The talent pool of working-age people is shrinking but that’s not necessarily a bad thing.
Greater longevity and better health are allowing us to stay longer in the workforce. Recognizing that the ageing workforce is equipped with a variety of unique skills and strengths, many organizations believe that the growing ageing workforce can help bridge the talent gap created by the shortage of critical skills.
With that, it is high time that businesses reconsider the role and potential of the growing silver workforce.
However, businesses have been slow to respond to the challenges presented by an ageing workforce. Surveys by the Society of Human Resources Management (SHRM) indicate that the majority of organizations haven’t made plans to recruit or retain veteran employees. Human resources departments are grappling with strategies to compete in the war for talent and address workforce issues such as a diminishing talent pool, conflicts of the intergenerational workers and the knowledge base that will disappear when the baby boomers retire.
Addressing these challenges strategically will be critical for business success in the coming years.
Key challenges posed by a maturing workforce include:
- Brain drain: Invaluable knowledge will walk out of the door as older workers retire. While millennials are close to making up half of the workforce and their role in decision-making is ever increasing, they do not yet have the deep wisdom of older workers who have decades of life and work experience to inform their decisions.
- War for talent: A smaller pool of working age employees will intensify competition for talent and create skills shortages. Many of the jobs that are hardest to fill require extensive experience, like general management positions for example, and those can be adequately filled by a young workforce.
- Intergenerational integration: Millennials, Generation X and Baby Boomers. There are employers today catering for an employee population varying from 18 to 80 years of age and the different experiences and outlooks can give rise to interpersonal conflicts at work. Many organizations are struggling to successfully integrate age groups as much as 50 years apart. To do so requires a shift in the workplace culture that will harness knowledge and experience across the generational divide.
The good news is that there is a huge cohort of individuals that are approaching retirement but want or need to continue in the workforce. The talent gap will create new opportunities for workers near retirement age to extend their careers.
Roger Locy, is cresting 70 this year and has worked in nuclear power since 1966. He says the main difference between entry-level and senior nuclear operators such as himself is one knows how and the other knows why—an important distinction when a complex crisis like Fukushima arises. In other words, it’s imperative the industry has veterans like Locy around to call on in case of emergency. This significant segment of the energy sector is expected to be hit especially hard over the next few years as the Nuclear Energy Institute in the US estimates nearly 40 percent of its workforce will be eligible for retirement by 2018, creating an immediate need for roughly 20,000 skilled labourers.
Just a few months after Locy retired in 2006, a plant came calling. Locy returned as a contractor, which afforded him a flexible three-day schedule and the mental freedom to leave his work at work. “We have new guys who are smart, but they just don’t have the experience,” Locy says. “Having someone around they can ask questions is a big benefit.”
Even when organizations have the foresight to recognize the crisis that the looming loss of experience is likely to create over the next decade, there is still another obstacle to be overtaken: ageism. Age discrimination persists though the senior workers are not necessarily less healthy, less educated, less skillful or productive than their younger counterparts.
Some organizations are figuring out ways to accentuate the talents of senior workers:
- In Singapore, Maybank employs more than 250 staff who are over 50 and about 50 staff who are aged 62 and above. Wong Keng Fye, head of human resources at Maybank, believes in the saying of old is gold citing the example of a senior banker: “He knows the ground, the way to do business, customer behaviors and how to sustain and enhance relationships with customers.” As Singapore continues to compete in the global marketplace, we need to ensure that our workforce remains competitive despite a greying population. One way to achieve this is to tap on the growing pool of experienced and skilled mature employees.
- McDonand’s in the UK employs over 110,000 people ranging from 16-year-olds in their first jobs to those in their 80s and 90s working a couple of shifts a week. In a recent employee survey, McDonalds found that half of the employees worked next to a colleague aged 60 or older. According to Claire Hall, chief people officer at McDonald’s UK, the survey also discovered that restaurants with a “diverse age range of people working a shift together, employees are up to 10% happier in their jobs and have a more positive outlook towards McDonald’s role in their developmental and career growth needs, as well as their overall well-being.”
- In Australia, hardware giant, Bunnings, has recruited approximately 2,000 “team members”, aged over 55 in the past five years, positioning the business as one of the biggest employers of older workers in the country. Bunnings is tapping on the “large number of highly skilled tradespeople who were unable to continue in physically demanding jobs” but that could bring their expertise to back to the market and offering “a lifetime of experience to shoppers”. John Gillam, Bunning’s managing director said that “[older workers] have patience and a depth of knowledge, and they love teaching the younger workers. The older workers generally command more respect.”
So, how can organizations address the challenges of an older workforce?
- Build a bridge between generations: All employees want to do well and contribute to the greater good of the organization. In a multigenerational workforce, conflict is real but normally steams from unchecked bias and ill-informed perspectives. By improving collaboration and communication you can help clear perceptions and mitigate conflicts between the multigenerational groups. You can do this by creating opportunities for employees of different ages to work together in certain projects, listening to employees via formal surveys and informal chats, training managers on how to adjust their leadership and communication styles to their target audience.
- Recognize the experience of older workers: Everyone wants their expertise to be recognized and with older workers it’s even more important, because they typically have the experience of a lifetime and ignoring it can be demeaning. Further, over time, the lack of respect and recognition by leaders of the collective wisdom of their older workers can lead them feeling disengaged and uncommitted. You can refer to the SMART strategies that I’ve written previously to rejuvenate engagement.
- Plan and train for the future: Identify the skills that will be most needed in your organization and create new roles and career pathways for mature workers to fill these roles. Provide support and training for older employees to transition into new positions.
- Ensure non-discriminatory recruitment practices: Having policies that encourage diversity and inclusion in the workforce will help attract mature workers. Review your recruitment processes to ensure that jobs, promotion and training opportunities are available and accessible to all, including older people.
Each generation offers its unique perspectives to the workplace but the experience, knowledge and the emotional intelligence that comes with age adds a layer of wisdom and a depth of skill that can only be gained over time. Organizations that can combine the accrued expertise of mature workers with the dynamism of younger employees will create a more harmonious workplace and tap into a rich pool of intellectual property, skills and talent that will ensure future productivity.
For more insights on how to motivate and reward employees of all generations, check the recording of our recent webinar: The future of employee motivation and retention