As more employers wake up to the implications of an aging population, and the grip of ageism on workforce recruitment begins to loosen, business leaders face a familiar situation: how best to adapt to the new normal. As we saw in part 1 of this series, businesses face fundamental issues when it comes to managing older workers, such as not being aware of when their employees are expected to retire.
Moreover, rewiring the organization’s recruitment policy in such a situation is bound to meet resistance. In this installment, we will look at the various challenges associated with transitioning to a multi-generational workforce, and how businesses can begin to tackle these challenges.
Enabling long careers
As they try to build a multi-generational workforce, employers typically face challenges related to both the day-to-day management of older employees, and entrenched mindsets that need to be changed.
Changing perceptions on retirement: Retirement isn’t what it used to be. With more workers staying longer on the job, the idea of setting a fixed retirement age has become less relevant over the years. Businesses looking to create a strong multi-generational workforce need to begin by making conversations about retirement part of the day-to-day organizational discourse and culture. This has implications for younger workers, too, who might like to explore different career paths as they mature within the organization.
Health insurance: Health insurance costs typically increase with age, meaning companies looking to retain older workers might have to contend with higher premiums. Research suggests that an employer’s insurance cost burden has a bigger say in hiring decisions than the age of the employee. Moreover, in a country like the U.S., businesses might have to deal with regulations that vary from one state to another.
Working hours: Flexible working hours are critical to older workers, in the form of either shorter workdays or shifts that allow them to attend to other responsibilities. A survey of over-50 workers in the UK, for example, found that 78% of respondents wanted flexible hours. For businesses, this means creating the necessary processes to support such an arrangement while also mitigating business risks that may arise from employee absence.
Skillsets: In addition to flexible hours, the UK survey found that 63% of older workers seek training and retraining to gain new skills and deal with technology. At a time when advances in technology have created a massive skills gap, harnessing the readily available skillset provided by older employees and building a talent pool will help businesses mitigate risks and cut costs associated with recruitment.
Cultural change: Age bias continues to be the biggest barrier to recruitment of older workers, according to an AARP study. As many as 91% of respondents believe age-based discrimination is common. Businesses that are serious about building a multi-generational workforce cannot afford to ignore this phenomenon, which hinders their ability to tackle any of other challenges mentioned.
Creating a thriving age-diverse workforce
A thriving multi-generational workforce is as much about resolving differences as it is about exploring synergies. However, generational differences often emerge through severe misunderstandings on both sides (older employees may believe younger people do not work hard enough, for example, while younger associates may disparage older workers for their lack of modern digital skills).
Perceptions aside, this is counterproductive to the organization. Most employees, regardless of their generational status, just want to contribute to the business in a meaningful way. For business leaders, the pursuit of this goal is the foundation on which they can build the multi-generational workforce of tomorrow. The following ideas can help.
Pursue lifelong education
At a time when the business world is grappling with a huge skills gap, the idea of lifelong education seems like a no-brainer. Dig a little deeper, though, and it becomes clear that it is not that straightforward. Most businesses initially react to a skills shortage by focusing on recruitment, which is often more expensive than retraining employees. A survey by Randstad found that just 11% of companies are focused on training employees to upgrade skills. A survey by Salesforce, meanwhile, found that budgetary constraints, lack of employee participation, and lack of technology/platform were the top three obstacles to employee skills development faced by hiring managers.
Businesses will need to overcome the psychological barriers and quiet comfort of status quo to proactively invest in building talent pools and encouraging employees to upgrade their skills on a continuous basis. They must also provide counseling services to anyone who needs them. This is especially true for older employees who have internalized the idea that youth is the only time when one can acquire skills.
Importantly, millennials, who are expected to account for more than one-third of the global workforce by 2020, rate opportunities to learn new skills as a primary factor when choosing a new job. The workplace of tomorrow, therefore, will not only need to be age-diverse, but should also allow employees the opportunity to expand their skills as technology evolves.
Workplace collaboration has been transformed by technology. Over the past few years, technologies such as the SMAC stack (social, mobile, analytics and cloud) have enabled collaboration in near real-time. For a successful multi-generational workforce, collaboration is probably the most important aspect of the workplace. Millennials, who grew up interacting and sharing perspectives on social media, see collaboration as a primary driver when seeking employment. As seen in part 1 of this series, older employees tend to be the most engaged cohort in a workplace. With years of experience to draw from, they also make great mentors.
Business leaders can put this to good use by encouraging teams to be inclusive and age-diverse. Research has found that those who experience mentorship tend to pay it forward later in their careers. Through mentorship, older workers can pass on the soft skills they have picked up over the years. In the age of artificial intelligence, soft skills have gained importance. That Salesforce survey found that 59% of hiring managers believe soft skills such as creative thinking are critical, as they cannot be easily replicated by AI tools. Age-diverse teams also help businesses chip away at the problem of ageism as younger workers learn from their seniors. This could help businesses create a virtuous cycle of knowledge sharing that bears fruit in the long run.
Ageism is not just an organizational issue; it is also a societal issue, which makes it that much harder to tackle. The most commonly cited stereotypes about older workers include misconceptions that they are poor performers, hard to train, resistant to change, and expensive to keep onboard. These ideas tend to be hardwired into the system, and thus they easily percolate into the mindset and discourse at the floor level. Changing such thought processes takes time and effort, and should not be treated as gimmick to win brownie points in the media.
The upshot is that the effort of creating a successful multi-generational workforce must target the entire organization, and should be led by the top management. Some of the critical elements of this transformation include:
An understanding ofthe potential for age discrimination within the organization, and a directive to take corrective action.
A program to rewirerecruitment policies to focus on an applicant’s skills instead of other characteristics.
An initiative to create an organization-wide awareness campaign to change the existing mindsets of employees and build trust.
A willingness to promote and incentivize older workers to stay onboard (or rejoin the workforce) so that the organizational mix remains age-diverse and inclusive.
Looking into the future
There is a long way to go before multi-generational workforces become the norm. However, the fact that businesses are talking about it is a crucial step in the right direction. The idea that an ageing workforce is a burden rather than an opportunity needs to be put to rest. With the help of the right technological tools for collaboration, supported by policies encouraging an age-diverse workforce, business leaders can lay the foundation for tomorrow’s inclusive workforce.