Baby boomers are making up less of the Canadian workforce than they used to and to some surprise, it is the Gen Ys who are benefiting more than the so called “quiet majority” of Gen X workers.

That’s the finding of a new PwC report prepared for the banking industry.

Says the report, “With older workers staying on longer — many in senior positions — and younger employees with a hunger for advancement coming up from below, the potential for disaffection in the Generation X ranks is significant.”

“The findings show that promotion rates for Gen Ys have held steady at close to 20% over a three year period, while Boomers’ promotion rates fell from 5% to 3%. What was not expected, however, is that Gen X promotions rates would fall from over 11% to less than 10% over the same three years studied (2008-2010) during what should be peak years of upward mobility,” says Dr. Philip Hunter, a director in PwC’s People and Change practice.

Boomers refer to those born from 1943-1960, Gen X from 1961-1981 and Gen Y’s from 1982-2000.

Hunter believes that Gen Xers are perhaps being “squeezed” by older workers delaying retirement, and younger, more aggressive Gen Ys intent on rising through the ranks quickly. “Other contributing factors may include changes to operating models that favour relationship skills rather than management expertise, and career paths characterized by more stringent promotion criteria at more senior levels, which would disproportionately impact Gen Xers,” he says.

“Banks and other industries with multi-generational workforces have to be taking a different approach in thinking about career progression, the formal promotions process and changes to their operating model,” says Karen Forward, a director in PwC’s Financial Services People and Change practice.

Between 2006 and 2010, the ratio of Baby Boomers to Gen Y employees at Canadian banks shrunk from 6:1 to less than 2:1. At this rate, Gen Y will outnumber the boomer generation in Canadian banks within the next three to five years. At the same time, Gen X is by far the largest generational employee group for Canadian banks, comprising a “quiet majority” of between 55% and 60% of the total workforce.

“Banks need to be asking questions such as, ‘how does each generation contribute to our organization across our lines of services and corporate functions?’ and ‘are we helping the different generations to work together?'” says Forward. “Banks will need to look at collaboration tools, skill transfer programs and address the Gen X “squeeze” to keep these key employees engaged,” she says.

PwC’s study of workforce composition and performance in the Canadian banking sector included a review of data submitted for calendar years 2006 to 2010. The sample over the time period included large and medium-sized Canadian banks, including the “Big Five.”