The implications of an ageing workforce
I’ve been thinking a lot about this recently, and I believe there’s a profound shift happening in the workplace.
<p style="text-align:center;">The implications of an ageing workforce
<font size="5"><b><p style="text-align:center;">Is your workplace prepared for the impact of a changing population?
Introduction from Steve Butler
We're living longer. Here's the challenge
There's a profound shift happening in the workplace
I surveyed readers of our blog recently: 2/3 said their companies’ workforces were ageing - and that they had already seen, or expected to see, their work culture adapting as a result.
I’ve been thinking a lot about this recently, and I believe there’s a profound shift happening in the workplace.
It’s going to mean changes to the way you recruit, evaluate performance, remunerate your staff, and the kind of working hours that are considered standard.
It is a shift that, as an employer, is very much on my mind. And it’s one I believe all of us should be talking about much more. In this publication we’ve put together a summary of some of my recent thinking, so you can read at leisure.
And when you’ve had time to think about the implications, it would be great if you’d drop me a line to let me know your thoughts too, so that we can start shaping the future of the workforce.
Thank you
Steve Butler
People age 60 and over will soon outnumber children aged five and under.
World Health Organisation, http://www.who.int/news-room/fact-sheets/detail/ageing-and-health
Contents
What's in this publication?
We’re living longer. Here’s the challenge
A profound change is happening in the workplace - how does it affect you?
The demographic time bomb
The demographic time bomb is here - or is it? What does the evidence tell us?
How to manage the ageing workforce
As the workforce ages, balancing everyone's needs can be challenging.
The key to supporting older staff
How do you create a working environment in which diversity is genuinely respected?
Check your workplace age bias
When it comes to older people, stereotypes abound. But they have to be examined.
The benefit of an age-diverse workplace
As people move jobs, modern businesses face the danger of knowledge being lost...
We're living longer. Here's the challenge
A profound change is happening in the workplace - how does it affect you?
We’re living longer. Here’s the challenge
Watching my children and their friends think about starting their careers has been a real eye-opener.
Although perhaps I should rephrase that…
Even though they’re in their early 20s, they are not really thinking about starting careers at all.
Many are doing a second degree, even if they are not particularly academic. Their reasoning seems to amount to: “Why not?”
Others are planning to travel, or to spend a couple of years working shifts in a pub before they get a job they really want. I don’t mean to sound like an old fuddy-duddy, but it wasn’t like that in my day.
Everyone I knew finished their degrees, and started submitting CVs.
The number of 100-year-olds in the UK has almost doubled since 2002.3
This is just one sign of a profound change happening in the workplace.
It is a change that, as an employer, is very much on my mind.
And it’s one which I believe all of us should be talking about much more.
You see, as we live longer, people’s work patterns are shifting.
My children’s generation know that they might very well live into their 80s, 90s and even to 100.
Over 50s now make up nearly a third of the UK workforce, with the numbers of older workers steadily rising.4
They might be working, in some form or another, until they are octogenarians. So what’s the rush to get started? There is none.
As a CEO, I look at them and wonder whether, in a few years’ time, we are going to have trouble recruiting good young people….
…and what the other implications are for our workforces, when people start work later in life.
In some industries, there already appears to be a hiring crunch. Anecdotal evidence seems to suggest, for example, that a huge proportion of financial advisers are in their 50s or older¹, with a shortage of young people joining the profession.
Of course, industry-specific reasons may contribute to this, but I see it as part of a wider trend.
Meanwhile, at the other end of the spectrum, people are already working much longer than they used to.
Retirement ages are inching upwards.² Many people never really retire at all.
The bottom line is that as we live longer, our workforce is going to age, too.
And as an employer, that throws up both challenges - and many opportunities! As my own company has grown and we have hired or brought many more employees under our umbrella, I’ve come to realise that these issues are not theoretical.
They’re real, and they’re happening now. However, only 1 in 5 employers are discussing the ageing workforce strategically.4 So while I know that you are used to hearing from me about pensions, now I would like to broaden the discussion. In this publication, I’m going to consider how the workplace should manage these demographic changes, and look at the impact on employees and employers as the workforce ages.
¹ https://www.moneymarketing.co.uk/issues/12-may-2016/attracting-talent-where-is-the-data-on-young-adviser-numbers/
² https://www.gov.uk/government/statistics/economic-labour-market-status-of-individuals-aged-50-and-over-trends-over-time-october-2018
3 https://www.theguardian.com/society/2017/sep/27/rise-in-uk-life-expectancy-slows-significantly-figures-show
4 https://www.ageing-better.org.uk/news/uk-employers-unprepared-ageing-workforce
Have you noticed a shift in the age profile at your company?
If you've noticed a shift in the age profile at your company...
...what do you think will have to change the most at your company because of this shift?
- Working hours
- Recruitment
- Employee benefits
- Staff management
- Pay and performance
- Pensions and retirement
The demographic time bomb
The demographic time bomb is here - or is it? What does the evidence tell us?
The demographic time bomb is finally here.
And you can’t ignore it
I surveyed readers of our blog recently: 2/3 said their companies’ workforces were ageing - and that they had already seen, or expected to see, their work culture adapting as a result.
This includes changes to recruitment, performance evaluation, staff remuneration, and the kind of working hours that are considered standard.
So is the demographic time-bomb that experts have been warning about for so many years finally here – with severe implications for most companies?
Or is this anecdotal evidence which is not backed up in reality?
Flip the page to find out >>
What does the evidence show?
Our readers are right. There is no question that our workforce is, broadly, ageing.
In the UK, the number of people between the ages of 65 and 69 who are working doubled between 2001 and 2014.1
This is mainly because long-term, established employees have stayed on in their jobs. Meanwhile, people are starting work later in life as well.
In the US, the labour force participation rate for over 55’s has shot up since 2002. But over the same period, the rate for those between the ages of 16 and 24s has dipped significantly. It is no longer standard to start working at 18 and retire at 65. There has been a noticeable shift, as our adolescence is extended – and so is our working life.One obvious reason is simply that we are living longer and need to fund longer retirements.
According to the World Population Prospects, the number of over 60-year-olds is expected to double by 2050 and triple by 2100, so this need is only going to get stronger.
Persons aged 65 years and over in employment, UK, 1998 to 2018. Source: Labour Force Survey, Office for National Statistics
Reasons given for working beyond State Pension age in the UK, 2015. Source: Annual Population Survey, Office for National Statistics
Other factors
Recent studies suggest other factors are at play as well.
Employees educated to a higher level are more likely to prolong their working life.2 So are those who are healthier.3
And as companies adapt to this new reality, giving older staff more support, those staff are again likely to stay employed for longer.4
The bottom line is clear.
If you are part of that third which has not yet noticed a change in the age profile in your company, you might soon.
Look around you, at the employees sharing your office, milling around and grabbing coffee. What age range are they today?
Now project ahead 10-15 years.
You are quite a bit older….. And so are they!
Imagine that there were fewer people in their 20s and 30s, sitting at those desks. There are also far more people in their 50s, 60s – as well as in their 70s.
How would the changes in age affect the dynamics in your business?
How would changes to the age composition of your workplace affect the way you manage your staff?
How would it impact the kind of training you give them, the benefits you offer, the hours people work, the way people work together?
Are you ready to deal with all those issues?
Read on for practical suggestions to how you can actively manage the ageing workforce.
1 ‘Managing employees beyond age 65: from the margins to the mainstream?’, Lain & Loretto, 2016
2 ‘ An ageing world and the challenges for a model of sustainable social change’, Angeloni & Borgonovi, 2016
3 ‘Bounded choices in work and retirement in Australia’, Patrickson & Ranzijn, 2004
4 ‘Are all workers influenced to stay by similar factors, or should different retention strategies be implemented? Comparing younger and older aged-care workers in Australia’, Radford & Chapman, 2015
In the UK, the number of people between the ages of 65 and 69 who are working doubled between 2001 and 2014
‘Managing employees beyond age 65: from the margins to the mainstream?’, Lain & Loretto, 2016
Nearly a quarter of employers (24%) admit they are unprepared for growing number of older workers
The Centre for Ageing Better; https://www.ageing-better.org.uk/news/uk-employers-unprepared-ageing-workforce
How to manage the ageing workforce
As the workforce ages, balancing everyone's needs can be challenging.
We haven’t actively managed the ageing workforce – here's why it’s time to start
Some of the most talented leaders in our company were frustrated.
In their late 30s and 40s, they felt they had earned a seat at the top table. They were right – and they were ready for it.
But there were just 8 spots on our executive committee, most of which were occupied by equally talented and capable leaders – who were a generation older than them.
It didn’t seem fair that they would have to wait for someone to retire, in order for one of those spots to become available. So I disbanded the executive committee, replacing it with seven operational committees for different areas of the business.
Staff aged 60+ may have very different skills, expectations and interests to your millennial workers, and even those in their 40s.
That way, we were able to quickly involve more people in our leadership structure, and create a more diverse, multi-generational team at the top.
There is an important lesson every company can draw from this story.
As the UK workforce ages, you are likely to encounter this kind of dilemma more and more often.
Your older employees may to stay on board for longer, well past what was traditionally considered “retirement age”, and into their 70s.
Staff in that age group may have very different skills, expectations and interests to your millennial workers, and even those in their 40s.
Working together, there may be clashes and tension – not just over leadership positions.
What benefits should you provide? What kinds of working hours are appropriate? What pace of work? What technological skills should be expected?
Balancing everyone’s needs can be challenging.
There are also opportunities to consider.
You need to find ways to help everyone work together in a productive way – and in this way, gain the full benefit of a multi-generational workforce.
For example:
- How can you help your older workers transmit the knowledge and experience they have gained over decades to their younger colleagues?
- In turn, how can you encourage younger colleagues to share their own unique knowledge with older generations?
There are no easy answers.
But – as my experience with the executive committee shows – the key is to actively manage the issues around an ageing workforce.
The reality is that most companies today are barely thinking about them.
Yes, you might officially be committed to age diversity. And perhaps you have official policies around age discrimination.
But in many cases, these formal rules often amount to an insurance against litigation, and do not translate into meaningful practices within the organisation.
Research suggests that companies that do promote the employment of older workers often limit their recruitment to customer-facing or low-skilled jobs, and that discrimination continues to be widespread.
And engagement with the issues around the ageing workforce is often extremely superficial.
For example, even if you have equal opportunity rules in place, has anyone thought about training for your older workers…?
Or how to help your managers work with employees in very different age brackets…?
Has anyone considered how to build on the strengths of older workers?
If the answer to these questions is “no”, it is neither surprising nor unusual.
For many companies, this is still a relatively new area.
So how can you start preparing your company for the challenges (and benefits!) of an ageing workforce?
Acknowledge inter-generational tension when it happens, and deal with it. Do not allow conflict to bubble under the surface and fester, because it will affect your work environment.
If it seems likely that you will experience an increase in older workers and a decline in younger workers, develop good policy sooner rather than later.
At a minimum, employers should strive to be intolerant of ageism, offer flexible working conditions, take into account workers who have also become family carers (sandwich generation), and permit phased retirement.
But there may be many other sensible policies to help your workforce. Don’t wait until problems arise. Be proactive about planning, so everybody wins, including your staff - and your company.
As the workforce age profile shifts, balancing everyone’s needs can be challenging.
"Nearly a quarter of employers (24%) admit they are unprepared for growing number of older workers."
The Centre for Ageing Better, 2018
https://www.ageing-better.org.uk/news/uk-employers-unprepared-ageing-workforce
<p style="color:#ff1d46";>The key to supporting older staff</p>
How do you create a working environment in which diversity is genuinely respected?
The key to supporting older staff
“Can you put together a PowerPoint for our next team meeting, about last month’s sales figures?”
The employee suddenly looks anxious. “Uhm…. Is it really necessary… Shouldn’t we just do a verbal presentation…..? Lots of people will prefer it….”
Your staff member, in their early 60s, has never prepared a PowerPoint before. And they have no idea where to start.
When their younger manager realises what is really going on, they scoff inwardly at the older employee’s lack of technical skills.
They assign the PowerPoint presentation to someone else – “Don’t worry, I’ll take care of it” – and mentally dismiss the older employee as a “has-been”.
How do you ensure that your older employees are given the support they need to thrive in the modern workplace?
They don’t understand, or don’t care, that this is actually one of the most accomplished members of the team.
As the workforce ages, variations of this scene threaten to become increasingly common.
So how do you ensure that your older employees are given the support they need to thrive in the modern workplace – and that their potential to contribute is valued and recognised, as well?
The key is to create an environment in which diversity is genuinely respected.
I've already discussed the need for you to proactively manage your ageing workforce. You need to create policies which prevent discrimination against your older employees, and create an environment in which different generations can work productively together.
Only 12% of UK workers think older people are appreciated and respected at work
Canada Life survey
https://hrmagazine.co.uk/article-details/older-workers-not-supported-in-the-workplace
But policies, on paper, will make no difference. Not unless your team members have genuinely bought in to your vision of a company where people of different skills, abilities and experience work together, supporting each other and drawing on each other’s strengths.
That scenario I laid out earlier, of a company in which a younger manager dismisses an older employee because they don’t know their way around PowerPoint? That could easily happen in a company which is officially committed to “age diversity”.
But it wouldn’t happen in a company in which that was genuinely the prevailing culture. Making that happen is a big task. But it is possible. Over the past few decades, most companies have made enormous strides instilling a culture of gender and cultural diversity in their workplaces.
I’m not saying that all the work is done – far from it. But most companies have made a conscious effort to create workplaces in which women and minorities are celebrated and treated equally, and diversity is recognised as a net asset to the business.
The result is a big cultural shift.
Age diversity is rarely championed in the same way – but it could be.
Start by rolling age into the initiatives you run in any case around diversity.
And help your employees understand that there are enormous benefits to working in a multi-generational environment, just as working in a multi-cultural environment helps everyone.
Everyone has knowledge to share, with older generations retaining – for example – a lot of institutional and operational knowledge which would otherwise be lost.
Create cross-generational mentoring programmes to share that knowledge.
Intolerance of ageism should be a given, just like intolerance of sexism and discrimination against minorities is now a norm.
And help the generations working together see that they’re dependent on each other’s success.
Encourage them to work together in age-diverse projects, so they can develop trust and work together for a common goal. Team-based incentive and reward systems work particularly well.
Of course, none of this happens on its own.
The top layers of management must be absolutely committed to respecting age diversity and reaping its benefits.
This means proactively thinking about how you need to structure and change your business, to bring it about…
…So when an older employee confesses they have never used PowerPoint, the reaction is never eye-rolling and exasperation, but an offer of help.
Your younger employee knows that the older staff member has helped them navigate other issues in the past, because the information flows in both directions - and they are happy to reciprocate.
That is a workplace where staff believe that age diversity has intrinsic value.
Is age diversity championed at your company?
Check your workplace age bias
When it comes to older people, stereotypes abound. But they have to be examined.
Check your workplace age bias
Here’s a question for you.
What percentage of people between the ages of 64-74 have a social media profile?
The answer, which might surprise you, has interesting implications as our workforce ages….
Flip the page to find out >>>
Most people might assume that only a small minority of people in this age bracket are on social media. After all, social media is the preserve of the young(er), right?
Not so.
A report by Ofcom showed that in 2017, 48% of 64-74-year-olds were on social media.
And the numbers are rising extremely fast. 41% of people over the age of 75 were on social media in 2017, up from just 19% the previous year. It is safe to assume that the numbers have risen even further in the past year.
What this shows is that when it comes to older people, stereotypes abound.
But they have to be carefully examined, to see whether they have any basis in reality.
This is certainly the case in the workplace.
You see, the law doesn’t stop older people from working.
But very often, stereotypes do.
For example, there is a general perception that older workers are unable to cope with technology, or do not want to take part in technology training.
There is a general perception that older workers are unable to cope with technology, or do not want to take part in technology training.
Say one of your managers needs to send some of your employees on an Excel training course, and, looking at the candidates, rules out employees who are over the age of 60.
“They’ll find it too hard anyway.”
Or perhaps, as in the example I gave you last week, an employee in their 60s admits that they have never used PowerPoint.
The manager tells them not to worry about it – they will ask another employee to create the slide deck, depriving your older staff member of the opportunity to present to the team.
But just like older people are increasingly on social media, people between the ages of 55 and 64 are the fastest-growing users of IT.¹
They are often eager to use tech…. if only they are given the opportunity. It is possible they may need additional time to learn to use these tools proficiently, but this is quite different to “unable to cope”.
Similarly, older workers are often typecast as resistant to change. There is often a perception that they do not like their job descriptions to evolve, and do not like change within the business.
This positions them as obstacles in a fast-changing business.
Is this really true, though?
Or are older workers simply more cautious about change…..?
Over the years, they may have seen organisations go through evolution after evolution. They may have been disappointed in the past.
Or maybe they are worried about losing control, or losing face if their new duties are less suited to their abilities?
Being cautious does not imply an inherent resistance to change. It simply indicates that older workers may need more encouragement to embrace change.
Did you know that the average age for successful entrepreneurs is between 42 and 47?
https://hbr.org/2018/07/research-the-average-age-of-a-successful-startup-founder-is-45
The problem is that these stereotypes are not only often inaccurate…
…but as long as they persist, they can stop you from realising the benefits of an age-diverse body of staff, and from getting the best out of your ageing workforce.
People within your organisation will shy away from entrusting important tasks to older people and will fail to see all the many ways that they could contribute, and support younger workers.
So managers need to overcome any tendency they have to stereotype.
The first step is simply to raise awareness that they may be influenced by unconscious biases around age.
The more aware they are, the more they will be able to self-correct their thinking – and behaviour.
Then re-enforce this with formal policies.
The clearer you make it that in your company, employees of all ages are to be treated equally….
…and the more you insist on these policies being implemented…
…the easier it will be to entrench a culture where younger workers think of their older peers realistically, generously and supportively.
¹ Barrett, J. & Bourke, J., 2013. Managing for Inclusion: Engagement with an Aging Workforce. Employment Relations Record, 13(1), pp. 13-24.
The benefit of an age-diverse workplace
As people move jobs, modern businesses face the danger of knowledge being lost...
The benefit of an age-diverse workplace
Every morning, Christine Lucas wakes up with no memory of the day before.
No matter what she did… Who she spoke to…. What she watched and what she read, she has no memory of it.
It’s a blank slate.
So she needs to find alternative ways to remember things. She starts recording a daily video and writing a diary, so she can retain her knowledge from one day to another.
That’s the basic premise of a psychological thriller that came out a few years ago, called Before I Go To Sleep. (It was made into a movie with Nicole Kidman as well.)
But in a way, it reminds me of the modern workplace too…
With the average UK worker changing jobs every five years on average, modern businesses face a problem retaining the knowledge which is lost when people move on.1
You see, modern businesses and their employees also have a problem retaining knowledge.
There are no longer jobs for life. People change jobs more frequently than they used to, taking with them all the knowledge they have gained, both about how to do their job and company history.
That can be a big loss to an organisation, particularly when staff turnover is high. Once upon a time, the knowledge and skills you gained in university were still relevant for decades. Nowadays, given the speed of technological and societal change, the skills required to do a job are constantly evolving.
So the way things were done just a few years ago might be easily forgotten.
People change jobs more frequently than they used to, taking with them all the knowledge they have gained.
And because the knowledge required to do a job changes so frequently, it no longer always makes sense to promote those who have the most experience, as might used to happen.
Increasingly, teams are headed by people with the best managerial skills. Sometimes they are even professional managers.
So teams can no longer necessarily look to their bosses to teach them the skills they need to do their job.
It’s as if we wake up every few years, not exactly blank slates like Christine Lucas – but with very short memories.
You might say that the “half-life” of knowledge is shortening – that is, less and less time elapses before knowledge in a certain area becomes irrelevant or just plain wrong.
So just like Christine Lucas, we need to find new ways to pass on knowledge, both so we can learn new things quickly…
...and so we can retain memories that are otherwise in danger of being forgotten.
That is why, as our workforce ages, transferring knowledge from one generation to another will become a key activity.
Older workers may look to younger workers to help them keep up-to-date with modern skills and technical knowledge….
….although, realistically, continuing education will be a priority for everyone, regardless of age.
When staff move jobs, businesses can be left hunting for lost knowledge
But by the same token, younger workers will look to older workers for their organisational memory.
Having people around with longstanding client relationships, who can remember best practices developed over years and who can provide some continuity with the past will help businesses function smoothly at a time of rapid change.
Older workers may also have experience that younger workers simply lack. No matter how up-to-date their technical skills are, they will have tacit knowledge built up over decades, which can benefit their younger colleagues.
So while some organisations may prefer older workers to retire early, they should carefully consider whether they really want to give up so much human capital.
Wouldn’t it be better, instead, to create mentoring programmes, whereby mature staff could work side-by-side with younger employees, and share their insights?
Mentoring does not necessarily have to be about direction – it could be about cooperation, and be fostered informally through social networks, as well.
Or perhaps it would be beneficial to transition mature workers to other areas of the organisation, which could take advantage of their expertise and knowledge?
Or to create forums and platforms, where knowledge can be exchanged and flourish?
It is paradoxical, but the faster our knowledge evolves, the more important it becomes to learn from people who have ‘been around the block’ several times.
It is just one of the many benefits of a genuinely age-diverse workforce…
Developing mentoring programmes and other forums can help to facilitate the sharing of knowledge between generations
1https://op.lv.com/about-us/press/article/job-for-life
Making use of the experience and knowledge of older workers is one way to prevent organisational knowledge being lost down a black hole...
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What's next?
The workforce is ageing - but there is also a new cohort of 'digital natives' joining the workplace to consider
The workforce is ageing. But there is also a new generation of 'digital natives' joining the workplace
As older and younger generations increasingly work together, there are many ways in which worlds can collide in a multi-generational workforce. These kinds of clashes are only going to increase as the workplace becomes increasingly age-diverse.
There is much to be said about the challenges and benefits of integrating millennials into our companies. Keep an eye out for our next publication, focusing on the younger generation.
In the meantime, follow Punter Southall Aspire on LinkedIn, where we'll be sharing our latest thinking on the multi-generational workforce.
Thanks for reading!
