While the typical office used to be filled primarily with young people, that demographic is on the decline. Due to lower birth rates and longer life expectancies worldwide, we’re heading rapidly toward work environments where older workers will outnumber younger ones. A Harvard Business Review article by Tammy Erickson discussed this recently, noting the implications of these shifting age demographics for management and leadership, and suggesting ways that companies can better manage this changing workforce moving forward.
One of Erickson’s main points is that many current talent management strategies are based on the older pyramid-shaped model of having only a few older workers in the mix, with a much larger base of young workers. Yet the new geometrical workforce configuration that we’re headed toward may eventually flip the traditional pyramid on its head, requiring companies to rethink many aspects of today’s organizational designs and approaches.
For an example of what this might mean for tomorrow’s employers, we need only look at the United Kingdom. By 2020, 36 percent of the working population in the UK will be over age 50. And research shows that by 2035, the number of people aged 90 and above is expected to triple.
HR Magazine reported recently that according to the Chartered Institute of Personnel and Development (CIPD), UK employers will need to fill around 13.5 million jobs in the next decade—but only 7 million young people will graduate into the job market during this time period. To address this challenge, CIPD produced a guidance document, Managing a Healthy Ageing Workforce: A National Business Imperative, to encourage employers to find ways to start relying more on older workers. The publication focuses on managing an aging workforce through building a business case to support changes, addressing issues of perception, and developing talent management.
When it comes to talent management, below are some areas that Erickson recommends thinking about at the corporate level to help better manage—and cater to—older workforces.
Under the old model, recruiting initiatives were targeted mainly at younger people, in an effort to attract talent fresh out of college or in the early stages of one’s career. Recruiting at school job fairs, and providing on-site perks that traditionally appeal primarily to young people, are two examples of how many companies are used to doing business.
Yet Erickson notes that if your business model is over-dependent on bringing young people on board, you may soon find yourself challenged when dipping into the future pools of available hires. She recommends ensuring that your recruitment investments allow you to attract different age groups, including older candidates. For example, work to diversify your sources for identifying potential candidates, expanding beyond college recruitment fairs.
Attract Older Workers
Once candidates are hired on as employees, many companies continue to cater to younger workers through their talent management practices. Forward-thinking companies will find ways to reverse this tendency, to make the work environment more enticing to the growing numbers of veteran employees. Here are some areas that Erickson recommends revisiting, and perhaps revising:
- Career paths. Standard career paths involve moving up the ladder to take on greater challenges and more responsibility. Yet as we get older, many people prefer to have other options that allow us to encompass the breadth of our lives at later ages. Offering more flex-time options, or opportunities to do less at certain time periods, may be appealing to some older workers (and some younger ones as well). Though not true for everyone, some may prefer to slow down as they near the end of their work lives—so offering detours and occasional off-ramps may be a good way to help retain the dominant part of your employee base. Also, consider whether headcount-based metrics are keeping you from being able to utilize flexible arrangements—such as job share, part-time, and cyclical workers—to tap into a wider talent pool that may include different age groups.
- Rewards. Along with promotion-based career paths, certain rewards are associated with the previous population pyramid. Prestige-based titles, for example, may be less effective as incentive for older workers once they’ve reached the top of the organizational chart. Erickson suggests finding ways to offer people variety without moving them “up” in the traditional way. For example, she recommends thinking about how to move toward task-based, rather than prestige-based, titles. She also suggests considering different ways to provide compensation opportunities—for example, by compensating employees for breadth if they can fill multiple roles.
- Retirement. If your company has a mandatory retirement policy, managers may soon find that there are not enough young people in the job market to replace those who leave. Therefore, it’s smart to start making organizational changes now, such as those mentioned above, to make your workplace more desirable to older workers and encourage talented employees of any age to keep working as long as possible.
HR Magazine notes that while some proactive employers have started to get a jump on tackling the issues associated with an aging workforce, many have yet to make significant headway, perhaps due to lack of awareness around the changing demographics. Yet as Dinah Worman, CIPD’s diversity manager, says in the article, “Organizations that respond appropriately to the challenges of an aging workforce will gain a significant competitive edge, both in terms of recruiting and retaining talent, but also through supporting the well-being and engagement of employees of all ages.” Since the business case for older workers is strong and research shows this group will soon become the dominant demographic in the workplace, forward-thinking companies would be wise to start making this topic central to their organizational planning initiatives.