other side of the world. A young engineer can complete the task, confident in the outcome because of the experienced engineer overseeing them.

Handovers are harder for skills like programming languages or process-specific knowledge, meaning a different kind of technology is needed. There are many possible approaches here. One is for engineers to train an AI to re-apply some aspects of their knowledge, for instance finding errors in lines of code. Another option is for Robotic Process Discovery to get a snapshot of processes and to feed it into training systems as well as process management platforms to monitor success. However these skills are transferred, they point to a future where technology is an integral part of day-to-day work life in a way that hasn’t been seen before.

Nobody can say with absolute certainty what the future has in store. But as the growth of the Millennial generation continues, the driving factors behind action will evolve and we’ll see companies deploy and embrace technology to solve problems in new ways.

Education is already helping younger generations. Microsoft’s ‘Get On’ campaign will help 1.5 million people in the UK build careers in technology by 2025. Meanwhile in France, the Aivancity School for Technology, Business and Society has opened to help develop skills such as AI. These are just two examples of initiatives helping to overcome the world’s well-documented skills gap and prepare the future workforce. Education and career planning will ultimately be key for businesses to consider in the future, and we can expect digital natives to support these initiatives more vociferously in the years to come.

Dr Stefan Sigg is CPO at Software AG.