Business improvement and older employees

Author Mike Toten 7 May 2013
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Improving the management and retention of older employees will provide opportunities to improve productivity, move beyond stereotypes, increase work flexibility and improve organisation training, according to a Discussion Paper released by the Australian Institute of Management (AIM).
The Paper argues that these opportunities can be achieved if businesses focus on the positives of an ageing population instead of the negative stereotypes that often monopolise attention.
With more than one million Australian employees expected to retire during the next decade, and fewer young employees entering the workforce over the same period, action to take advantage of the opportunities is urgently required.
Both government-driven and organisation-driven initiatives will be required to retain older employees and increase their workforce participation rate. The Paper discusses the organisation-driven initiatives, using the four types of opportunities listed above.
The Paper notes that while Australia’s older employees’ workforce participation rate is higher than the average for all OECD countries, it is less than countries such as the United States, United Kingdom and Canada, and about 15% lower than New Zealand. An ‘early retirement culture’ is cited as one of the reasons for this, with about 80% of men and more than 90% of women retiring before age 65 and more than 25% of men and over 50% of women retiring before 55.
However, the global financial downturn of 2008–09 appears to have marked the beginning of a trend to delay retirement, albeit mainly due to financial/superannuation reasons rather than actual preference.

Opportunity 1: Increasing productivity

Other research has identified increasing the workforce participation rate of older employees as a key driver of increased productivity. The Paper claims that doing so increases both the width and depth of an organisation’s talent pool, by both increasing the number of people available and improving capacity to attract and retain people who can afford to be selective about how and where they work and who have built up skills and experience over a lengthy career.
Research has also suggested that older employees tend to have ‘crystallised intelligence’ (based on acquisition of knowledge and experience). This is important, for example, when engaging with customers and other stakeholders, and with dealing with issues that have arisen in the past. Younger employees have ‘fluid intelligence’ (based on abstract and reasoning ability). Both types of intelligence are valuable.
Retaining older employees has the advantages of avoiding loss of corporate knowledge and reducing recruitment/replacement costs.

The Paper recommends that businesses take the following steps:
  • review existing workforce demographics, in particular to identify jobs and work areas where older employees are more heavily represented
  • survey employees to gain an indication of their retirement intentions and time frames
  • develop age management and retention strategies to ensure critical business roles are not affected by retirement
  • compare employee demographics with those of the community generally
  • develop mixed-age work teams so that older employees’ experience and decision-making perspectives are spread out rather than confined to particular areas — frontline service roles in particular should benefit from this
  • develop strategies for capturing corporate knowledge
  • consider specific recruitment strategies for older employees.

Opportunity 2: Moving beyond stereotypes

Other research has identified various negative stereotypes about older people that exist in both the workforce and general community (eg resistant to change, uncomfortable with new technology, reduced physical capacity, more health problems). Within organisations, they may be expressed in euphemistic terms such as ‘not our cultural fit’, ‘doesn’t suit our work team’, ‘overqualified’, etc. This situation conflicts with other research that indicates that there are high levels of diversity within each generation, not just between them. For example, many older people are now child-free yet others are carers for elderly parents or grandchildren.
Even stereotypes that are superficially positive may work against older employees. For example, an assumption that they are wiser may be combined with one that this will make them too conservative if put in charge of an innovative project.
Recommended actions to overcome stereotyping include the following:
  • review recruitment practices to ensure applicants are assessed on the basis of merit
  • review language used in recruitment to ensure it emphasises terms such as experience, knowledge, expertise and insight
  • proactively recruit older employees
  • use in-house communications to promote positive images of older employees
  • promote a workplace culture that supports diversity, and enables older employees to discuss work with their managers in a spirit of trust
  • treat each employee as an individual and take time to understand him/her
  • use mixed-aged teams, as discussed above.

Opportunity 3: Investing in flexibility

The Paper quotes research that strongly demonstrates the business case for flexible working arrangements being available to all employees. Of particular interest to older employees are options for phasing into retirement and for coping with significant lifestyle changes such as moving to new locations.
For some employees, particularly women, mature age may provide them with their first opportunity to really focus on their careers, because they are free from family/carer responsibilities for the first time. Another trend is greater interest in doing work of ‘social value’ such as voluntary work, usually while also continuing in some form of paid work.
The Paper recommends the following actions by employers:
  • monitor the impact of flexible working arrangements on older employees’ ability to balance their work and non-work activities
  • review options such as part-time and casual work, flexible working hours, lifestyle and career breaks and phased retirement
  • consider a program to rehire retired employees (eg to establish talent pools for project work)
  • consider the accessibility needs of all employees when implementing new software and other business systems
  • develop strategies to guard against career stagnation of older employees, such as study leave/assistance, secondments and new projects
  • review jobs to ensure they offer meaningful content that matches older employees’ abilities.

Opportunity 4: Training for the future

Training is a contentious area. Older employees often miss out on opportunities because it is thought they will not remain working for long enough to recoup the investment in training, and redundancy is sometimes implemented instead of retraining. In practice, retention rates for older employees are not lower than for younger ones, and older employees tend to rate training opportunities as very influential on their decisions whether to remain working.
Older employees also have a potentially valuable role as trainers themselves, as well as mentors and coaches.
Research indicates that older employees do not have less ability to learn than younger ones, but they may have had fewer education opportunities when younger and therefore may have less recent education experience and lower qualifications than younger people. This is an argument in favour of designing training programs/packages for older people that recognise their prior learning.
Career planning activities for older employees should emphasise career success, job mobility and continual re-skilling, instead of occupational choices. This step should commence before employees start to contemplate retirement (eg when they are aged in their 40s). Access to financial planning/advice is also recommended.
Recommended steps for employers include:
  • regularly discuss training, career planning and professional development with older employees
  • review training policies to ensure they provide equal access for all employees and support for age management and retention strategies
  • develop training programs to ensure that older employees’ skills and experience can be shared with other employees, so that corporate knowledge is passed on
  • establish formal mentoring and coaching programs
  • develop programs that recognise prior learning and waive requirements for specific qualifications when employees can demonstrate relevant experience
  • research and use available government subsidies that relate to older employees (eg training and career advice).
Further information
Engaging and Retaining Older Workers, by Dr Lucy Burgmann, Discussion Paper published by Australian Institute of Management, February 2013.
Mike Toten
Mike Toten is an HR Consultant who specialises in research and writing about HR best practices, industrial relations, equal employment opportunity and related areas. He has been a regular contributor to WorkplaceInfo for a number of years. more from Mike
1 Comment
Christine S  8 May 2013,13:46   
We are a Maternity Pracitce with two GP Obstetricians and five Midwives, often they are called out to do a deliver, it's our reception staff who hold the fort and keep our young mums and their little ones entertained. The youngest is 50, followed by 63 and 65 and so dedicated, lots of knowledge, one was a Practice Manager who now want an easier work life and bring so much knowledge with her as do the other three, I'm 60 this year and the Practice Manager. We have the best working enviornment and love working with young parents-to-be, new mums and tiny babies.
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