Leadership Update: Team volatility; the impact of intergenerational divergence.

Executive Summary

The instability that individuals may experience in their professional lives is often influenced by economic uncertainty, technological disruption, and rapid changes in the job market. Millennials (born between 1981 and 1996) and Generation Z (born between 1997 and 2012) are particularly affected by these challenges and may require unique strategies for engagement, inspiration, and retention.

How can leaders engage, inspire, and retain Millennials and Gen-Z? Adopting workplace practices that align with the following steps is critical to achieving levels of stability within the tax function:

Understanding - Acknowledge Diversity | Address Communication Preferences

Engaging – Purpose-Driven Work | Flexible Working Arrangements

Inspiring – Continuous Learning | Mentorship Programmes

Evaluation & Iteration – Collect Feedback | Iterative Approach

Retaining – Recognition & Feedback | Workplace Wellbeing

By proactively addressing the concerns and preferences of Millennials and Gen-Z, Tax leaders can create a more resilient and engaged workforce, fostering a positive organisational culture that transcends generational differences.

Shifting Dynamics

A significant cultural and behavioural shift is evident among Millennials (born 1981-1996) and Gen Z (born 1997-2012) populations, who have observed and absorbed lessons from the business approaches of the Baby Boomers (born 1946-1964) and Gen X (born 1965-1980) generations. A notable distinction lies in the latter's inclination to endure challenges silently and persevere through difficulties. At the same time, Millennials and Gen Zers are more inclined to take proactive measures, including opting for change when discontent arises, contributing to a workforce characterised by increased volatility. Given that Millennials and Gen Zers constitute the largest segment of the workforce, the scale of this challenge becomes particularly noteworthy.?

Left unaddressed, the divergence among generations poses a tangible threat at a point in time where fostering stability and loyalty is crucial within organisations. This introduces tension when the tax function is focused on supporting the business. Consequently, leaders must confront this challenge by creating a collaborative environment.

If achieved, the diversity stemming from generational differences unleashes fresh perspectives and creativity. When harnessed effectively, this diversity challenges established norms, helping to propel organisations forward.

Tackling intergenerational disparities

Addressing the differences in attitudes between generations is critical in working towards a solution. Whilst challenging to confront, these differences must be discussed. With a comprehensive understanding, these differences offer an opportunity to unite an organisation based on attitudes and around shared principles, behaviours and outcomes.

Leaders must genuinely engage and understand the various stresses and anxieties to leverage the diversity stemming from generational differences. By doing so, they can foster a collective commitment to achieving the objectives of the tax function, centred on creativity and collaboration across the generational spectrum. Mentoring programmes and workshops play a crucial role in this process.

Progressions in intergenerational differences

An increased focus on ESG – the importance of ESG for Millennials stems from their values, commitment to social and environmental causes, and the desire for responsible and ethical practices in both the workplace and the broader business landscape.

DEI recognition - Identification of the crucial role of effective Diversity, Equity, and Inclusion (DEI) initiatives, particularly equality, diverse backgrounds and experiences and the investment in advancing underrepresented groups.

Workplace culture - Highlighting the significance of inclusivity and adopting flexible and hybrid work arrangements.

A primary concern for tax leaders is the fragility of the workforce, particularly regarding their capacity to effectively engage, inspire, and retain individuals from the Millennial and Gen-Z generations. Opting for a more profound connection and aligning goals opens the door to intergenerational unity. By embracing and ingraining this inclusive approach, a resilient and interconnected culture evolves, which, in turn, has a positive impact on employee retention.

Resolving the misalignment between generations.

Prioritising the consolidation of the tax function, evaluating the current state, and challenging existing norms aim to create a unified leadership approach capable of guiding and inspiring across generations. A genuine self-assessment of the tax team is essential when creating an appropriate engagement strategy, allowing tax officers to lead confidently in an intergenerational context. Tax leaders must highlight and understand the underlying issues, allowing for constructive discussions and, ultimately, a more cohesive function.

*EY Survey: Addressing generational preferences in the workplace