Age of opportunity
Age of opportunity
Many countries will soon be faced with an ageing workforce, but too many organisations view this as challenge. It’s time for businesses to see a growing proportion of older workers as an opportunity, not a burden
Today, Japan is the only country in the world where those aged 60 and over represent more than 30 per cent of the population. By 2050, 62 countries will reach that percentage.
In the US, Americans of retirement age will eclipse the number of people aged 18 and under for the first time in the country’s history by 2035, government figures show. And globally, the number of people aged 60 and over is projected to double to more than 2 billion by 2050, according to the World Health Organization (WHO), with those 60 and over outnumbering children under the age of five. Yet, in Europe only a third of people between the ages of 60 and 64 are in employment, according to the International Longevity Centre (ILC).
While the proportion of older employees is growing across many workforces, a significant percentage of these workers do not feel their employer is helping them reach their full potential.
Research from Aviva found that 44 per cent of older workers in full- and part-time roles in the UK felt unsupported by their employer when it comes to their career ambitions.
So how can organisations support older workers more effectively and enable them to give their best at work?
One of the first steps in bridging this generational gap is addressing and overcoming age bias, which is all too prevalent when it comes to retention efforts, with a number of employers targeting younger talent while making assumptions about older workers.
Paul Irving, Chairman of the Center for the Future of Aging in California, says that, while the prevailing narrative suggests that the ageing workforce might impede the progress of younger workers, there is little evidence to support that concern.
“Economies and opportunities are elastic. Older and younger workers bring different talents and perspectives to workplaces and there’s increasing evidence that intergenerational teams outperform single generation teams of any age,” he notes.
The statistics back up Irving’s comments too. A Boston Consulting Group study of 1,700 companies in eight countries found that businesses with above-average total diversity (in terms of migration, industry, career path, gender, education and age) on average scored 19 percentage points higher in innovation revenues and nine higher in earnings before tax margins.
And while older workers are more prone to feeling fearful of artificial intelligence (AI), they typically bring a host of other skills such as mentorship, judgement and experience, while their younger colleagues bring fresh thinking, creativity, and technological capabilities that complement their experienced counterparts. And as AI, robotics, autonomous transportation and other new technologies are set to change the world of work dramatically, Irving says reassuring workers across all demographics is vital.
“Both young and old share concerns about the future of work and solutions must address the needs and aspirations of workers of every age.”
Time to develop
Many of today’s older workers are of the ‘sandwich generation’ – those who may be both financially responsible for children and caring for elderly parents. This, says Donna Miller, European HR director at car rental firm Enterprise Holdings, may be a contributing factor when it comes to having to work longer and keep reskilling. “There are overarching and often economic factors that mean a person isn’t able to retire at a specific age,” she notes. “This could be because they haven’t put in place the financial plans, might have caring responsibilities or because their financial plans have not worked out as expected.”
This can, however, be advantageous for businesses, says Miller. While they may take a more ‘junior’ role than that of their last job, they can still bring a depth and breadth of knowledge that their younger colleagues may lack. “They are often looking for flexibility and ideally for a regular commitment.”
If employers are unsure how to support older employees, they should, says Irving, simply ask them. “Invite dialogue with experienced staff to seek their advice and input on a wide range of challenges and possibilities. Then listen to what they have to say,” he notes. “Consider age-friendly approaches such as flexible work hours, job sharing, part-time opportunities, transitional retirements and workplaces designed for a changing demography.”
Irving says diversity and inclusion policies should also be broadened to ensure they encompass age. “Age diversity is a strength, and the inevitability of population ageing means that every enlightened company must think now about new ways to retain experienced talent, integrate the old and young, and adopt policies and practices that maximise the loyalty and productivity of workers of every age,” he notes.
Learn from experience
Ed Johnson, CEO and founder of global mentoring network PushFar, says mentoring can also be a very effective way for organisations to leverage the knowledge, skills and experience of an ageing workforce. “We are finding time and time again that those individuals coming to retirement or who have recently retired make highly effective mentors,” he says.
Encouraging intergenerational mentoring, with both younger and older mentors, can have a huge positive impact on employee engagement, a sense of empowerment and cross-organisational success, says Johnson.
However, Jon Boys, labour market economist at the CIPD, the professional body for HR and people development, says that there is still a significant variation between sectors when it comes to employing older workers.
“For example, the hospitality sector is mainly made up of younger workers while the health and social work sector has a large number of older workers,” he notes.
There may also be a misconception by some employers that if people are working for longer and later, they will inevitably be taking employment opportunities away from young people, which could be more prevalent in certain sectors, says Boys. “There are not a fixed number of jobs in the economy; more people in work creates more demand and more economic growth, which in turn leads to more jobs.”
Some countries may also be managing the ageing population more effectively than others, says Dr Brian Beach, Senior Research Fellow at the International Longevity Centre. “The realities are very different from country to country. In Western countries, where retirement traditions and policies are more established and where early retirement was encouraged in the late 1970s and 1980s, ageing populations create a challenge for national economies to balance their public pension expenditure with revenue from income and employment taxes,” he notes. “Some non-Western countries have seen stronger trends in semi- or partial retirement among people in later life, some of which will be driven by a relative lack of formal pension systems or lack of security in retirement income.”
There are, however, several initiatives seeking to support older workers and give them fuller working lives across Europe. For example, Deutsche Bahn, the train operator in Germany, has recently helped shift their older employees from more physically demanding positions to customer-facing roles, which is, says Beach, partly inspired by the recognition that people feel more comfortable approaching older staff to request assistance or advice. “And Finland has been a world leader in the concept of age management and the concept of work ability,” he notes.
In fact, the Finnish National Programme on Ageing Workers, which was launched all the way back in 1996 and ran until 2002, encouraged older workers to participate in the workforce for longer, while providing training and upskilling to help them stay up to date with technological advances.
Keeping opportunities equal
Arwen Makin, a senior solicitor at ESPHR, says employing older workers may be a sensitive area for employers to navigate, especially when it comes to retirement. “Organisations cannot request that an employee retires or be seen to try to plant the seed without getting into risky territory and risking age discrimination and constructive dismissal claims,” she notes.
While there are some very fit and competent people over the age of 65, there may come a time, says Makin, when there is a natural decline in a worker’s capabilities. “This is where things can become tricky and there is a need to adopt a sensible yet sensitive approach. If someone has been employed for a particular role – which they might have been doing perfectly well for years – you cannot discriminate against them as they get older,” she says. “You can however look to performance-manage any issues which arise in a fair way.”
Fostering a culture of inclusivity, open communication and mutual respect is the best way of addressing this, says Makin. “The moment you start treating older workers differently, you stop engaging them and run the risk of damaging company culture,” she notes.
Given the differences between generations, and the upcoming seismic demographic changes we are witnessing, HR directors should be putting the topic of an ageing workforce at the top of their agenda.
The benefits of embracing a multigenerational workforce have been demonstrated, and employers who actively embrace age diversity will be able to open their doors to a huge incremental talent pool of older workers that may have previously been ignored.
Ultimately, says Angela O’Connor, CEO of the HR Lounge consultancy, it’s about realising that older workers want the same sort of things younger workers want: “Quality jobs, good relationships with their colleagues, meaningful work that links to their values and the ability to make a difference – the same thing we all want, regardless of age.”
Ageing in numbers
- Between 2015 and 2050, the proportion of the world’s population over 60 will nearly double from 12 per cent to 22 per cent, WHO figures show.
- The global spending power of people over the age of 60 will reach $15 trillion annually by 2020, according to the Bank of America Merrill Lynch.
- In Japan, they have what is classified as a ‘super-ageing’ society, where a third of citizens are over the age of 60, 26 per cent are aged 65 or above and 12.5 per cent are over 75, according to government estimates.
- The total population in the EU is projected to increase from 511 million in 2016 to 520 million in 2070 (2018 Ageing Report).
- Overall in the EU, the total cost of ageing (public spending on pensions, health care, long-term care, education and unemployment benefits) is expected to increase by 1.7 per cent to 26.7 per cent of GDP between 2016 and 2070 (2018 Ageing Report).
How DHL is changing the conversation
DHL Supply Chain is one of the four divisions of Deutsche Post DHL (DPDHL). Its company headquarters are in Bonn, Germany. In 2018, the DPDHL generated a revenue of €61 billion, with DHL Supply Chain employing more than 150,000 employees globally. The supply chain part of the business provides contract logistics solutions for customers from a range of sectors.
“The ageing workforce is often portrayed negatively, with claims of productivity dips, expense to hire, inadaptability to change and working with new technology and low motivation levels without the data to qualify them,” notes Lindsay Bridges,
Senior Vice President of HR, UK&I. “Phrases such as ‘workforce crisis’, ‘talent gap’ and ‘skills shortages’ are often used. However, I think the conversation needs to be about how to take advantage of the experience and knowledge that older workers can offer businesses.”
DHL, for example, has a number of measures in place to support older workers. “In terms of flexibility, we offer part-time, seasonal work, phased retirements, job share and compressed hours,” says Bridges. “For ongoing career development, we extend all our career models to all ages, creating new development paths and roles for workers at every stage of their career.”
It also tries to showcase a number of ‘age-positive’ role-models throughout its recruitment marketing and has multiple entry points into the organisation that are age positive.
“We make it obvious in job adverts which kind of fluid work arrangements are available, enabling candidates to have a conversation about the flexibility they need,” Bridges explains. “As a business, we have broadened the range of adjustments on offer in terms of hours, schedule and location to adapt to the needs of our workforce and we try and reflect this.”
It also has a re-entry programme for military leavers, who tend to be of a slightly older age. “We work with the Career Transition Partnership to enable people who are leaving the armed forces to successfully transition into a new career,” says Bridges.
In order to ensure younger workers don’t miss out, it run an emerging talent programme too, which focuses on first-time entrants into the logistics profession. “We offer a competitive ‘Future Leaders’ graduate scheme and apprenticeships aimed directly at school leavers,” Bridges explains.
In fact, 2019 saw the biggest intake of graduates and apprentices for DHL, with 105 new candidates joining schemes including the graduate programme in September.
Bridges believes that companies that invest in understanding the changing trends within the workforce will thrive. “Companies who plan, design and experiment with workforce strategies, policies and management approaches for longer working lives will reap the rewards in the long term, and those that lag behind could likely face that talent gap and skills shortage.”