Published in The Telegraph Business Club June 2007
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Generating competitive advantage through older workers - How to pre-empt the tipping point
by Dianne Bown-Wilson
The demographic figures are stark and unchangeable. The UK birthrate has long been declining, longevity is increasing and within the next seven or eight years we will see a situation where the UK population has more over 65s than under 16s. In order just to maintain the current level of economic output the Government has estimated that 1.3 million people are needed to enter the workforce, and – immigration and question marks about skills aside – they just aren’t there.
At the same time, attitudes to employment are changing. Research shows that younger people now primarily adopt a ‘work to live’ approach to their careers characterised by dipping in and out of the workforce and frequently changing employers as opportunity and circumstance dictate. Generally, they no longer anticipate linking their progress and aspirations to one or a few main employers throughout their working lifetimes. Although hardworking, ambitious and ‘better qualified’ than their older colleagues, they’re increasingly throwing that generation’s traditional ‘live to work’ attitude out of the window in the pursuit of travel, work-life balance and self-realisation.
What all this adds up to is that, whatever your sector, size, or nature of business, there aren’t - and increasingly won’t be - enough skilled young workers to go round. In some industries, for example, building and construction, this lack already is being keenly felt. Others, such as the professions, are still able to attract candidates through offering levels of remuneration and benefits from an early age which would have been unthinkable twenty years ago. Yet others, such as marketing and IT claim they ‘aren’t bovvered’ as they have always had a cut-off date of 40 something, even though they too are starting to realise that the calibre of people coming through, and prepared to stay, isn’t what it was.
Racing towards the tipping point
Malcolm Gladwell, in his book The Tipping Point, analyses how some ideas, trends and behaviours cross a threshold, ‘tip’ and take off, spreading like wildfire before eventually becoming recognised as a ‘phenomenon’. Certainly in respect of the future workplace and the role of older workers, everything is increasingly moving towards such a tipping point, to an extent where before too long the majority of employers will be scratching their heads in puzzlement and wondering ‘Why didn’t we see this coming?’
So what’s going on? Well, at present, in addition to the situation outlined above, research shows that:
- The majority of workers over 50 either need to, or want to keep working in some form, past traditional ‘retirement age’.
- They want to achieve greater work life balance through working flexibly.
- The 2006 Age Discrimination legislation has extended statutory retirement age and enabled older workers to request the right to continue working past that date.
- Advances in technology have made worker location less of an issue than in the past, enabling home or remote working, and multi-site working.
However, research also highlights that the majority of employers have done little or nothing to change their employment policies and practices in order to adapt to and benefit from these changes. As a result, many highly skilled older workers still retire completely and abruptly, taking with them valuable skills and knowledge which companies have done little to extract from them or encourage them pass on.
A strategic and managed solution
The ideal way forward is for employers to adopt a transitional approach to managing the working life of their employees, particularly in their latter years, an approach which balances both employee and employer needs. This involves:
- Recognising that the needs and aspirations of each individual are different at each age and stage of life.
- Being able to establish clearly what each individual wants, and mutually designing individual ‘work plans’ aligned to the needs of the business
- Creating flexible working packages – in terms of both time and location.
- Providing training and support for employees to help them understand and manage such aspects as financial planning for the future (this ideally should start from a very early age).
- Encouraging continuous learning and development, regardless of age.
Doing this will mean employers thinking strategically, acting differently and being prepared to take a few (minor) risks. In broad brush terms, they will need to rethink:
- The work that needs to be done in order to achieve desired outputs, regardless of how the workforce is organised. This means analysing where the value lies in what the business produces and whether the available resource - current and future -will be sufficiently fast moving and flexible, in the face of inexorable change.
- The skills and knowledge required of the workforce regardless of age, seniority, employment status. Ultimately this may involve developing individuals and teams that operate outside of traditional ‘departmental’ or or ‘functional’ boundaries.
- Designing a hands-on, proactive and transparent management model that focuses on directly and personally engaging, guiding and monitoring staff.
- Drafting robust and appropriate contracts of employment which enable the incorporation of individual working practices whilst ensuring all employees adhere to fair and non-discriminatory standards and support the values of the business.
- Adopting proactive communication systems. Individual employees need to be challenged to be open about their needs and intents for their final working years so that, with their employers, they can help design their ‘best fit’ working life – highlighting the need for changes, as appropriate,as the years progress.
- Enforcing a rigorous performance management process which is tailored to measure outputs against targets, regularly, fairly and objectively, regardless of an employee’s age, status, hours worked or seniority of position or service.
- Measuring outputs. No change is easy, but only by monitoring and measuring performance, plus key variables as retention and recruitment figures, over time, will the business benefits be proven.
Any organisation - large or small, private or public sector - which develops a core competency in strategic human resource management based on utilising and maximising the strengths and skills of its workers throughout their entire working life, is an organisation which will steal a march on its competitors and stay ahead of the game. The tipping point is coming – and it’s coming soon.