Upskilling the ageing workforce for industry 4.0

As employees spend more of their lives working, HR is well-placed to help organisations transform the challenges posed by an ageing workforce into an opportunity that drives cross-generational success

Against the backdrop of an ageing workforce, the war for talent is at crisis point as employers around the world fight for a shrinking pool of talent.

In the US, nearly three quarters of employers (73 percent) have increased pay in a bid to attract new staff, according to the 2019 Benefits Strategy & Benchmarking Survey from global insurance brokerage, Arthur J. Gallagher & Co.

Meanwhile in the UK, the talent war has been so devastating that businesses have in the last year alone been forced to spend more than £4.4 billion on temporary staff, recruitment fees and training to drive productivity and plug the skills gap, according to The Open University’s Business barometer report 2019.

The ageing workforce – a growing opportunity

Almost one in three UK workers is now aged over 50, according to the September 2018 report ‘Becoming an age-friendly employer’ by Business in the Community and The Centre for Ageing Better. This trend is set to continue: Mercer forecasts 300,000 fewer UK workers under the age of 30 between 2018 and 2025 compared with one million more workers over the age of 50.

It is therefore time for HR leaders to consider the challenges ahead in managing an ageing workforce, from supporting employees’ health through to their finances, particularly around retirement planning. But they must also consider the opportunities that older workers create in the form of untapped talent, because there is no doubt that HR leaders who support, engage, retain and tap into the knowledge of older workers will win the war for talent and create a competitive edge for their employers.

But HR leaders need to start by changing the way that they think about older workers.

As Andrew Scott, economist and professor of economics at London Business School, says: “Society and firms are very messed up around the word ‘ageing’, which invariably has negative connotations. It also fails to capture what is actually happening. People aren’t just living longer, but on average ageing better and are more educated than past generations of older workers. Referring to this as an ageing workforce tends to ignore this crucial opportunity.”

Rethinking the needs of an ageing workforce

HR leaders must rethink their approach to their profession, because there is little doubt that traditional HR practices are a barrier to the efficient management of older employees, and potentially their ability to engage them and drive performance.

According to the research paper, ‘HR Management for an Aging Workforce – A Life-Span Psychology Perspective’, by Jorg Korff, Torsten Biemann, Sven Voelpel, Eric Kearney and Christian Stamov Robnagel, this is because of the way in which traditional HR practices fail to consider the moderating impact of age and the associated changes in employees’ workforce needs over time – an approach otherwise known as ‘life-span psychology’.

The specific needs of an ageing workforce will inevitably vary between employees, given that people age differently and have diverse needs over time. Nevertheless, HR leaders need to understand the potential factors at play.

Health is a case in point. Two out of three workers at retirement age have at least two chronic health conditions, according to the November 2017 research paper ‘Improving the employment of people with chronic diseases in Europe’ by the European Chronic Disease Alliance in partnership with the EU Health Policy Platform, and consequently may need additional support in the form of workplace adjustments, such as an adjustable desk for a musculoskeletal complaint, or redeployment into a more manageable role.

Further, older employees are more likely to have informal caring responsibilities, particularly the sandwich generation, who may have care responsibilities for both their children and their parents.

According to the March 2019 ONS research ‘Living Longer: Caring in later working life’, informal adult care totalled £59.5 billion per year in 2016, with one in five people aged 50 to 69 years now informal carers.

Financial wellbeing support, such as financial education or financial planning, may therefore prove particularly helpful for older workers who face the costs associated with childcare or eldercare, or perhaps both, in addition to having to save for retirement.

Evolving employment

HR leaders who proactively provide older workers with appropriate support as and when they need it can help their organisations to prevent presenteeism, whereby employees are present but not productive, and optimise productivity. It may also help to boost their resilience, which will be key as many employees face having to work for at least six decades of their lives.

Stephanie Rudbeck, senior director, talent and reward at Willis Towers Watson, says: “I think there’s a big question around how [employers] support people to manage their wellbeing, and support their energy and personal resilience. The model of learn-do-retire is no more; it’s more learn-do-learn-do-learn-do-rest-repeat-try something else.

“[Employees] can no longer come in, learn to do a job and then do that until they retire. People are going to move around an awful lot. [HR leaders] need to adjust [their] thinking around what a career is and what it means.”

Michael Osbaldeston, special adviser at City & Guilds Group, agrees: “[Employment will increasingly be about] adaptability, resilience, listening and communicating; those are the skills that enable each of the generations in the workplace to successfully transition into what is going to be a world that happens at a faster and faster pace.”

Overcoming the challenges of managing an ageing workforce

Ongoing opportunities to reskill and upskill are therefore crucial for older workers, so that they can manage portfolio careers, keep up to speed with industry changes and adapt to rapidly changing work environments.

A number of retailers are already investing heavily in training older workers how to use digital devices for work that they have until now managed manually.

Meanwhile, multiple industries, including technology, broadcasting and engineering, are considering how best to create reverse mentoring schemes that enable older workers to transfer their vast knowledge base to younger peers. Firms, including Arcadis and Arup, have been involved in a reverse mentoring pilot scheme launched by Progress Network, the Association for Consultancy and Engineering’s body for emerging professionals.

Flexible working patterns could help to support such schemes. For example, employers could offer older workers who wish to work fewer hours consultancy-type roles whereby they support and mentor younger workers as and when they required either from home or in the office.

But such arrangements call for a more sophisticated approach to workforce planning on the part of HR leaders, which according to Ed Griffin, director of HR Consultancy & Research at the Institute for Employment Studies, is lacking. “I think the practice of workforce planning is something that HR has often lost, so what [HR leaders are] not able to do is look at the mix of capability and capacity that they have.”

To help address this issue, an increasing number of organisations are using specialist talent management platforms that store a breakdown of employees’ expertise in a database, known as a ‘talent pool’, which employers can draw on as and when required.

Planning for tomorrow

Whatever an organisation’s approach, retaining older workers is preferable to recruitment drives, which are both costly and time consuming for HR leaders when the cost of external recruiters and training for the employee concerned is factored in. Likewise, there is no guarantee of success that recruitment will adequately replace the skills and insight potentially lost from older workers moving on.

Recruitment drives also risk destabilising organisations. As Griffin explains: “If you flood an organisation with a lot of new staff, it can be quite destabilising. You need people who can provide the supervision, the mentoring and the on-the-job training for those new people.”

But seizing the myriad opportunities that ageing workforces present is not just the responsibility of employers; governments, too, must face the reality of the great social revolution that is unfolding, and ensure that older workers are supported to prove their value and not their potential cost to a world increasingly struggling with widespread economic and political uncertainty.