Surveys show that fewer and fewer young people are making it to the executive floor because high salaries alone are no longer enough of an incentive.
There is a common prejudice that generations Y and Z are too lazy to take on responsibility. In fact, surveys show that being a boss is not something that people under 30 long for. But that conclusion is too simplistic, explains Myriam Bechtoldt, Professor of Leadership at the European Business School in Oestrich-Winkel. The younger generations have often seen from their parents what constant overwork and high levels of responsibility can do, and do not want to repeat this kind of vicious circle.
Instead, good working conditions are not only a priority, but for many also a requirement for the employer: “Many young people are more interested in work-life balance, self-realization and sustainable working conditions than in high salaries and status.”
Generational differences? No response
A healthy working atmosphere, an exciting working environment and development opportunities were also important for older generations. The difference is that young people today have the upper hand due to the shortage of skilled workers. “Perhaps previous generations would have liked to achieve exactly what young people wanted. But they did not have the clout in the job market that young generations have today.”
Flexible working hours, home office options and additional benefits such as company bicycles or private smartphones are common as an incentive for young employees. However, it is much more important that companies can convey a clear vision and sense of purpose in order to show potential new employees what they are working for and what contribution they are making, especially in responsible roles.
injustice as a deterrent factor
One issue that she comes across again and again is the question of justice. For young people, it can be almost a deterrent to pursue a career in a company if the salary differences between employees and the management are large. “If the CEO earns 180 times as much as the average employee in the company (…), then that simply triggers a feeling of massive injustice.”
Companies must ensure that salary structures are perceived as fair in order to maintain the motivation and loyalty of their employees. High salaries have lost their traditional appeal. Money is important but today it is only a necessary criterion, explains Bechtoldt.
Success and Willingness to take risks are honored
And: Those who earn a lot often have to justify themselves. The latest figures from a study by the German Association for the Protection of Securities Ownership (DSW) show that the salaries of top executives in Germany are rising. According to Gerhard Minnameier, business ethicist at Goethe University Frankfurt, the debate about fair salaries is a recurring one. It is not necessarily about envy: “It is more a question of justice. Many people see a problem in the fact that the income differences are so great. This leads to a feeling of injustice.”
Minnameier compares salaries for managers with the approach in professional football. In order to get the best talent, you have to offer large sums. Ultimately, it would be worth it if a manager could move the company forward. And the risk is also high. “Managers have a lot of responsibility and are at great risk of losing their position if they do not meet expectations.”
The discussion about fair wages for top executives is particularly strong in Germany. Large salary differences are traditionally viewed more critically here than in the USA, for example: “In the USA, high managerial salaries are linked to high employee incomes and a flourishing economy. This is seen as justified there, whereas in Germany a zero-sum mentality often prevails.”
Soon there will be a shortage of 190,000 managers
The consequences of being afraid of the executive floor are already having an impact. The Institute for Small and Medium-Sized Business Research predicts that by 2026, around 190,000 companies will be looking for a successor in management. Applications are in high demand.
