The Business of Ageing: implications of an older workforce
The world’s workforce is ageing. In America, for example, it’s projected that one-third of the nation’s workers will be age 50 or older by 2016. And right now in the UK, 29% of employers are already seeing a rise in the average age of their workers. The fact is that in most developed nations across the globe, this ongoing trend will have a large and lasting impact on businesses of all shapes and sizes.
Nevertheless, there are indications that management and HR have been slow to implement policies and procedures to effectively address this growing population of older workers. To provide some motivation in this area, what follows is a look at some of the major implications of an older workforce that companies will need to consider going forward.
The Loss of Knowledge and Experience
As the working population ages, employees will be leaving the workforce in droves. This mass exodus will create a huge pool of jobs that will need to be filled. In addition, many of the positive traits attributed to older generations, such as a positive work ethic and being more people-oriented, may go by the wayside unless companies can find ways to retain older workers longer so they can pass on their knowledge and expertise to younger workers. Failure to do so could result in the loss of information and proprietary knowledge that are essential for a company’s survival, let alone long term growth and success.
Generational Job Change Patterns
Along with the potential loss of knowledge and expertise, another critical factor that companies must consider is the variance in job change patterns between older and younger generations. Generational survey data shows that, while Baby Boomers (46-64 years-old) will typically have 4-6 jobs during their lifetimes, Generation X (30-45 years-old) will have 10 to 12 jobs, while members of Generation Y (15-29 years-old) will most likely change jobs every one or two years. Being that the costs of filling job vacancies for employers can be considerable, depending on the annual salary and skill requirements of the open position, companies can expect to see their profits shrink significantly as turnover rates increase. To offset these projected losses, companies will need to offer new incentives---such as workplace flexibility---to recruit and retain talent from younger generations, while at the same time retaining senior employees to mentor them.
Generational Differences in Worker Attitudes and Values
As more and more senior workers retire, companies must come to terms with the different perceptions and expectations of work held by each generation in the workforce. While the desire for more leisure time cuts across all generations of workers, generational surveys indicate clear differences in attitudes and work values. For example, while an older generation of workers sought jobs that were personally fulfilling and socially meaningful, younger workers---caught in the wake of corporate downsizing brought on by a prolonged recession---view their jobs primarily as a means to make a living, placing little value on the ideals of teamwork and corporate loyalty that were so important to their older predecessors. In addition, along with viewing work as being more peripheral to their lives, members of Gen Y expect to achieve faster and feel more entitled to larger salaries and positions of higher status---regardless of their experience---than either Gen Xers or Baby Boomers. Being that companies will need to recruit a growing number of younger workers as more senior employees retire, adapting the work environment to accommodate these more casual attitudes toward work without jeopardizing performance will present a formidable challenge.
As the world’s workforce continues to age, management and HR need to address and embrace this major shift in the workplace demographic. Those companies that take pro-active steps to adapt to this new dynamic will enjoy the competitive advantage that will surely come from having four distinctly unique generational groups working together.