Strategies for Dealing with the Challenges and Opportunities of America’s Aging Workforce
Jan 24, 2019
Most employers are not facing labor shortages—at least not yet—so few have begun to think carefully about the problems and/or opportunities associated with the aging American workforce (AWF). But according to the U.S. Bureau of Labor Statistics, 17% of the U.S. workforce will be 55 and older by 2010.
And it is estimated that nearly 10,000 Americans will turn 65 every day by 2012. Simply put, there will be fewer, new (i.e., young) workers available to replace older workers as they transition into retirement. Critical shortages of qualified workers are expected. It’s time to determine your organization’s readiness to cope with the realities of both an aging workforce and a shrinking, youthful labor pool.
How Will the AWF Affect Your Business?
What must employers do to recruit, retain, reenergize and address the needs of older workers? Their sheer numbers, knowledge and experience make older workers a potentially rich resource in the workplace of the future. Is the workplace of the future adequately prepared to engage and utilize this reserve of knowledge and experience? And what about the knowledge and leadership gaps that may accompany a mass exodus of experienced workers? One obvious solution is to address the coming shortages by strategically harnessing the knowledge, skills and abilities of older workers.
The AWF Leadership Pulse Study
To understand some of these issues surrounding current AWF effects and readiness to address future AWF concerns, our researchers conducted an extensive Leadership Pulse study focusing on the AWF. The 369 respondents included general managers to C-level executives at an average age of 51.9 years. Of the respondents, 54.4% were male and 45.6% were female. Company sizes ranged from “less than 100” (51.1%) to “more than 25,000” (7.8%).
One theme of the study questions focused on the effects of the AFW, such as recruitment, talent quality, organizational culture and competitiveness. A second theme focused on the degree of organizational readiness to recruit, retain and reenergize older workers.
The results indicated that nearly twice the number of respondents (43%) report that an AWF will affect their organizational culture than those who did not (24%). And while 42% felt the AWF would affect the quality of their talent, 26% reported little or no concern of this.
Respondents were split equally on their likelihood to report a high degree of concern for the effect of the AWF on their firm’s ability to compete or recruit within their industry. These results suggest that leaders understand that an AWF will have some kind of impact on their organization’s culture and the quality of available talent.
And after reviewing the qualitative data, or open-ended comments, we identified three major areas of concern:
1. Culture Change
While 43% of respondents indicated that the AWF will have a strong effect on their company’s culture, some view this as a strategic opportunity to reshape their organizational culture in a new and desirable direction. For example, one respondent wrote, “An aging workforce has the tendency to lock a company into a culture and way of doing business that can be stable but blocks new thinking and the evolution that all companies need to make.”
Another respondent indicated that “the large turnover of hourly personnel will give us the opportunity to change the culture for the better at some of our locations.”
These comments are in agreement with many organizational researchers who suggest that the fastest way to change an organization’s culture is to replace current employees with “new” employees who already possess the values, beliefs and attitudes that align with the desired culture.
2. Knowledge Gap
As older employees leave, their talent, knowledge, deep relationships and extensive, on-the-job training exits with them. These are elements that simply cannot be replaced through the hiring of recent college graduates.
As one respondent indicated, “The ‘graying’ of the workforce has many seen and unseen consequences that will take a heavy toll on corporations and industries that fail to recognize and understand it. You can NOT replace a valuable senior employee with two June grads and call it even…There is knowledge and practicality that can ONLY be gained ‘on-the-job’ and that point can not be over emphasized.”
3. Leadership Gap
Respondents were also concerned about the loss of leadership knowledge, skills and abilities. However, as the following comment suggests, some leaders view upside of the situation: “The upcoming retirement of much of our upper and middle management will create a gap in leadership but will also bring a welcome opportunity for new leadership,” states one respondent.
Even in the face of legitimate concerns, there appears to be some consensus that opportunities are couched within the realities surrounding an AWF. While respondents report concern over the AWF’s effect on talent and leadership, the concern is intermixed with the understanding that this type of situation offers opportunities to enhance leadership and improve the level of talent within their organization.
The survey results, and common sense, tell us there is not a one-size-fits-all-solution for the realities of an aging workforce. However, there are some strategies that can address specific organizational needs and help employers take advantage of the various opportunities the AWF has to offer. Following are some starting points to spur dialogue and positive actions within your organization:
Smaller companies especially may want to retain valuable employees through the creation of a consulting relationship. Here, a key employee does not exit permanently but is asked to guide newer members throughout phases of a project or assignment. In this situation the knowledge-rich employee can pass along critical knowledge on an as-needed basis.
Create a formal plan that addresses the expected losses of key employees throughout the organization. The key point here is the need to understand what types of organizational value older workers possess (e.g., leadership skills, client relationships, etc.), then, figure out how to transfer these to the individuals who are expected to step into key roles. A structured mentoring program can help accomplish this.
If experience and in-depth knowledge are important attributes in your industry, implement a selection system that will capture these skills. For example, design selection tests to measure content knowledge and preparedness for critical incidents. Use questions that require behavioral examples of success in pertinent situations, then carefully review the responses to match appropriate candidates to specific vacancies within the organization.
Whether desirable or not, a large influx of new employees can potentially change the cultural underpinnings of an organization. So it’s important to understand your current culture and assess if a shift in basic values is necessary to help your business. If a planned change will benefit the organization, then selection procedures can help increase the likelihood of choosing the employee attributes that will foster the new cultural values.
- Start an AWF Dialogue
Although these suggestions are far from exhaustive, they offer a starting point to begin a dialogue with organization decision makers. Keep in mind that all plans designed to address AWF issues require a high degree of concerted effort. The key component in planning an intervention of any type is the need for a highly efficient communication system. Without a means to gather data and information in an efficient and ongoing manner, well-intentioned initiatives are unlikely to succeed. However, once you open up the lines of communication with fellow team members, create a strategic plan and take action, you will be able to take full advantage of the many opportunities America’s AWF has to offer.
For more information, or if you are interested in participating in the Leadership Pulse study’s ongoing research, contact Dr. Welbourne at email@example.com Or you can sign up directly at http://www.umbs.leadership.eepulse.com/signup.html