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por Debra Sabatini Hennelly
Due largely to early retirements and a caustic mix of ageism and cost-cutting measures, businesses let too many older workers go during the pandemic — and when they left, so did a lot of institutional memory, expertise, and loyalty. With fewer younger workers entering the labor market for at least a generation, employers that don’t think beyond today’s working-age population will likely struggle to build a reliable workforce that can maintain operational efficiency and effectiveness. They must reconsider their DEI strategies to meet the demands of a new era if they want to drive operational effectiveness, increase competitiveness, widen their appeal to consumers of all ages and abilities, and build long-term resilience. The authors describe how leaders can account for the changes — and benefits — that come with an aging workforce to power productivity into the future.
Demographic change is one of the least understood yet profoundly important issues facing organizations today. The “working-age population” in the U.S. — those from age 16 to 64 — is contracting at a pace not experienced since World War II. Unlike that period, there is no “baby boom” behind it, and none is expected in the near future. Generation Z has three million fewer people than the Millennial generation, and Generation Alpha, which follows Gen Z, is expected to be even smaller.
Due largely to early retirements and a caustic mix of ageism and cost-cutting measures, businesses let too many older workers go during the pandemic — and when they left, so did a lot of institutional memory, expertise, and loyalty. Those employers didn’t account for the reality that there might be too few younger workers to fill those roles as the pandemic subsided.
With fewer younger workers entering the labor market for at least a generation, employers that don’t think beyond today’s working-age population will likely struggle to build a reliable workforce that can maintain operational efficiency and effectiveness.
In this context, it’s worth noting that the average age of the world’s population is increasing due to “population aging.” Population aging is attributed to decreased birthrates and increased longevity, which are happening at an alarming rate in nearly every corner of the world.
By the end of this decade, at least 35 countries will have more than one out of five people over the age of 65 — a first in the history of the world. However, this is already the case across Europe, as well as some of the largest economies in Asia, including Korea, Japan, and Singapore. By 2034, older adults over 65 will outnumber those under 18 in nearly all of those places, too.
In the U.S., nearly half of states and three-quarters of counties are experiencing more deaths than births, which means that if those places don’t have positive immigration rates, they’re experiencing population decline. The need for business to support and retain older workers is even more pressing in these areas.
In a survey by the Living, Learning, and Earning Longer Collaborative Initiative, more than eight in 10 global leaders recognized that multigenerational workforces are key to growth, yet less than half of companies include age diversity in their DEI initiatives. Pre-pandemic employment practices won’t take us into the future.
Organizations must reconsider their DEI strategies to meet the demands of a new era if they want to drive operational effectiveness, increase competitiveness, widen their appeal to consumers of all ages and abilities, and build long-term resilience. Here’s how leaders can account for the changes — and benefits — that come with an aging workforce to power productivity into the future.
Businesses can support employees past the traditional retirement age by shifting strategies from recruitment to retention. Just a few years ago, this would’ve been unheard of outside of “super-aged” countries, like Germany and Japan, or in sectors like agriculture or public service.
Retaining older workers increases the diversity of organizations and can improve operational efficiency, enhance innovation, and grow the bottom line. A Gartner study revealed that a highly inclusive environment can improve team performance by up to 30%. Another by McKinsey & Company suggested that companies with the most diversity outperform those with the least by 36% in profitability.
Retention rates can be improved when inclusive design practices are levied across three dimensions: compensation and benefits strategies, working arrangements, and workplace design. The practice of inclusive design considers the full range of human diversity, including age and ability.
The tight labor market and rising inflation are pushing workers to demand better pay and improved benefits. Caregiving leave, retirement savings programs, financial check-ups, and lifelong learning and reskilling are attractive to all employees, regardless of age. However, some companies are creating novel support for menopause, grandparents’ leave, and sabbaticals in order to reward and retain older talent.
Flexible work is one way to help employees of all ages. This might include remote or hybrid work, a shortened work week, and variable schedules to meet personal or family needs or accommodate mobility challenges. Employees may also be enticed to stay with phased retirement and job-sharing programs.
These types of working arrangements, which were once the provenance of “white collar” office jobs, now have the potential to extend to industrial and service-sector jobs, too. Frontline workers, many of whom are required to be onsite, could be offered compressed schedules and more days off; “flex time,” where they work a set amount of hours and choose their starting and finishing times within agreed-on limits; or both.
Workplace design can impact the retention rates of workers, both positively and negatively. Effective inclusive design need not be a major capital investment (although it can be), but rather can consist of small and inexpensive interventions that flow from insights gathered from surveying and talking to employees of all ages and abilities about their user experiences within the workplace. These interventions can include everything from improved ergonomics (e.g., office chairs) to lighting (i.e., type of lighting and access to natural light). When taken together, these small changes can improve and extend workers’ well-being and productivity.
Harnessing the perspectives of employees of differing backgrounds can ignite innovation. As Andrey Khusid, Miro’s founder and CEO, noted, “When individuals who entered the workforce before email can collaborate smoothly with those who were raised on memes and selfies, your business can bring more widely appealing products to market, craft compelling marketing campaigns to touch millions, and win love for your brand across the generational spectrum.”
Multigenerational collaboration does not occur without some nurturing. Here are seven ways to bridge communication gaps and challenge assumptions:
Meaningful one-on-one relationships can build intergenerational awareness and break down misperceptions. The concept of two-way, mutual mentoring expands the benefits of traditional, one-way mentoring relationships, as insights and tips can be shared in both directions. The opportunities for senior employees to gain awareness from junior employees in “ reverse mentoring” can also provide powerful experiential learning for the older colleague — and with low risk of embarrassment.
When handled well, these relationships can open minds and communication channels, increase comfort levels with technology, and build inclusive networks.
A common obstacle in team effectiveness is the absence of trust, according to Patrick Lencioni’s The Five Dysfunctions of a Team. When colleagues are afraid to be vulnerable with one another and are unwilling to admit their mistakes or need for help, competition and intimidation undercut connecting. There are no shortcuts to building trust among generations at work.
Tensions can escalate when people make assumptions and objectify each other. Research has shown that actual differences between generations are not as great as stereotypes might suggest, while there are wide variances (and intersectionality) within generations. But assumptions can be contagious. Beliefs that age-based generalizations are accurate can impact the way we manage and interact.
We can break through stereotypes by finding commonalities across generations. Create opportunities for colleagues with shared strengths, passions, and life experiences to connect on projects, charitable work, and in social events. Employee resource groups (ERGs) — traditionally created as supportive communities for employees who share common ground — can create cross-generational bonds. AARP developed an Intergenerational ERG Toolkit to help employers enhance age inclusivity.
Communication preferences and generational dialects can be major obstacles to collaboration. Core values and codes of conduct can fall short of establishing “rules of engagement” for multigenerational teams when a translator and dictionary might be necessary. The disconnects might be as simple as misunderstandings about vocabulary and emoji use across generations or generational preferences for communicating by email, messaging, telephone, and social media.
By confronting these head-on (with some self-effacing humor), a leader can convene a team discussion about communication, sharing their own vulnerability and mistakes first, and ask for other examples that need clarification. You don’t have to look too far to find the training ground for successful multigenerational communication: Ask team members to share some successful examples of dealing with these disconnects among multigenerational family members. The team can set collective ground rules for how they communicate and through what media, as well as agreeing on ways to ask for “translations” to avoid miscommunications.
Innovation and organizational resilience require leaders who can manage across four or five generations and retain the expertise, experience, and wisdom of older employees. There are several essential attributes in this leadership pipeline:
Identify and reward managers who are comfortable hiring and managing employees older than they are. The self-awareness required to engage employees with skills or expertise they lack is a necessary insight for achieving team objectives.
Managers must rethink their “filters” on candidate pools to embrace the demographic shift in the working-age population. Recognize and encourage younger managers who don’t write off older candidates as “overqualified” or question why they would apply for a role that seems to be “beneath” them. They understand that there are many reasons why an older candidate might be applying and can be open to learning what that person might offer the team.
As Google learned in its enterprise-wide, two-year workplace study, psychological safety is key to having high-performing teams, reducing turnover, and increasing revenues. Professor Lindy Greer noted about Google’s findings, “If you just put people together, they’re going to crash and burn unless they have conflict-resolution training, a manager who can coordinate roles, and opportunities to learn with one another.”
When employees of different generations shut down each other’s contributions as either outdated or naïve, resentments grow and trust diminishes. Managers who can reframe generational differences as opportunities for collective learning can facilitate respectful debate. By creating psychologically safe team environments, managers can build trust for welcoming broader perspectives, new ideas, and dissenting positions — without judgement — and avoid the inertia of groupthink.
Promote managers who think creatively — and beyond age-based generalizations — to be inclusive of long-tenured employees.
Workforce resilience requires making reskilling a strategic priority. Proactive managers who plan for valued employees to develop new expertise or take sabbaticals can reengage and prolong those employees’ careers.
Beyond adapting to automation and technological changes, for example, employees in manufacturing and services industries could move into training, safety, or compliance roles that take advantage of their operational experience and reputations with colleagues.
Given the demographic shifts impacting labor and consumer markets, companies need proactive approaches to retain older workers, which will adapt team dynamics for sustainable growth well into the future. Creating that environment requires mutual respect, age-inclusive designs, and encouraging candor to catalyze the creativity grounded in the team’s diverse experiences.