How to Build an Age-Friendly Workforce

Major demographic changes are on the horizon. According to the European Commission’s 2012 Ageing Report, the population of people aged 65 and above will almost double between 2010 and 2060, increasing from 87.5 million to 152.6 million in the EU. The dependency ratio — people aged 65 or above relative to those aged 15-64 — is projected to increase from 26 percent to 52.5 percent in the EU as a whole during the same period, so basically there will be two working-age people for every person over 65.

Together with the financial impact of the recession and the continued globalization of business, the workplace is at a tipping point; the effects of economic inactivity by older workers could be catastrophic. This new era of worker longevity emphasizes the need for talent leaders to adapt.

The underlying problem is one of attitudes. Many leaders do not appreciate how longevity can be an asset to an organization, and too often the debate is framed in terms of how this burden might be mitigated.

There is a counter argument, however, that having older workers can increase an organization’s value. Further, having to retire at a certain age may not be for everyone. For some, being engaged in work enhances quality of life; therefore, those who have chosen to work longer are likely to be those who are deeply engaged in the job. This is one reason organizations should embrace an age-friendly culture. Here are some others.

Age-friendly cultures build diversity. Figures from Eurostat, a European statistics company, suggest the number of people in Europe aged 55 to 64 will increase by 14 million between 2005 and 2030, while the total working population — most aged 15 to 64 — will fall by 20 million. At the same time the number of older workers is increasing. It would be foolhardy for talent leaders to disregard the fastest-growing working group when considering how best to recruit, retain or promote talent.

Further, many studies suggest that companies that leverage diverse workforces will experience better long-term financial returns as well as higher levels of job satisfaction and self-worth among employees.

Enhance organizational development. It has been argued that the only real way to maintain a competitive advantage in business is to learn faster than the competition. One way to maximize a culture of organizational learning is to ensure learning stays within the organization and key staff are retained and encouraged to disseminate their knowledge and experience across the organization. Workers with more experience will possess more knowledge, which can be filtered throughout the ranks.

Mitigate learning, turnover costs. The cost of employee turnover is typically about 150 percent of an employee’s base salary, according to William G. Bliss, president of Bliss & Associates Inc., a consultancy. These costs include loss of productivity, learning, recruiting, exit interviews, loss of knowledge and skills, and the impact or loss for the department. If older workers can be encouraged to stay in the workplace longer, it may reduce turnover costs. Keeping employees with more experience, contacts and knowledge longer, particularly in times of austerity, will provide a firm foundation for growth and sustainability.

Despite this evidence, myths that older workers are difficult to train, less technologically savvy and less flexible and reliable are still prevalent. That they take more time off due to illness and cost the business more is also inaccurate.

According to a study by Leanne Kinsella-Taylor, “Profiting From Maturity: The Social and Economic Costs of Mature Age Employment,” older adults are among the fastest-growing group of computer and Internet users, and they deliver an additional average net benefit to the organization of $1,956 compared to their younger counterparts. Further, a 2006 study by the Australian Bureau of Statistics found that older workers were the least likely group to take sick days and were less likely to experience work-related injuries.

So how should an organization ensure that its policies are age-friendly and properly designed? The first step is to gather evidence using an age audit tool. One such tool developed by Coventry University (Editor’s note: The author works for Coventry University) with ACAS allows an organization to examine all areas of the business. The tool’s traffic light system of red — requires urgent attention; amber — address if resources are available; and green — things are fine — enables an organization to identify how well employees are doing and prioritize interventions.

An age audit tool also tests the perceptions of both older and younger employees. But this type of tool is not the end of the conversation. An organization should build a more strategic review of its workforce to ensure it maximizes the benefits of having employees of different ages.

Organizations also need to build sustainable plans, not just policies that look good on the website. Policies should make a real difference to the employees’ experience. Focused, action-oriented policies and procedures are required, combined with leadership and a culture that makes building and sustaining an effective, age-friendly workforce everyone’s business. Key to this is engaging older workers in the process so they can inform and guide processes rather than feel as though something has been done to them. Some areas to address include:

Analyze recruitment and selection: An organization’s ability to select and retain the most appropriate people is fundamental to its success. Talent leaders should consider how an organization advertises vacant positions, the language used, where the ads are placed and other related factors. For instance, does the organization require applicants to provide their date of birth? Does the company have age awareness training for human resources staff involved in recruitment and selection?

Target learning and development: Some learning and development opportunities may need to be specifically targeted at older workers. While ultimately companies should move toward an inclusive culture, it may be that initial goals should be developed to find ways to encourage older workers to attend developmental programs. Organizations also would do well to ask and listen to older workers about what types of training they would find beneficial and whether there are any barriers that would prevent them from engaging in those opportunities.

Be flexible with job role and work design: In terms of job crafting, older workers may desire a different function, less responsibility and more flexibility as they reach the retirement phase in their careers. Organizations should ensure that work design processes are mindful of an older workforce’s preferences. Research from the European Association of Work and Organizational Psychology suggests there is an interaction between age and work design features in predicting individual and organizational outcomes, such as satisfaction and engagement.

Consider retirement: It is important to engage in dialogue with employees approaching retirement age and discuss the possibilities of phased retirement. Further, human resources procedures should be transparent and fair when it comes to such matters. Talent leaders should recognize that these types of discussions, especially within the current legal framework, can be challenging or difficult, and plan — or even train — accordingly.

Remove discrimination: In a report commissioned by the European Commission, many study respondents reported that negative perceptions of older employees among employers are a significant barrier to employment for those over age 55. However, 87 percent suggested that older workers were more experienced than younger workers, 64 percent said they were more able to make decisions on their own and more than 50 percent suggested that older workers would be better placed to handle stress in the workplace.

Address motivation: Individual motivations for work change at different life stages. Cognitive abilities also change. There are declines in fluid intellectual abilities and motives relating to extrinsic rewards, and increases in crystallized intellectual abilities, job knowledge and emotional regulation. These factors underscore the need for talent leaders not to adopt a one-size-fits-all approach when building an age-friendly workforce. The important point for human resources strategy is to consider whether its practices and policies motivate all staff rather than just younger workers.

Efforts to understand the changing nature of an aging workforce will bring a number of challenges. Governments and organizational talent policymakers will have to work hard to communicate the business case to manage an aging population or risk it being met by industry in a manner akin to driving a nail into blancmange — one that offers little resistance but no results.

Like any organizational change management program, moving toward age-friendly policies will require careful planning, top-level buy-in and ownership on the part of human resources. The plan will need to be communicated to staff and should involve staff in the decision-making processes.

Strategically, human resources policy would do well to work to ensure intergenerational solidarity and maximize the benefits of all employees. To do this, talent leaders will need to consider the impact of an aging workforce at an individual, company and sector level.

Christine Broughan is the director of the Age Research Centre at Coventry University. She can be reached at