Employees Improve with Age

Successful organizations can show you how to address the needs of a mature workforce.

"DON'T trust anyone over 30" was the cultural byword of the very generation that is now approaching retirement age. The graying of Woodstock Nation, a global demographic stretching from the United States to Japan, would normally have signaled the departure of older workers and the arrival of a younger generation. The relatively small number of children born to the Baby Boomers, however, has resulted in an unprecedented phenomenon: Employers in nearly every industrialized nation are starting to think about retaining their workers ages 50 and over, either as staffers or contractors. The current flock of graybeards is simply too valuable to send off with simply a goodbye party and a gold watch.

Hardest hit are the public and industrial sectors, including government at all levels and industries such as chemicals, petroleum, aerospace, defense, and mining. Not surprisingly, productivity in these areas has depended on highly skilled "knowledge workers," many of them with post-graduate degrees and three decades of hands-on experience. As these workers depart the workplace, they take with them not only basic on-the-job expertise, but also tacit information about managing client relationships and finessing complex processes.

This brain drain is not expected to slow any time soon. In the United States, the next big wave of workers is in the 16- to 24-year-old category, according to the Bureau of Labor Statistics, and it is growing at about 15 percent this decade. The more immediate replacement workforce of 25- to 34-year-olds is growing only at half that rate. The population between 35 and 44--the prime executive development years, according to the Harvard Business Review--is actually declining.

The problem of an aging workforce is a phenomenon facing many mature economies. The Bureau of Labor Statistics projects that the percentage of U.S. workers older than 55 will almost double between 2000 and 2015. In Texas, the population of those older than 65 is expected to increase from about 2 million today to more than 5 million by 2030. This trend is also apparent in Japan, Italy, and Germany, where the proportion of people older than 65 will reach 20 percent between 2006 and 2009, up from 10 percent just 20 years ago. Conspicuous gaps in the workforce are further compounded by low birth rates. In Japan, the number of people in their twenties will decline by 3.2 million during the next decade, according to The Wall Street Journal. Extending everyone's working life until 65 would keep 2 million more people in the workforce. Along with women, who traditionally have stayed at home in Japan, these older people would help compensate for the absence of Japanese twentysomethings.

The aging workforce poses some real challenges that companies will have to address to ensure their profitability, potential for innovation, and successful marketing to the largest elderly consumer base in history. Below are six strategies that some of the world's most successful organizations already have implemented to address the needs of a mature workforce.

Strategies for Success

  • Redirect recruiting efforts to include mature workers. Wal-Mart subsidiary ASDA, the UK's largest retailer, has a special recruitment program aimed at older workers. ASDA Goldies offers full- and part-time positions with flexible hours, discounted health care and dental coverage, a pension plan, four weeks paid holiday, and unpaid personal leave. The program has been successful: Nearly one-fifth of the retailer's 122,000 employees are older than 50, with some well into their seventies. ASDA received the Nestlé Social Commitment Award in 2002 and this year landed in the top 10 of the Sunday Times Top 100 Best Employers Survey--the third time in a row.
  • Retain valued employees by offering alternative work arrangements. Why try to entice your best employees back after they've already left? The Aerospace Corporation, for example, has developed a "retiree casual" program that permits contractual arrangements with former employees for up to 1,000 hours a year. Some 500 participating employees at the El Segundo, Calif.-based non-profit research and development firm can earn roughly the same base salary they made before retiring (adjusting for modified roles and responsibilities). The company also offers a "try-on" retirement plan that lets older workers take a leave of absence to see whether they are ready to retire or not. Said one former executive vice president and program participant, "People often remark that we don't have many consultants around here. Actually, we do, but they are called retirees, and they already know the business inside-out."
  • Preserve critical knowledge before it walks out the door. To retain tacit knowledge, the World Bank produces videotapes and audiotapes of stories by individuals and groups who were involved in challenging projects. Subject matter experts conduct the interviews, edit the tapes, and then make the stories available by CD and intranet. Documents referred to in the course of an interview appear as hot links. Most interviewees are available for follow-up conversations and mentoring.
  • Provide for continuous updating of skills. Training opportunities for older workers at Lufthansa had not been adequately addressed for more than a decade. The German airline company announced the "added experience program," an initiative that addresses the learning needs of managers ages 45 and up. The one-year program ensures the transfer of informal skills to colleagues; facilitates the exchange of valuable experiences and personal contacts; and helps top senior management tap into the know-how that seasoned managers bring to the table.
  • Facilitate the workplace coexistence of multiple generations. At the dawn of the e-commerce era, 500 senior managers at General Electric began working with junior associates to understand how Internet technologies could enhance profitability. Junior mentors and senior novices, paired up on the basis of temperament and skill level, spent two to four hours a week studying the World Wide Web. The arrangement--in keeping with GE's "boundaryless" work environment--was a win-win: Senior executives acquired insight into critical Web-based technologies, while junior people gained access to executives they otherwise would not have had.
  • Make sure mature workers know how to use current technology. Manufacturing and trade companies, which laid off workers during the tech boom of the late 1990s, are now in desperate need of workers, according to WorkinfoNET, a Toronto, Ontario, Web site. Requirements for positions, however, have changed thanks to the implementation of advanced technologies. A 2005 study of state agency employees done at Louisiana State University observes that older workers are actually more open to learning new technologies than their younger counterparts. Imbued with a strong work ethic, they are even more inclined to make changes that benefit their organizations. The study nonetheless confirmed the popular belief that older people learn more slowly, although a steeper learning curve is generally offset by their commitment and willingness to learn.

Access is Paramount
Additionally, companies need to be sure not only that older employees know how to use current technologies, but also that it is accessible to them. For example, knowing how to navigate around a Web site is fruitless if the font size is too difficult for the aging eyes of the maturing workforce to read.

Management consultant Peter Drucker has called knowledge the "new basis for competition in post-capitalist society." Any loss of intellectual capital signals a looming crisis that companies in an age of emerging economies, global markets, and on-demand technologies cannot afford to ignore. The byword now: Don't trust anyone who argues against keeping or hiring older workers. Fiftysomethings--and up--are literally a brain trust you cannot afford to waste.

This column appeared in the August 2006 issue of Occupational Health & Safety.

References

  1. Dychtwald, Ken, Tamara Erickson, and Bob Morison. "It's time to retire retirement." Harvard Business Review. March 2004.
  2. ASDA Web site: www.asda.co.uk.
  3. "Retaining Valuable Knowledge: Proactive Strategies to Deal with a Shifting Workforce." APQC Best Practice Report, August 2002.
  4. Euler, Petra, "Die vergessenen Manager trainieren," in Personal fuhrung, 1998, p. 1.
  5. GE Annual Report, 1999; Schlender, B. et al., "The Odd Couple," Business 2.0 May 2000; Breen, B. "Trickle-Up Leadership," Fast Company magazine. November 2001; Low, L. "New Tricks for Old Dogs," CIO magazine. October 15, 2000; Useem, M. "Leading Up: How to Lead Your Boss So You Both Win." 2001. New York, New York: Three Rivers Press, p. 284.
  6. The Chicago Tribune.

This article originally appeared in the August 2006 issue of Occupational Health & Safety.

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