*This article first appeared on Brink News on September 26th, 2019*
Across many parts of the world, we are now living 10 years longer, on average, then our parents’ generation and nearly two decades longer than our grandparents’ generation.
This social revolution has implications for every part of our society: how we think about and live our lives, how we manage our health and wealth, and how we will work in the future – enabled by technology and sustaining financial wellness through retirement. G-20 leaders agree that continued strong economic growth demands that our societies support people in healthier living and remaining in the workforce longer.
Failing to become “age-ready” – i.e., ignoring and excluding the experienced workforce of people aged 50+ - represents a missed business opportunity and poses serious risks for any organization.
Supporting age-ready workforces, on the other hand, can not only improve well-being and enable people to remain active and economically productive, but it can also reduce dependency and lessen the burdens on health, pension and social systems.
More than ever, highly experienced people aged 50+ are remaining in the workforce, willing and able to contribute to business success. Yet for many employers, experienced workers are largely ignored or misperceived in their strategic workforce plans and not always in focus through the lens of inclusion and diversity. Perceptions about the value of older workers are misleading at best – and often wrong.
As a result, many businesses have failed to capitalize on the value that experienced workers can deliver and respond to the significant risks posed by extended working lives, including the pernicious effects and risks of age discrimination.
According to Mercer’s recently published Next Stage: Are You Age-Ready? report, organizations best positioned for the future of work actively leverage their older, experienced workforce. They recognize that the dual impacts of a rapidly aging labor force and uncertain global economic growth require this age-ready strategy.
With labor force size, participation rate and productivity so closely tied to business and economic growth, the experienced workforce is a source of talent and competitive advantage. Employers need to address it now. To be age-ready, however, requires a thoughtful and careful analysis of this workforce segment. It also calls for a change in mindset as to how experienced workers truly add value to organizations.
A critical part of being age-ready involves gauging the contribution of experienced workers, based on hard facts developed from the application of advanced workforce analytics. That’s what the new world of evidence-based management requires. Companies that fail to do so will lose out competitively to those that do.
Thus, age-ready employers will maximize operational effectiveness and capitalize on the value that workers with decades of experience can deliver. They will tap into a larger pool of talent, given that declining birth rates are triggering real labor shortages in developed geographies. This wealth of talent will:
Enable innovation and customer connectivity
Increase knowledge-sharing and strengthen collaboration
Ensure fairness, equity and inclusivity across the workforce
Avoid litigation risks
Better align the workforce with future needs of the business
Outdated Employment Models
Many businesses still rely on outdated employment models that assume experienced workers have one foot out the door to retirement, as Mercer’s Are You Age-Ready? report describes. They haven’t adjusted to the fact that life expectancies – and, thus, working lives – are much longer today compared to yesterday. The result? A lack of strategic road maps designed to capture the value of experienced workers.
For example, wide-scale shifts in pension plan design – combined with low interest rates and longer life expectancy – find most workers less financially prepared for retirement and with little incentive to retire at a predictable time. This is an issue that burdens pension systems and workforce planning. However, talent models don’t reflect this new reality.
Neither do many employers’ attitudes toward work flexibility. While flexibility is often thought of as a perk to attract younger talent, it is especially appealing to older workers. Yet many employers struggle to offer flexibility in a fair and consistent way across today’s multi-generational workforce.
Meanwhile, technology will continue to disrupt the nature and requirements of work. Advanced technology will more likely displace experienced workers than younger workers. At the same time, the transformation of work is imperiling organizations that don’t have the people or skills necessary to compete and thrive in the Fourth Industrial Revolution. And if there aren’t enough skilled workers to do the required jobs, re-skilling experienced workers must be in the playbook.
Experienced workers often find themselves with fewer options when it comes to hiring, training and development, opportunities for advancement, and flexible work arrangements. Furthermore, the technological revolution has complicated companies’ relationships with their experienced workers. And while advancing technologies, such as automation and AI, may displace older workers first, organizations already face a shortage of technical skills required to succeed in the digital age.
Companies will need to take talent wherever they can find it, which includes re-skilling the experienced workers they already employ.
Finally, ageism and age-related bias obstruct the contributions of experienced workers.
Indeed, ageism is unquestionably prevalent in the business world: 61% of respondents to an AARP survey report having either seen or experienced age discrimination in the workplace, and 38% believe the practice is very common. This also plays out in how companies handle employee development.
While legal challenges surrounding age discrimination are an obvious threat, there are subtler, longer-term implications around the quiet erosion of an organization’s effectiveness and sustainability over time.
Neglecting experienced workers exacerbates the already widening talent and skills gaps that burden many companies. Experienced employees carry with them many years – often decades – of institutional knowledge and client relationships that can and must be retained or passed on, lest those critical assets walk out the door forever.
Organizations have always been forced to adapt to shifting demographic and technological trends, but the longevity challenge facing today’s businesses is unprecedented in its global nature, rapid development and sheer volume. Given that so few companies have well-formed plans to address it, urgent action is needed today to avoid costly pitfalls tomorrow.