December 18, 2019
December 18, 2019
By 2030, the number of employees in the global workforce aged 50 to 64 is projected to increase by 15 to 30 percent. Companies thus face a critical challenge: How can they balance automation and digitalization ambitions with the growing societal demand to help ensure adequate social protection and well-being for older workers?
For example, a recent report from Marsh & McLennan shows that the issue is particularly pressing given that 50 to 80 percent of tasks done by older workers are at high risk of being replaced by new technologies.
Companies often view the aging population as a multi-faceted challenge. A rapidly aging workforce, projected increases in healthcare costs, and a perceived shrinking talent pool are just three of the issues corporate leaders must manage. The terms used to describe this expanding demographic group, such as “silver tsunami,” “silver wave,” or the “grey economy,” often reflect a negative view of this demographic shift.
In organizations’ quest for higher productivity and efficiency—via automation and digitalization or otherwise—older workers and their valuable experience are underappreciated, if not overlooked entirely. According to the World Economic Forum’s 2016 Future of Jobs report, only 4 percent of respondents planned on investing in experienced workers as part of their workforce strategy for the future even as 65 percent reported that they planned to invest in reskilling current employees.
Reframing this demographic shift highlights that an older workforce is, in fact, an elegant solution to both a talent shortage and a loss of institutional knowledge triggered by mass retirement. Further, with the expansion of the longevity economy, denoting economic activity driven by those aged 50 and above, retaining older workers ensures that companies understand this new market and stay relevant in it.
The question, then, is no longer about why companies should value and retain older workers, but how companies can build a comprehensive strategy around these workers. Three key steps can help organizations as they begin building this strategy:
The first step to building an older worker strategy is to recognize the value that older workers bring to an organization, namely their extensive experience and rich industry knowledge. Reframing “older workers” as “experienced workers” puts a focus on these qualities. This shift goes beyond the semantics—it precipitates a change in perspective away from the popular misconceptions of experienced workers as being more costly, less productive, and less able to learn new technologies. Indeed, research has shown that experienced workers have many of the qualities that will be in high demand moving forward, such as verbal and social skills, industry experience, innovative thinking, maturity, emotional stability, and good judgment in decision-making.
Tapping into the experienced workforce can also help address rising concerns of a shortfall in talent. More than 70 percent of executives predict significant industry disruption in the next three years, citing talent migration as their main concern among the socioeconomic forces.
Companies today face mounting pressure to constantly innovate and maintain a competitive edge. In the quest for greater productivity and efficiency, companies will need to effectively deploy new technologies and digitalize. It would be a mistake, though, to assume this process is antithetical to retaining experienced workers.
Consider the prospect of achieving a healthy balance between experienced workers and technology: Here, robots and humans would coexist and complement each other at work, as opposed to robots replacing the existing workforce. Such a balance is already being struck in Germany at BMW’s largest European factory, where experienced workers work alongside tabletop robots that assist them in repetitive or physically demanding tasks. The company adopted this combination of robots and humans in response to the increased demand for customization and individualization, which requires a more sophisticated human approach rather than a fully automated process.
Such a balance can only be achieved through a carefully planned process of integrating technology into the workforce, which involves redesigning both jobs and talent models.
Job Redesign: Technology is an enabler for change. Executives should begin by identifying the goals they want to achieve before leveraging technology to enable them to happen. Job redesign and augmentation will then require breaking down these goals into smaller tasks to determine the most appropriate combination of automation and human skills based on technology implementation.
Job redesign also entails looking at what conditions are needed to best support experienced workers in adapting to these technologically enhanced jobs. Analyzing the tasks in each job, for example, can illustrate where investments are needed to provide experienced workers with the skills to succeed in jobs that are revised or altogether new.
Talent Model Redesign: Organizations also need to explore new and innovative talent models, both to optimize costs and to offer a more attractive employee value proposition for experienced workers. For example, the rise of the gig economy has brought much flexibility and mobility to the workplace and has presented itself as a candidate for the talent model of the future.
The attractiveness of a gig economy model, however, is hampered by structural drawbacks such as the lack of benefits and career development for gig workers, making the arrangement unsustainable in the long run for the experienced workforce. Redesigning talent models will thus require overcoming such challenges, not only in the gig economy but also in other new employment arrangements.
While job and talent model redesign are critical to fully leveraging a future-ready experienced workforce, they are not enough. These procedural elements must be complemented by an inclusive organizational culture that values experienced workers. This requires companies to have a clear vision, robust stewardship, effective communication and strong accountability from both the leadership and the board, and finally, a strong suite of age-friendly policies implemented across the organization.
Given the parallel trends of aging and automation, forward-looking companies should look to fundamentally integrate technology into their business models while at the same time empowering their experienced workforce. Societal pressure to take care of experienced workers aside, achieving optimal growth requires that corporations refresh their workforce strategy to include experienced workforce in the future of work.
Leslie Chacko is a managing director at Marsh & McLennan Cos. and focuses on the impacts and application of digital and emerging technologies. He was a coauthor of the recent NACD and Marsh & McLennan report Governing Digital Transformation and Emerging Technologies. Patty Sung, principal at Mercer, is one of the founding members of Mercer’s Innovation Hub, based in Washington, DC.
To learn more, see the Marsh & McLennan’s report The Twin Trends of Aging and Automation: Leveraging a Tech-Empowered Experienced Workforce at MMC.com.