How Aging Workers Can Contribute to the Success of Your Organization
Your aging workforce comes with institutional knowledge and life experience specific to your business, so why not protect that from the clutches of competitors and seek to partner with them on their transition to retirement?
We know that the working population is aging. Here are just a few of the statistics:
Does this matter? Can’t we just get younger labor elsewhere? Yes and no.
Yes, you can hire younger workers and using the power of technology you may not even have to relocate them. However, what knowledge, insight and experience will they bring to your business that is unique to your organization? If they are freelancers, they may also be using their skills to improve the capabilities of your competitors rather than building you a competitive advantage.
The aging workforce needs companies. And companies need them.
Aging workers come with institutional knowledge and life experience specific to your business, so why not protect that from the clutches of competitors and seek to partner with them on their transition to retirement?
In developed nations—where there is opportunity to harness the capabilities of the more mature workers— there is a rising recognition that there simply isn’t a sufficient pool of younger workers to take the place of those retiring. Improved life expectancy adds to the challenge, as people need to fund their lifestyles for more years. Also, many soon-to-be retirees are asset rich but cash poor due to the global financial crises. Their retirement accounts are lower than planned and they may need to continue working to generate liquid funds.
Which aging workers are most valuable?
ManpowerGroup has researched the impact of global talent shortages for a decade and this infographic provides a clear overview of the jobs that companies are finding most difficult to fill
. Skilled trades workers, sales representatives, engineers and technicians occupy the top four spots. It is common for more mature workers to be employed in these roles, and anecdotal evidence suggests a number of these employees find the manual requirements of their roles challenging, but the financial imperative to keep working drives them to continue in full-time employment.
What companies can do
The organization for Economic Co-operation and Development (OECD) has called for a comprehensive strategy to address aging workers with the goal of retaining them in gainful employment. According to the OECD, this strategy needs to include:
Better incentives to remain in work longer
Reduced incentives to retire early
Improved information about retirement entitlements
Reviews of assessment for disability entitlements
Changes to job search assistance
Surveys of job satisfaction and the work environment
Improved government co-ordination across portfolio areas
Some these issues are the purview of companies, but governments globally also have a role to play. The most common company initiatives include:
Phased retirement/mentoring schemes
Increased proactivity around retirement intentions
Providing for flexible work
Reducing the labor-intensive nature of some roles through technology
A practical approach: Phased retirement and mentoring
One of the most proactive schemes we have seen implements the phased retirement and mentoring program into one solution. In these companies, particular segments of the workforce who are approaching traditional retirement age are identified and steps are taken to fully understand the knowledge they retain. A program is put into place to effectively transition this knowledge to younger employees.
In such cases, the HR team has partnered with line managers to identify individuals who may be interested in discussing a five-year transition to retirement where the individual will be able to control their legacy and their transition to a new life outside work. This approach recognises that the majority of individuals are not ready to retire now, and haven’t given any real thought to what they will do when they finish work. This program gets them thinking about what life would be like after work. Could they really spend 40 hours a week at the local social club? How long could they go travelling with a spouse or partner? These are questions potential retirees sometimes need to spend more time evaluating.
On the other side of the equation, the employer is supporting a staged reduction in working hours enough to support the hiring of a new recruit. Five senior employees willing to go to a four-day work week will fund a new full-time employee.
There are many advantages to this approach. Since the organization is not trying to recruit a large number of new skilled hires at one time, HR can focus on talent pooling and workforce planning, which means lower cost at hiring time. Your aging workforce help with training and mentoring new recruits while gaining control over their legacy and their transition into retirement.
This solution won’t work for all organizations, but is appropriate for skilled trades, engineering and technical roles where a combination of “on the job” experience and formal qualifications are key to successful performance. However, it is worth bearing in mind that some roles involve such profound technological and demographic change that they may no longer be in existence in the near future, and potentially a focus on new innovation will be the way to sustain profit and growth.
I invite you to join the conversation—use the hashtag #timetoretire – and let us know what your organization is doing to support your aging workforce, and tap into their invaluable knowledge and experience.