Based on IBM’s research and experience working with companies on their workforce strategies, we recommend the following six strategies for addressing the challenges of an aging workforce:
- Redirect recruiting and sourcing efforts to include mature workers
- Retain valued employees through developing alternative work arrangements
- Preserve critical knowledge before it walks out the door
- Provide opportunities for workers to continually update their skills
- Facilitate the coexistence of multiple generations in the workforce
- Help ensure that mature workers are able to use technology effectively in the workplace.
Redirect recruiting and sourcing efforts to include mature workers
Given the shift in workforce demographics, companies are quickly finding shortages of workers from labour pools where they normally would draw younger employees. ASDA, the UK’s largest retailer, has recognised the value of attracting mature workers on a part-time basis. The company has over 20,000 employees who are over 50 years old, representing 19 percent of its workforce. ASDA provide a number of flexible benefits targeted toward mature workers such as “Benidorm leave” (three months unpaid leave between January and March) and “Grandparent leave” (a week unpaid leave after the birth of a grandchild). ASDA has found this focus on aging workers provided a number of organisational benefits. For example, stores with a higher proportion of older workers have absenteeism rates less than a third of ASDA’S average rate. Also, in March 2003, ASDA was selected as one of Britain’s top 10 companies to work for, and the UK’s best company for flexible working.
Attracting mature workers does not have to be limited to entry-level positions.
Procter & Gamble (P&G) and Eli Lilly are the initial sponsors of YourEncore.com, a contracting agency focused on attracting retired research scientists, engineers and product developers who want to work on a project-by-project basis. Retirees are hired by YourEncore.com and are provided with marketing, accounting and administrative support. At the same time, YourEncore.com works closely with sponsoring companies to identify opportunities to use these resources on a part-time basis. As sponsoring companies, P&G and Eli Lilly obtain access to a range of experienced personnel that they can tap into on an as-needed basis.
Retain valued employees through developing alternative work arrangements
While some companies are recruiting aging workers, other companies are developing alternative work arrangements to try to hold onto employees before they walk out the door. One organisation that has made a commitment to retaining workers after they reach retirement age is the Aerospace Company, a U.S. defence contractor. It developed a Retiree Casual program, where retirees can work on a project-consulting basis for up to 1000 hours per year and earn roughly the same base salary they earned prior to retirement, depending on roles and responsibilities.
About 500 Retiree Casuals are eligible to work, while 200 are working at any given time. Most individuals in the program work two days per week, but some work full-time for six months straight. Most of the workers in this program are in their mid-sixties, but some continue into their eighties. The program has proven beneficial not only for the participants, but also for the company as a whole. As George Paulikas, a retired executive vice president and a program participant said, “The Retiree Casual program keeps expertise around and helps transfer it to others. 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.” In addition to retaining workers using part-time work schedules, companies should also explore, when appropriate, the use of telecommuting as a way of encouraging mature workers to remain with the organisation.
Preserve critical knowledge before it walks out the door
When individuals leave an organisation, the organisation often loses a career’s worth of experiential knowledge. This can range from e-mails, reports and documents that employees have accumulated, to tacit knowledge about how to do their jobs effectively. Too often, this knowledge leaves the organisation without any attempt to identify, capture and share it with others. As a result, remaining employees often search futilely for answers to questions that have already been answered, recreate analyses that have been conducted many times over or simply fail to heed previously learned lessons that were never formally identified and captured.
A number of firms have focused on techniques to stem this haemorrhage of corporate insight. One set of techniques focuses on eliciting the experiential, or tacit, knowledge of employees. Through detailed interviewing and/or documentation, companies are trying to capture these insights in an explicit form that can be stored for future use. Other companies have tried mentoring arrangements and fostering communities of practice to encourage mature workers to pass down the knowledge from their generation to the next. This type of knowledge exchange can be especially useful when the decision rules and experiences cannot be easily captured or written down without losing the essence of the knowledge. To retain valuable experiences, share lessons learned, expand the organisation’s knowledge base and improve operational and product quality, The World Bank captures videos and audiotapes of selected individuals and groups involved in challenging projects. Using storytelling techniques, the Bank seeks to uncover new knowledge from the practitioners in developing countries. Interviewees are encouraged to focus on telling stories, rather than providing general observations, so the material will be more interesting for the intended audiences. This knowledge retention initiative uses subject matter experts to conduct interviews, as well as to screen and edit the videos and audiotapes, pushing relevant insights and content to audiences through a variety of media.
In concert with its well-conceived elicitation technique, The World Bank’s knowledge dissemination process also contributes to its success. Both audio and videotaped interviews are posted to a Web site and burned onto CD-ROMs, with any documents referred to during the interview appearing as hot links in the final text. The World Bank also pushes these debriefings to a distribution list of targeted members, rather than simply passively posting them on the Internet. For reinforcement, they also make interviewees available for follow-up and mentoring.
Provide opportunities for workers to continually update their skills
Executives are recognising the need to refresh the skills of those workers whose formal training may have ended years, if not decades, earlier. Lufthansa, the German airline, recognised that many of its older workers were not participating in learning activities. An annual evaluation of its training showed that the company had not offered systematic training opportunities for older workers for more then 10 years. To address the learning needs of managers older than 45, the company started an initiative called the “Added Experience Program.”
The objectives of this program are threefold: to transfer informal skills that have not been taught and that are necessary in the working environment, to create a dialogue among participants that facilitates the exchange of valuable experiences and enables managers to increase the size and scope of their personal networks, and to allow top management to learn about, and tap into, the know-how these experienced managers brought to the table. The program lasts for one year and consists of a number of one week modules. The participants stay in the same cohort throughout the year to build a level of trust that is needed to share lessons learned and good practices.
Facilitate the coexistence of multiple generations in the workforce
Facilitate the coexistence of multiple generations in the workforce Age is often overlooked when addressing the subject of employee diversity. Yet, the viewpoints and perceptions of different age groups can present significant barriers in a workforce where age differences can span 40 years or more. For example, preconceived biases about the willingness of older workers to learn and embrace new technologies can limit their opportunities, discouraging mature workers from refreshing their skills. At the same time, younger workers may be perceived as not willing to “pay their dues” before advancing in the company. This can dampen the enthusiasm of new employees and result in low morale and early attrition.
Help ensure that mature workers are able to effectively use technology in the workplace
One of the primary misperceptions of many employers is that older workers have more difficulty learning and adopting new technologies. However, a number of research studies have demonstrated that age alone is not directly linked to the adoption of computer use in the work environment.30 For example, a recent case study involving mature workers at the UK retailer Tesco found that, while not all older workers were initially comfortable using new technologies, many quickly adapted to it. Motivation was cited as one of the primary drivers for adopting new technologies. As one manager stated, the mature workers were the ones “studying the literature, making use of telephone help-lines and suffering the restless nights making sure they could do the job.”
However, organisations should be cognisant of two issues related to the use of technology by mature workers. First, organisations need to consider the accessibility requirements of older workers. As individuals age, it may become more difficult to decipher smaller typefaces on a screen, understand the audio portion of a streaming video, or control the hand motions necessary to use a computer mouse or similar devices requiring precise movements. When designing systems, companies need to address the needs of potential user groups and provide alternative mechanisms for accessing, displaying and manipulating Web pages and other applications.
Furthermore, organisations need to evaluate the strategies associated with rolling out and training older workers on new applications. Organisations should consider building a cadre of influence leaders to demonstrate to older workers that they are capable of learning the new technologies, and build in ample practice opportunities to build comfort and confidence among individuals who have less experience in using the technology.
Moving forward
Given the changing composition of the workforce in the next 5 to 10 years, the following questions can help companies identify key HR requirements to avoid potential pitfalls and proactively address related issues:
- Does your company have a detailed understanding of its employee demographics, and of what key positions or job categories may be at risk in the near future?
- Has your company identified potential opportunities for attracting and retaining mature workers using part-time or alternative work arrangements?
- To what extent is retraining mature workers part of your company’s overall learning and development strategy?
- Does your company have a strategy in place to preserve critical knowledge before it walks out the door?
- How effectively are age-related issues addressed within your company’s overall diversity strategy?
- To what extent does your company address the accessibility needs of employees when designing or implementing new software?
Firms need to take a proactive approach to address demographic changes, both within their organisations and across their labour markets, to avoid issues that could significantly hamper companies in the industrialised world. For more information, please visit: http://www-8.ibm.com/innovation/au/transform/iep.html
