Employing older workers in contemporary organisations
Table of Contents
Introduction
In Human Resource Management, managers are supposed to take strategic actions so that they can benefit the business by maximising the performance of employees. This, in turn, would allow the business to gain a competitive edge over other businesses operating in the same industry. Employers nowadays are focussed on employing older workers because these workers have lower turnover and absentee rates in comparison to the younger workers. Moreover, it has been expected that life expectancy of people in the UK is likely to rise to eighty years and in advanced economies, people will continue to work in their seventies and eighties. However, recruiting older workers also posits certain opportunities and challenges. These areas shall be explored in the report. Two business case studies shall be considered and the need to recruit older workers shall be highlighted as well. Lastly, a few recommendations would be made so that organisations can ensure the ready supply of labour.
Business case studies
The need to adopt strategies for recruiting older workers
The labour market around the world has tightened and companies are now adopting strategies to hire and retain the older workforce. The strategy of allocating more work per people no longer guarantees more output and it is no longer solving the issue of labour supply (Conerly, 2020). Therefore, companies are willing to try a different option. Companies are employer workers above 50 years. It is profitable for companies to hire the currently disabled or discouraged people and their contribution can enhance the condition of the employable population. However, instead of focussing on the disabled population, it would be feasible to meet the skill gap by employing older or enthusiastic population because they are experienced individuals and they can ensure the growth of businesses for decades. Moreover, studies conducted at various universities and research done by the Federal Reserve reveals that approximately 60% of retired individuals are willing to get back to work if they have the choice to work in flexible hours. Interestingly, they are ready to accept low pay. Notably, older professionals from technical services, education services and management fields are willing to re-join the workforce. The older workers only require a bit of flexibility. Some might prefer to work for six weeks in a preferred company location and others might not want to commute during rush hours. However, some businesses require employees who will spend 9-10 hours in the service of customers. In these kinds of businesses, offering flexibility can be a challenge.
A study has been conducted on Dutch employers so that their attitudes towards older employees can be understood. The study findings revealed that in 2000-2009, the condition of older people in the labour market has improved (Conen, Henkens & Schippers, 2011). At the time of recession, the recruitment patterns of older people lowered. However, gradually the organisational policies have been modified and it has improved the position of older workers. Another study conducted after selecting 3,638 organisations across six European nations revealed that employers use HR-based strategies for handling workers above 50 years. European organisations use exit policies instead of development measures in order to tackle the ageing workforce (Van Dalen, Henkens & Wang, 2015). The organisations also use seniority-based wages. When these organisations face recruitment issues, HR gives more effort towards investment and accommodation.
Figure 1: Annual growth rate in the labour force by age
(Source: shrm.org, 2020)
Benefits of an older workforce
Businesses are undergoing rapid change due to a wake-up culture brought about by hiring and retention of workers above 50 years. Everyone including companies, workers and economies win by hiring older workers. Smart employers are aware of the fact that age plays an insignificant role in the hiring decisions (Hannon, 2020). This is because innovative companies focus on talented people. Moreover, the tight labour market condition instigates employers to look at the opportunities present in front of them. Workers above 50 are usually experienced people and experience in every field opens a myriad of opportunities. Moreover, older workers are likely to be more loyal and stable. They do not jump from one job to another, as they are likely to stay committed. Companies invest in huge financial resources in order to train new individuals. However, younger people are likely to leave their job after receiving a high-paying offer. Therefore, it is beneficial to hire older workers. Again, experienced people possess good decision-making skills. They have polished their critical thinking skills too. Hence, employers started to understand that a 2-3 weeks training could never replace the wisdom and knowledge gained by older workers after serving 20-30 years in a field. The self-assurance levels of older workers tend to be high and it comes with experience and age. Lastly, the cognitive capacity of older workers is high because they have honed their communication skills, leadership capabilities, management skills and empathetic abilities as well. Hence, these are attractive traits of older workers and employers are willing to make the best out of these opportunities. Again, studies related to age-diversity and HR practices explore the consequences of age-based stereotyping in the workplace. Age-based discrimination negatively affects organisational performance (Kunze, Boehm & Bruch, 2013). Top-managers need to include diversity-friendly HR policies so that a negative culture in the organisation can be prevented.
Figure 2: Percentage of employees (16-64 years and above) by the industry as per the 2011 Census, UK
(Source: ons.gov.uk, 2020)
Challenges of an older workforce
Ageing of workers can pose new challenges for employers, societies and the workers themselves. It can be challenging societies to sustain the exponential number of older workers and retirees (Szinovacz, 2011). Particularly, in times of economic recession, it is challenging to retain an older workforce or a huge number of retirees because their pay scale is higher. Moreover, workers might feel a sense of dilemma while postponing retirement and continuing work. In the majority of cases, older workers continue to work because of financial necessity. Moreover, a rapidly ageing population can give rise to serious management challenges. Despite that, it is mandatory of governments, unions and private companies to integrate both older and younger generation in the workplace and maximise their involvement in the labour market (Connell, Nankervis & Burgess, 2015). However, the older workforce is less likely to be flexible in comparison to the younger workforce because they are less motivated to make new changes in work habits. Absenteeism is a serious issue common among the older workforce. Due to health-related issues, they might feel less motivated to work every day. Again, companies also deal with long-term absenteeism because older workers might suffer from chronic illnesses or serious physical issues. In the majority of jobs, the rate of absenteeism is more among the older employees due to the nature of the job. It can be tedious and monotonous. Nevertheless, the automation of jobs can resolve the issue of absenteeism. Employers might be willing to retain the top-talent and experienced individuals; however, few employees might not be willing to postpone retirement. Based on the management strategies of the HR and type of industry, older employees might show different attitudes. Lastly, employers might face a dilemma while choosing the worker who might postpone retirement. Older employees are supposed to transfer their expertise and knowledge to their younger counterparts. At this instance, the future of the company is in the hands of the older employee. Hence, choosing the employee and asking them to retire can be either beneficial or harmful for the company.
Case study organisations
In the UK, various organisations are age-friendly and diverse. The HR policies have been designed considering the age-related biases. These organisations are committed to improving the age-friendliness and encouraging the older workforce to join their team. Two organisations have been chosen that has received industry awards and attention from industry experts for their age-friendly policies.
IAB UK was founded in 1997 and it is based in London, UK. The company operates in the digital advertising industry and it has contributed greatly towards the development of the digital advertising marketplace. It offers wide coverage of news, statistics and guidance with the help of specialist members (Homepage | IAB UK. 2020). The members are also offered free access to the events launched at IAB UK. The organisation has created a diversity and inclusion policy. Older workers are encouraged to participate in the workforce. Every business needs to realise the significance of a multi-generational workforce because it leads to the development of new perspectives, knowledge and innovation (iabuk.com, 2020). Therefore, the organisation has a clear set of rules regarding age-diversity and inclusion. It works towards building people together so that a team can be built. Potential employees are not excluded based on their age. The company also have interview panels that promote age-diversity. It plans to broaden the perspectives of employees by hiring workers of all ages.
Similarly, Aviva is another UK-based employer that operates in the insurance and investments industry. It is one of the UK’s largest insurance companies with more than 15 million customers (aviva.co.uk, 2020). The company has an employee-friendly policy and it has already cut the bureaucratic structure in order to empower employees to think creatively. At Aviva, around one-third of employees out of 17,000 belong to the middle-age group (aviva.com, 2020). They are 45+ and the company realises that the success of Aviva lies at the hands of this age group because they are skilled, experienced and well-groomed. A majority of employees of Aviva enters this age group every year and the company considers the well-being of the employees belonging to this age group. They have become an asset for the firm and they are provided feedbacks and guidance regarding their future. They are given proper direction so that they can seek further support from Aviva. In May 2019, Aviva launched the Mid-Life MOT for its employees. It is a type of intervention for benefitting the life of mid-life employees at Aviva.
Figure 3: Aviva’s Mid-life MOT for employees above 45 years
(Source: aviva.co.uk, 2020)
Recommendations
Companies are likely to focus on strategic HRP or Human Resource Planning so that they can meet the staffing needs of the future. HRP can act as a tool for achieving business success because it helps to identify surpluses and gaps in capabilities and areas where people are utilised poorly (Yin & Othman, 2015). The labour market witnesses constant shortages and surpluses of labour and there is a need for managers to predict the movement of people. The managers need to know the future demands of a job so that they can create a framework that balances the supply and demand of workers. Labour supply mainly refers to the number of people or labour necessary in a business in order to meet the business needs. A business might fulfil its labour supply from within the organisation or outside the organisation. During strategic HRP, the HR manager is supposed to predict the skill level and productivity level of employees. They need to conduct a skill assessment so that existing employees can up-skill themselves and newly hired candidates can improve their capabilities too. A future-ready workforce must be strong and productive so that it can meet the future needs of the company. Manpower planning and strategic HRP are considered as similar methods, however, manpower planning is a traditional method and rigid at the same time. It fails to represent the shift that occurs while managing people. On the other hand, strategic HRP considers the complex occurrences and reasons behind the increasing turnover rate in an organisation. Manpower planning also fails to consider issues such as organisational culture and its impact on employee behaviour. However, the HRP approach can be used in contemporary organisations because it focuses on short-term as well as long-term issues troubling an organisation. Businesses capable of acquiring and retaining talent have a huge competitive advantage.
Conclusion
The report incorporates a wider understanding of HR practices related to age-diversity across organisations and trends in recruiting and retaining older workers. At first, the need for recruiting aged workers has been explored. Following that, the benefits and challenges faced by organisations while recruiting and retaining them have been discussed. Case studies of UK-based firms, Aviva and IAB UK has been considered because these are age-friendly employers in the UK. Lastly, few recommendations have been outlined discussing the strategies for becoming a labour-supply ready organisation in the future.
References
Aviva Careers · Be empowered to be your best. (2020). Retrieved 15 July 2020, from https://careers.aviva.co.uk/
Conen, W. S., Henkens, K., & Schippers, J. J. (2011). Are employers changing their behaviour toward older workers? An analysis of employers’ surveys 2000–2009. Journal of aging & social policy, 23(2), 141-158.
Conerly, B. (2020). Retaining And Recruiting Older Workers: Tight Labor Market Solution. Retrieved 15 July 2020, from https://www.forbes.com/sites/billconerly/2020/01/25/retaining-and-recruiting-older-workers-tight-labor-market-solution/#c0d36066fd19
Connell, J., Nankervis, A., & Burgess, J. (2015). The challenges of an ageing workforce: an introduction to the workforce management issues. Labour & Industry: a journal of the social and economic relations of work, 25(4), 257-264.
Hannon, K. (2020). 10 Reasons To Hire and Retain Workers 50+. Retrieved 15 July 2020, from https://www.forbes.com/sites/kerryhannon/2019/07/21/10-reasons-to-hire-and-retain-workers-50/#17b1169a2faa
Homepage | IAB UK. (2020). Retrieved 15 July 2020, from https://www.iabuk.com/
How to support age diversity and inclusion | IAB UK. (2020). Retrieved 15 July 2020, from https://www.iabuk.com/diversity/age-diversity
Kunze, F., Boehm, S., & Bruch, H. (2013). Organizational performance consequences of age diversity: Inspecting the role of diversity‐friendly HR policies and top managers’ negative age stereotypes. Journal of Management Studies, 50(3), 413-442.
One third of mid-life workers believe age discrimination is an issue. (2019). Retrieved 15 July 2020, from https://www.aviva.com/newsroom/news-releases/2019/05/one-third-of-mid-life-workers-believe-age-discrimination-is-an-issue/
Szinovacz, M. E. (2011). Introduction: The aging workforce: Challenges for societies, employers, and older workers. Journal of Aging & Social Policy, 23(2), 95-100.
Van Dalen, H. P., Henkens, K., & Wang, M. (2015). Recharging or retiring older workers? Uncovering the age-based strategies of European employers. The Gerontologist, 55(5), 814-824.
Yin, J. G. S., & Othman, M. H. B. (2015). Strategic Human Resource Planning.