Whether your firm will win or lose in the talent revolution depends on what it does today.
Those who address today’s dramatic demographic change strategically will gain. Those who don’t will lose. Past revolutions – as workers moved from farm to factory, as women first entered the workforce, and as the economy shifted from industrial to services – shared similar patterns with today’s talent revolution.
“Current technological advancements, even the projected Internet of Things, are not the end of work and the workplace, but simply milestones in today’s talent revolution.”
These first three waves of the Industrial Revolution provide guidance for navigating today’s fourth wave. Wise leaders recognize that a period of uncertainty – perhaps a decade or more in length – clouds the future. Top executives must focus on elements that are in their immediate control. They should acknowledge that people live and work longer today, and that this has profound implications on employees’ careers and on organizations. To prepare for an era of worker shortages, seek and find hidden talent.
Don’t focus on retiring older workers. Engage and retain them.
Don’t regard the threat of mass retirement as the true challenge inherent in the aging workforce. Few employers want to see their mature workers retire all at once. But memories of a mandatory age for retirement and the viewpoint that older workers are burdens or obstacles to young people’s careers still exert influence. This clouds decision makers’ judgment regarding new workforce trends.
“Never before have we considered our reasonable work-life expectations to extend into our 60s, 70s and even our 80s, and there is no doubt that we are in uncharted territory.”
Deere and Company and IBM, for example, implemented programs to retain older workers. Only 4% of US organizations have older worker retention strategies because they wisely recognize the value of these workers.
The more educated workers are, the more interest they have in working longer. For example, many seek a “legacy career,” work they can pursue into their 70s or beyond. These careers may pay less but align more with their interests, values and purpose. For others, working later in life is an economic necessity. The more society and employers embrace this shift, the better.
“The corporate ladder isn’t working. In fact, it is immovable, formalized and clogged, which makes it obsolete.”
Increasingly, employees of all ages take responsibility for directing their own learning and career. They take the long view, blending work and life and demanding more flexibility. Workers embrace the gig economy and the freedoms it offers. Workers older than 50 show an increase in interest in forming their own firms. Wise employers make work more flexible and self-determined. They empower workers by helping them equip themselves for multiple careers. They encourage employees to match their interests, personal goals and values to the organization’s ambitions. This boosts engagement among employees of all ages.
“Workplace ageism is insidious, rampant and stifling.”
These steps include offering training and developmental opportunities to older workers. Many employees report they stopped receiving training opportunities at age 49, and meaningful career conversations with managers ended not long after. Most older workers want developmental and career change opportunities, but they may not have the knowledge to direct their own learning or career progression. Firms must provide employees with the tools, awareness and knowledge to manage their working future.
Don’t buy into the pseudoscience surrounding the multigenerational workforce.
Organizations and leaders often fall into the trap of believing common wisdom about the mix of generations in the workforce. People within generational age definitions differ in some ways, perhaps, such as their career aspirations, but they also share many interests and traits. Instead of catering to a specific age cohort by creating enticements and benefits they supposedly want – whether gen Z, gen X, millennials or boomers – take an intergenerational approach. Leverage the complementary strengths inherent in each generation and treat people as individuals.
Most workplaces are like broken, short escalators. People get stuck at the top, and the blockage cascades all the way down.
People start their careers on the first step of an escalator and move up steadily throughout their tenure with a firm. Some people move up faster and others slower. Some stall, but for the most part, the escalator analogy holds – or it did at one time. Today, the escalator has broken down in most firms: People reach the top too soon, with no off-ramp until retirement. The stairs get backed up. This has a considerable cost for the firm. Employees stuck on the escalator and those just walking in place at the top both disengage. Those at the bottom see a quagmire, and lose hope within a broke, outdated system. They quit, further feeding the stereotype that younger workers hop from job to job.
“Embracing unfounded beliefs is more than foolish. It is bad business. Faulty premises lead to poor decisions – decisions that may affect morale, productivity and the bottom line.”
In response, firms focus too much on the entry level, including encouraging those at the top to leave. Pushing older workers off the escalator isn’t the solution. The more older workers who are in the economy, the more opportunities emerge for younger workers. Firms should lengthen the escalator by finding more and better options for older workers as they approach their legacy career stage.
“Research demonstrates that the productivity, drive and contribution of older employees who choose to stay in the workforce compares positively with their younger coworkers.”
Myths about older workers harm them, their organizations and the economy. The untrue stereotypes that older workers cost more and produce less, can’t learn new aspects of their jobs, don’t take feedback well, and so on, lead to the notion that employers should retire them. No data or evidence support these myths. Firms should conduct research and analyze their own workforces. Executives, HR officers and managers must upgrade their knowledge and competencies.
The Talent Revolution will benefit those who view talent objectively, rely on evidence, and avoid myths and stereotypes.
The myth that a firm saves money by shedding older workers with big salaries and replacing them with younger employees with smaller salaries leads to rash, expensive decisions. Income mostly peaks in mid-career. The costs of hiring, onboarding, training and bringing a person up to productivity can add up to more than the difference in a young person’s salary versus a veteran’s. Younger workers need more time off to deal with family responsibilities. Older workers are more reliable and, on average, take fewer sick days.
“People make ageist comments all the time, completely oblivious to the underlying meaning or implications of their words.”
Younger workers notice how employers treat older workers. If a company dismisses, disrespects or excludes older staff members, people will make plans to leave before the firm begins to consider them old. Instead, let different jobs, careers and individual differences determine the right retirement age. Engage with workers – old, young, black, white, male or female – as individuals. Withholding opportunities and training from older workers can park them at the top of the escalator and clog your system. Present older workers with options to learn and to shift careers. Many will move on happily.
“Leveraging the considerable talents of your mature cohort is not an act of kindness to an aging workforce: it is the smart business thing to do.”
Equality and objectivity includes accountability. Leaders and managers must maintain performance standards. Whether 25 years old or 75, workers must perform at the levels that their employers set for their positions. Age gives no one the right to coast. Take the same approach to the intergenerational workforce as you do to the multicultural workforce.
“Both boomers and millennials believe that the line between good work and a good life can blend, and that work satisfaction is best realized when you can be yourself, both at work and at home.”
Don’t allow age to differentiate. For example, if you changed the workforce culture to encourage employees to be responsible for their career development, or if you emphasized teamwork and collaboration in your strategy, don’t exclude older workers from also making these changes. Equip them with the training and tools they need to adapt to the culture, and hold them accountable. Expect managers to hold career conversations with older staff as they do with younger workers.
Organizations that won’t tolerate gender, racial or other discrimination barely notice ageism.
While most organizations combat discrimination and stereotypes involving gender and race, ageism gets little to no attention. The vocabulary of ageism pervades society and organizations so much that you don’t notice it. Because ageism occurs subconsciously, it is difficult to address.
“Ageism is so deeply rooted in our culture and lexicon that finding a neutral or positive word for older workers is a challenge.”
For example, leaders may feel progressive in striving to make millennial hires feel special. Their actions and decisions may subconsciously shove older contributors out of sight. Even when firms include older workers, they can perpetuate ageist myths. Many organizations make older workers act as mentors and expect them to transfer knowledge to younger workers. This puts older workers in roles that suggest retirement while implying that the future resides only in young workers. Older workers perform as well as or better than younger employees.
CEOs, CHROs, HR professionals and managers must partner to address engaging and retaining older workers.
Corporate C-level leaders must deal with workforce management issues beyond succession management. Demands for better leader development, knowledge management and relationship building require direction from the top. Instead of referring to employees as their greatest asset, CEOs should think of them as talent equity. Whereas assets depreciate until fully written off, equity appreciates, especially as you invest in it. Like an engaged employee, equity becomes more valuable over time.
“While the boomer population is similar to other generations in terms of engagement factors, they are uniquely excluded and disconnected from career development as a mechanism for driving engagement.”
With a like-minded chief human resources officer (CHRO), firms can think differently about all workers, including older ones. This helps the employer’s brand as leaders treat everyone, even departed talent – alumni – as valuable equity. It improves employee attitudes toward continually increasing their value to the firm.
“By the time employees are in their early 60s it is entirely possible they have not had a forward-focused career discussion with their managers for more than a decade.”
Develop a stronger, talent-centric culture that communicates respect for all employees and supports legacy careers. Vice presidents of HR must elevate themselves into the CHRO role, as talented vice presidents of technology morphed into chief information officers. Newly minted CHROs must lead their organizations through the talent revolution. They should develop data savvy enough to direct the development of the right metrics and models to enable them to learn and share vital workforce insights.
Human resource leaders and practitioners should identify pivotal positions that rest on older workers’ skills and interests, and then meet with executives to determine how to create those career paths. They should make sure everyone has the skills and tools to manage their own careers, including self-assessments and other career path tools that link to developmental pathways. Leaders in HR also should build and support alumni networks.
Before any of this can work, though, first-line leaders must get on board to reinforce the talent culture and to support employees in taking responsibility for their careers. From regular career conversations with each employee, to having real performance discussions, no one knows the pulse of the workforce better than supervisors and front-line managers. With this knowledge, managers can serve as a bridge between high-level strategy from executives and real action throughout the organization.