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business responses to changing workforce demographics
Taking Stock of Age in a Changing Workplace
19 November 2009—Even before the recent economic downturn, workforce demographic change had often been a secondary concern for organizations. While the predictions of dramatic shifts have been confronting organizational leaders for some time, lags in planning for age-related change or simple neglect have generally been the rule. Of course, exceptions do exist. During the mid 2000s, a minority of employers (12%) surveyed by the Sloan Center on Aging & Work took the workforce demographic challenge head on while others (30%) at least ratcheted up workforce planning efforts (see figure 1).
As a first step, responsive employers began to reevaluate health and wellbeing programs, retirement plan offerings, and recruitment efforts. But, businesses came to understand the effects of an aging workforce would reverberate beyond retirement planning and replenishing lost labor; there are other, more specific demographic trends at work. For example, the appearance of disproportionate number of inexperienced workers began to appear within an overall dwindling labor pool. Additional issues such as the structure of work and the workplace, knowledge management, fostering employee engagement, and revised approaches to diversity and multigenerational issues further challenged organizations to reassess priorities.i
As age demographic transformations intensify, what can we learn from these early adapters?
While the initiatives were varied and specific to individual organizations, many responses can be grouped within three broad categories:
- Retirement trends and labor shortages;
- Knowledge sharing; and
- Workplace flexibility and quality employment.
I. Retirement Trends and Labor Shortages
For many early adapters, rising retirement rates have set in motion a number of dramatic shifts within organizational and human resource strategies. With less suitable workers available, the anticipated retirement boom became a pervasive problem affecting staffing, leadership, and training, plus overall continuity and engagement within the workforce. At the same time, with some older workers wanting to work longer, one of specific challenges was to engage late career stage workers in new ways.
Changing workforce demographics have lead Pitney Bowes, a for-profit organization providing “mail stream solutions” in both the United States and the United Kingdom, to develop and pilot Phased Retirement within their Engineering Department. Leadership recognized that while a good number of employees may want to continue working, they would do so on terms more suitable to their changing lifestyles. The organization also hoped the program would create fewer turnovers, improve employee engagement and productivity and have a measured way to manage knowledge transfer.
Pitney has proactively stressed to employees that phased retirement is a way of keeping them with the organization longer, not an attempt to push them out before they are ready. Translated into practice, Pitney Bowes has encouraged phased retirement to take a variety of shapes, including condensed workweeks, telecommuting and reduced workweeks.
Fidelity Investments has also implemented retirement-based changes, and they have found a way to use older workers as an important resource in a context of labor shortages. As the US population ages, Fidelity is experiencing an increased demand for retirement and financial planning products. In response, Fidelity has developed strategies such as the Retirement Services Staffing Model. Launched in fall 2007, the Retirement Services Staffing Model aimed to maximize the efficiency of Fidelity employees and provide them with flexibility. Fidelity discovered that instead of hiring full-time employees for its call center and under-utilizing them during slow hours, they could hire part-time employees for peak hours. As a result, Fidelity has been recruiting employees who are looking for a challenging but flexible job, concentrating on recruiting parents, second job hires and older workers.
Fidelity feels that older workers in particular are better able to relate to their clients who are seeking retirement planning services. However, more than just life stage makes these workers attractive to Fidelity; it is well documented that 50+ workers are highly motivated, reliable, flexible, and generally more engaged (see figure 2).ii
II. Knowledge Sharing
As organizations have already experienced, demographic changes have ushered in new challenges to retain or replace organizational knowledge and “know-how.” Effective succession planning and phased retirement were certainly salient strategies among early adapters, but so too were the creation of opportunities for cross-generational mentoring. Progressive employers such as MITRE and GSK understood that by creating opportunities for meaningful communications across generations they would facilitate the transfer of tacit knowledge.
MITRE implemented its Cross Generational Networking Circle in September 2006 in order to create opportunities for professional and social networking among its workforce. This program has fostered a culture of respect, inclusion and equity, and promotes constructive relationships at the workplace. The networking circle has also created opportunities for development, learning and advancement for employees through the discussion of a wide range of participant selected topics. An added benefit of this program was the sharing of company norms, values, and company history from the companies most tenured employees to their newest staff.
We see other examples as well. GlaxoSmithKline hoped to strengthen its approach to flexibility, knowledge transfer and cross-generational understanding through their Early Career Network (ECN). The ECN formed in June 2007 upon the realization that it was difficult for some early career employees to connect with others in the same life-stage. The ECN was established as a voluntary, member-run network focused on increasing the sense of community among early-career employees. The network strives to “attract, motivate, and retain employees early in their careers.” GSK has found that participation in the ECN improved job satisfaction and helped employees to better understand their benefits. In addition the ECN created many opportunities for knowledge sharing both from older workers to their younger colleagues, and in many cases in the reverse. In one project the ECN members connected with their older colleagues in the 50+ Prime Time Partners network to conduct training on the use of social media.
III. Workplace Flexibility and Quality Employment
Schedule flexibility and other dimensions of employee work choices are becoming more popular as employers take account of the changing needs of today’s workers. It is no accident that many organizations are using flexible work arrangements as ways to retain and recruit older workers, who particularly value such programs. But it would seem that the priorities of 50+ workers are coinciding with broad workplace changes that may or may not be consciously targeted toward older workers alone.
Boston College is one such example. BC has a high number of long time employees, as well as younger employees who are increasingly concerned with career development issues. In response, Boston College is looking at ways to maintain work/life balance and more generally increase opportunities for flexibility. The development of the Information Technology Services Structure Approach to Working from Home is one way that Boston College has encouraged a culture of flexibility in a portion of its workplace. A cornerstone to the program is the idea that arrangements must first meet business needs. That said, the program gives employees a greater level of flexibility while fulfilling their work responsibilities, allowing those eligible to telecommute one day per five-day workweek. Because work from home arrangements are an attractive and feasible work feature in Boston College’s ITS department, leadership believes it serves as a tool for retention as well as recruitment.
Flexibility at work, especially in terms of scheduling, work location and other flexible options are certainly a part of many organizations scenarios. Early adapters have also implemented programs and initiatives emphasizing other aspects of quality employment, such as health and wellbeing.
St. Luke’s, Idaho’s largest not-for-profit community health system, developed and implemented an Employee Wellness Program in 2005 due to strong employee interest as well as an organizational commitment to employee health. The program consists of awareness and educational opportunities such as health risk appraisals, screenings, and brown bag lunch talks to engage employees. Health activities such as water aerobics and yoga classes are provided, along with a criteria-based incentive program called the Wellness and Tobacco Challenge. Each component of the program has been designed to educate employees about a healthy lifestyle and empower them to live one. To measure the success of the program, St. Luke’s has monitored attendance, employee satisfaction, health improvement, injury rates and utilization.
Beyond Just Managing Age These brief cases demonstrate that emerging demographic changes are being met with different strategic responses, though each organization has recognized similar shifts. Furthermore, the cases show that “early-adapter” organizations are hardly engaged in “damage control.” Far from it—potential competitive gains from an action-centered engagement with an aging workforce are huge.
These commitments, exemplified by the early adapters, seem to cluster around the following themes:
- Flexibility – An increasingly attractive priority. Flexible options are not only a matter of just new policies and programs—flexibility is now recognized as significantly contributing to organizational attitude.
- Generational concerns – An aging labor pool gives rise to many age related concerns, especially in terms of multi-generationality as the new workplace reality. The opportunity exists for new positive collaborations among age diverse workers, benefiting knowledge transfer, teamwork, and the larger work culture as a whole.
- Career development – Because of their diversity in age and life stage, today’s workers have distinctive and sometimes non-traditional needs. Plus, these needs are more likely to change during employees’ tenure. When employers honestly and holistically consider worker welfare, especially for those in mid- and late-career stages, benefits of increased employee wellbeing, and employee satisfaction will abound.
- Connection – Within a context of demographic change, there are new opportunities to bring together personal and organizational priorities. This seems to be best achieved when organizations not only find out what workers’ priorities are, but also when employees witness organizations taking an interest and following through.
But what has happened to the early adapters more recently? Have their initiatives become reformulated within a changing organizational landscape? Specifically, have other priorities taken hold within changing economic conditions?
Where does age “sit” with companies who are already hunkered down?
Authors, Fee, Dwight, Ph.D.; Lynch, Kathy; and Woodnick, Pamela
i Unless otherwise noted, these cases are derived from The Sloan Center’s Employer Learning Circles. The Learning Circles provide a valuable glimpse into strategic responses of the early adapters. In 2008, representatives from fifteen organizations from six different industry sectors shared their experiences of confronting changing age demographics. The conversations integrated a cross section of functions within and outside of Human Resources, including but not limited to Director of Government Programs, Next Generation Initiatives, Workforce Development Management Personnel and many Senior Level Human Resource Executives.
ii See AARP 2005 Report; Gray Skies, Silver Linings