How will companies deal with a growing number of workers over 65?

Is 65 the new 45? Businesses will need to have a new approach, as the over-65 labour force is set to surge in the next three decades.

Businesses are hesitant to hang onto older workers. Why?

Across the world, the over-65 labour force is set to surge in the next three decades. As Baby Boomers, Gen X and even Gen Y age, it’s unlikely that government and private pensions will be enough to fully fund their retirement.

At the same time, businesses will be confronting a shrinking pool of workers aged 25 to 55, relative to the size of the population. The obvious solution is to start hiring and holding onto older workers in greater numbers, yet businesses in many countries appear reluctant to do this. How do you change that?

Ian Yates AM

Chief executive
COTA Australia

Ian Yates AMAny shift in the structure or make-up of your labour market (internally or externally) means asking yourself, “Do we need to change the way we do business if the mix of our people is changing?”

Start by doing your homework.

What do you really know about older workers? There are lots of myths and stereotypes. Actively learn more about this group, who will become increasingly important to you.

Investigate what they have to offer – you may be surprised. Also investigate how their needs may vary from people in other phases of life.

What will an increase in the proportion of older workers mean in your firm? Are there skills development implications? Will there need to be changes in work organisation, work processes or the physical workplace? Might it change your workplace culture?

You will need to know how to attract and retain older workers, because there will be more of them and less young ones. Do you have the right HR policies and practices, job designs, incentives?

Get to work right now on building or strengthening a productive intergenerational workplace – one that recognises and responds smoothly to the different life stages of employees.

Related: Why ageing is the next frontier

Flexibility and adaptability will be key features of your approach, not “this is how we do things here”.

Increasing numbers of older people in the workforce is just another way that workplaces more and more reflect the broader society. Firms with business models and strategies that recognise this will have a headstart on competitors that don’t.

Leanne Cutcher

Associate professor
School of Business, The University of Sydney

Leanne CutcherIf organisations are to attract and retain the best and brightest older workers then they are going to have to revamp their performance management systems. Too often being a high performer is equated with drive, ambition and a willingness to take the next step up the career ladder.

There are other ways of being a high performer – particularly for those individuals who’ve been in the workforce for a long time.

My research found that older workers valued the opportunity to share their knowledge, mentor their younger colleagues and be recognised as subject experts. Their managers acknowledged the valuable contribution these older workers made, but they found it impossible to formalise that recognition.

“Mentorships ... allow knowledge to be transferred to younger workers.” Christine Wright

The performance management systems were geared to reward individuals who wanted to progress through the organisation, not those who were content at their current level. Rather than see this contentment as a positive, too often organisations interpret it as employee disengagement. They couldn’t be more wrong.

In a large engineering firm I researched, the German phrase “alter weiser” (wise old person) was used to describe colleagues who brought years of experience to their role and were willing to share that knowledge. Their younger colleagues held them in high regard – not surprising, given the role they were playing in helping those younger colleagues look good and achieve their career goals.

Organisations must structure their performance criteria to reward employees who wish to contribute their expertise without necessarily wanting to ascend the management pyramid.

Christine Wright

Managing director, Asia

Christine WrightThe workforce is ageing in many parts of the world, but perhaps none more so than in Asia. For example, in China those aged 60 or over will number 487 million by 2053, and in Hong Kong the number of people aged 65 and above will surge to 2.6 million by 2041.

With people remaining in the workforce longer, it’s important to put age-friendly recruitment practices in place. This includes removing age-related language from job descriptions, advertisements, your website and social media posts.

Another step is to introduce flexible working options. But don’t assume your mature-age workforce wants to access them right away! Instead, talk to each person to determine their needs.

You should also continue to train and develop mature-age workers, who are just as willing to learn new ways of performing their job as other generations.

“Older workers valued the opportunity to share their knowledge... and be recognised as subject experts.” Leanne Cutcher

The elephant in the room is how to balance an ageing workforce with the continued development of new entrants to the labour market. This is a unique challenge as we must not restrict access to young talent who want to develop their career, particularly in rare and high-skill roles.

That’s why mentorships are an important step in dealing with older workers, as they allow knowledge to be transferred to younger workers, who can then gain the skills and experience necessary to replace the ageing workforce when they do eventually retire.

The challenge is striking the right balance between retaining highly valued and experienced older workers, and recruiting and developing your future talent pipeline.

The experts

Ian Yates

Ian Yates is the chief executive of COTA Australia, the national peak body for COTAs (Councils on the Ageing) from each state and territory of Australia. Yates serves on a variety of federal government and aged care sector national bodies, and is a member of the advisory board of the ARC Centre of Excellence in Population Ageing Research. 

Leanne Cutcher

Leanne Cutcher is researching employee and customer responses to management strategy in the for-profit and cooperative sectors. Her work has been published in leading management and marketing journals. Her current major research project, “Managing Age in Organisations”, explores the management of older workers. The project aims to identify the negative consequences of mismanaging age, and to develop effective employee strategies.

Christine Wright

Christine Wright was appointed as managing director, Asia, for recruitment firm Hays in April 2012. She is responsible for the day-to-day management and growth of Hays in Japan, China, Singapore, Malaysia, Hong Kong and India. Wright was managing director of Hays in Japan from late 2009. She has also played key roles in the Hays’ business in Australia and the UK.

This article is from the June issue of INTHEBLACK

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