As the impact of the ageing workforce increases, business leaders will look to HR for sustainable age management solutions. Margaret Seaberg explores ways to help your business boom against the backdrop of the most radical demographic shift in history
As the impact of the ageing workforce increases, business leaders will look to HR for sustainable age management solutions. Margaret Seaberg explores ways to help your business boom against the backdrop of the most radical demographic shift in history
The ageing of the Australian population presents an unprecedented risk for organisations, as millions of baby boomers head into retirement. The social and economic ramifications of an ageing workforce are set to impact businesses at every level.
Mitigating the risks is a challenge that has landed squarely on the shoulders of the HR profession, providing a unique opportunity to take the lead in providing solutions that align with business objectives and enhance organisational culture.
When Minister for Employment and Workplace Relations, Kevin Andrews, wrote to the Chairmen of Australia’s top 500 companies last year, the ageing workforce hit the corporate agenda. In his letter he urged employers to examine the age profile of their organisation, determine workforce projections for the coming five years and consider policies concerning the retention and recruitment of mature age workers.
Reiterating the economic risks, Minister Andrews encouraged employers to consider a workforce of varying ages which can “deliver real benefits to businesses – providing ongoing skills and knowledge, continuity in periods of organisational change and reflecting the diversity of customers”.
A wealth of research from around the globe supports the notion we are heading for the ‘demographic cliff’, foretold by Treasurer Peter Costello and a slew of economic commentators over recent years. The combination of declining fertility rates, increased longevity and mass retirement of the baby boomer generation has the potential to wreak chaos for unwary organisations.
While many companies have identified age management as a top five business priority, the challenge for HR is to take the business past the identification of the problem to develop effective solutions.
Start with the facts
Understanding the business impact is the first step. Professor Louise Rolland, CEO of Business Work and Ageing at Swinburne University, carries out organisation-wide audits as the initial step in supporting businesses to address age management issues.
“Unless an organisation understands age in the context of the workforce structure and people dynamics it cannot effectively target age management approaches. Strategic HR processes must be underpinned by an evidence-based approach,” she says.
An age audit profiles the structure of age in an organisation and benchmarks against industry and population profiles providing immediate insight to age groups that are over or underrepresented in an organisation. Rolland believes a thorough audit will reveal the challenges an organisation face as workforce growth slows and the proportion of older to younger workers increases.
“It establishes a baseline so that any change can be measured over time and is a terrific tool to engage other stakeholders in considering the structure and cultures of age present in the organisation,” she says. “It also highlights age-related trends in recruitment, retention, absenteeism, injury progression and participation in learning and development as well identifying any gaps in the reporting capabilities of the HRIS.”
Engage the business
Armed with the results of an age audit, the challenge of engaging the business becomes easier as the level of business risk and the financial imperatives can be more clearly articulated and quantified.
“A key challenge is to gain the buy-in from leadership so that adequate resources flow to support the age analysis and development of an age management approach integrating the people management and workforce planning priorities of the organisation,”Rolland says.
With a passionate HR team driving the strategy, AMP is at the start of its age management journey. HR director, Sharon Davis, is working to clearly understand the capabilities required for AMP to deliver its business strategy and determine the labour market to meet those needs.
Davis sees her team playing a critical role in raising the level of education and awareness in the business in relation to the ageing workforce.
“Educating the business on emerging workforce impacts such as ageing population and war for talent brings the external context to the demand-supply equation. Clearly, mature workers are a critical part of the workforce, we need to access,” she says. “Our biggest challenge is to educate our business on the value of diverse teams and skill leaders in how to lead and manage teams of diverse people including more mature workers.”
Successful education and awareness programs require more than a newsletter story or poster in the tea room. An integrated internal communication plan linked to business objectives is a powerful tool in helping create a culture that values maturity. Raising awareness through education sessions and workshops for the HR team, senior leadership and line management adds strength to the case for change.
For example, a company might uncover through their age audit and resulting workshops a need to attract more mature talent to a particular business area to remain sustainable in coming years. This seemingly simple conclusion can impact multiple organisational layers leading to a review of recruitment practices, training, remuneration, OHS, flexible work options, internal culture and even a company’s external image.
With time-poor executives to deal with, short, sharp structured workshops, which are facilitated by subject matter experts and driven by HR, can effectively educate and explore risks and challenges. Action planning workshops ensure appropriate stakeholders are involved and responsibilities, priorities and next steps in the age management journey are established.
Walk the talk
Efforts to position a company as ‘age friendly’ risk being met with scepticism if key stakeholders have not been engaged. Internal and external messages and activities need to be consistent and clear.
A critical step is to seek the feedback and opinions of existing mature age workers to give credibility and grassroots input to any age strategy. Employee focus groups and surveys can uncover issues and prompt reviews of HR practices as well as highlight communication issues such as the language used in the organisation, the success of intergenerational communication or the portrayal of age (for example, marketing material and internet sites exclusively featuring 20 and 30 year olds.)
Internally communicating the risks and profiling initiatives lays the foundation for greater understanding of the business imperatives for action.
Continue the knowledge
As baby boomers retire and exit the workforce, so too will a wealth of knowledge as the investment companies have made in years of professional training and development exits with them. A 2004 survey by mature age workforce consultancy SageCo showed an alarming 90 per cent of retiring professionals exit organisations without transferring knowledge prior to leaving.
The most valuable corporate knowledge lives in the heads of employees – tacit knowledge such as lessons learned, successes, relationships and of course experience. This information does not sit in folders, business card holders or archive boxes and is rarely captured in oftentimes cumbersome knowledge management systems.
Exit interviews and the baton approach of succession planning are not enough to mitigate the risk and stem the tide of knowledge loss. Key sages or ‘keepers of company wisdom’ pose the greatest business risk as they exit. Implementing systematic, customised knowledge continuity programs to transfer this specialist knowledge from these individuals back into the wider organisation can save time, money and reduce costly mistakes in the future.
As part of AMP’s age management strategy, key individuals are being identified for knowledge continuity programs. “We recognise that a lot of vital business knowledge is held by our mature workers,”says AMP’s Sharon Davis.
For example, Bruce Kennerson was employed by AMP for 40 years. Kennerson participated in a six-month program to systematically capture and transfer the knowledge gleaned over his years of service. The program included stakeholder workshops, one-on-one coaching and the development of a ‘knowledge capsule’, capturing critical knowledge to ensure Kennerson’s team could continue to meet the needs of their planner network and customers. ‘Knowledge continuity experts’ drove the process and ensured the project recognised Kennerson’s outstanding service to the company and provided public acknowledgement of the unique insights and wisdom he held.
Create opportunities for mature age workers
For employees approaching retirement, the future can appear daunting. As the population lives longer and enjoys better health, the prospect of actively living a third of one’s life in retirement has become a reality.
Once the overseas holiday is done and rounds of golf played, a life of ‘full-time leisure’ can offer limited satisfaction for those who have not explored ways to successfully replace the function of work and the sense of accomplishment it can provide. Organisations that promote a culture where discussing retirement intention marks an employee as ‘on the shelf’ may pay a high price. In such circumstances the choices an employee makes can be detrimental to the business including:
• To declare retirement intention as late as possible, making the successful transfer of knowledge and wisdom impossible.
• To leave the company without exploring flexible work options, which could have resulted in retaining the employee longer.
• Remaining in the company for fear of the ‘black hole’ of retirement, leading to decreased motivation and decline in productivity.
Research by SageCo in 2004 revealed 76 per cent of employees approaching retirement would have embraced the option of a phased retirement and 81 per cent of those already retired would have welcomed retirement transition assistance. Providing employees with holistic retirement transition programs which explore not only ‘third age’ career options and finances but also delve into health, relationships, dependent care, image and life goals can result in wins for companies.
In addition to addressing corporate social responsibility and potentially enhancing a company’s image as an employer of choice, the benefits of providing programs for mature employees include the attraction and retention of mature talent, increased productivity and the sharing of vital skills, experience and knowledge.
The risks of inaction
Rolland’s warning to corporate Australia is a dire one. “Organisations who do nothing face the loss of people, knowledge and experience as the baby boomers retire. They will find it increasingly difficult to compete for the most skilled and appropriate workers as others target their employment offer to attract and retain people across age groups and have a focus on encouraging skill currency, motivation and attachment of people in the later stages of their working life,” she says.
The HR profession is uniquely positioned to ensure the warnings to business are heeded. As Treasurer Peter Costello said: “Demography is destiny –this is set in stone. The only question is how we deal with ageing of the population.”
Getting it right
Taking the lead in the mature age worker space is a natural progression for AMP, according to Davis. “We are at the start of a journey. We are not yet best practice in this space, but we have a natural alignment with our business goals; we provide financial planning and products to help people enjoy the life [and retirement] they want. We are playing an active role in educating Australians about superannuation and retirement savings,” she says.
AMP’s public commitment to looking forward is echoed in their age management strategy which includes:
• Comprehensive age audit of the organisation.
• Knowledge continuity programs for key sages.
• Internal education and awareness campaign.
• Aligning workforce with ageing customer base.
• Retirement success coaching for mature staff.
• Sponsorship of www.adage.com.au, an online database of mature age workers and companies who seek their services.
• Preparing the business to meet the challenge of a shrinking labour market.
Margaret Seaberg is a founding director of mature age workforce consultancy SageCo. Email [email protected].
