Baby boomers are approaching retirement. By 2031, the number of New Zealanders aged 65 and over is predicted to exceed one million (Ministry of Social Development, 2011), and 85% of New Zealand companies are concerned that this will consequently lead to negative impacts on their businesses (Robert Half, 2016). What will happen when older employees retire? The pool of young educated and skilled workers is neither large enough, nor adequate enough, to replace baby boomers and compensate for the ageing population exiting the workforce. This lack imposes significant skills shortage, particularly in occupational groups of construction, engineering, health and social services, and ICT/electronics and telecommunications (New Zealand Immigration, 2016).
Although sometimes presumed otherwise, more mature employees have significant knowledge in their fields and can add tremendous value to organisations. Human resource managers need to explore ways to attract and retain them. The retention of some ageing employees may entail discussing retirement plans that can pose as difficult if not managed carefully. How should managers approach this? Ultimately, baby boomers and ageing employees will exit the workforce and businesses need to implement strategies to preserve the critical skills and knowledge they may take with them. How can human resource professionals address these issues and effectively manage the ageing workforce?
Advantages of using mature workers’ talent
There are various misconceptions about older workers that act as a primary barrier to effectively managing the ageing workforce. The first action step is to adjust the negative attitudes towards older employees by developing an employee advisory/action group that involve appropriate discussions and strategies in addition to policies and programs, on how to conquer age discrimination barriers.
Often regarded as a burden, the more mature employee applicants are often disadvantaged when compared to younger counterparts in the recruitment process. However, feeling reluctant to engage older employees can negatively influence businesses. Consider the example of the economic recession in 2008, where companies had limited access to resources. The lack of access to talent prioritised the promotion of many employees with minimal experience. Over time this triggered high staff turnover as it became evident that a good worker would not necessarily equate to an outstanding manager and effective leader.
As the economy progressively improves, firms are seeking to hire people with substantial management experience of employing older candidates, and for valid reasons.
Here are some benefits older employees offer:
- They have good leadership skills and portray positive role model skills for the younger generation of leaders
- Mature aged workers have obtained strong networks and experience that can add value to companies
- They have practical experience communicating beyond the use of digital devices, hence often have superior communication skills in comparison to junior employees
- They have a professional and dedicated work ethic
- Older employees can be significantly cost effective for businesses. They are less likely to ‘job hop’ compared to younger workers, therefore decreasing continuing recruitment and training costs
Attract, recruit, retain: a solution to skill shortage
Many employers place advertisements online to attract potential job candidates. After all, it is extremely economical and convenient. Be that as it may, this is a limited mechanism for attracting older candidates. Employers are now increasingly regarding older workers as an untapped resource and are actualising mechanisms beyond the contemporary tradition of online recruitment to acquire a variety of workers. This can include:
- Publishing job advertisements in newspapers and industry magazines in addition to utilising online resources
- Ensuring that the advertisement mentions the requirement for a mature and experienced worker in content
- Networking with a range of organisations such as senior or retirement organisations
- Ensuring that age does not prohibit potential candidates in job screening application processes
Pre-retirement planning strategies
How should managers approach the topic of retirement with ageing employees? The key is to raise awareness first and to allow older employees to express their career ambitions and retirement intentions by designing carefully considered questions without generating negative office-morale.
Utilising tools and processes that help to assess the individual’s options such as surveys, personal interviews, and focus groups interviews can be an excellent first choice. Keeping in mind the goal of achieving the best possible outcome for ageing employees as well as businesses, it is important that the chosen tool creates:
- A supportive environment for ageing employees that values their contribution and experience that boosts participation and meets their needs
- A comfortable engagement between managers and ageing employees to explore issues, opportunities, and possible alternative solutions to retirement which facilitates practical responses
Critical knowledge and skills transfer
Inevitably, ageing employees will eventually retire, and this requires pre-retirement planning within organisations. Human resource professionals need to conduct age and knowledge/skills audits to accumulate information regarding the ages of employees and the estimated time to retirement, concerning specific divisions and occupations. This process should also identify fundamental skills necessary to meet the demands of organisations as well as current and prospective customers. Human resource managers may be able to collate a portion of this information from databases, personnel files, and learning management systems. Nonetheless, it is unlikely that the available data is adequate. Additional information can be extracted by asking managers to suggest which workers carry the most valuable skills and knowledge.
These questions can be tailored to investigate the specific knowledge needed to complete important job functions.
Strategies to facilitate critical knowledge transfer:
- Provide incentives for ageing employees to mentor the younger generation
- Train managers to share experience-based knowledge from older workers in an engaging manner
- Allow knowledge sharing to occur naturally by creating positive and interactive working relationships between older and younger employees
- Offer ageing workers the opportunity to transition into training and instructor positions
- Discuss any issues younger employees have relating to training needs and knowledge gaps
- Maximise the use of database systems to store knowledge, information about customers and projects, and contact details for organisational talent with specific skills
Managing the ageing workforce is a complex task. Acknowledging the need to adjust attitudes towards ageing employees and composing favourable strategies can improve performance in companies. It is important for human resource managers to realise the value older employees can contribute to overcoming the skills gap. Pro-active retirement discussions between managers and ageing workers are crucial, and managers should create a supportive environment to accomplish results that fulfil the needs of employees and company. Preparing the organisation for the eventual departure of ageing workers requires a comprehensive multidimensional approach to facilitate the transfer of critical knowledge and skills.
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