Bracing for a Silver Tsunami

Bracing for a Silver Tsunami

Bracing for a silver tsunami

As the populations of industrialized nations age, the challenge of harnessing their knowledge and skills before they leave looms every closer. High time for a new way of working.

by Jerry Wanichko

 

It is inevitable: the world is getting older. According to the UN, the number of people over age 65 will have reached 22% of the global population by 2050. Indeed, the World Economic Forum’s Global Agenda Council on Ageing claims that this demographical shift will be the key factor shaping social and political life on regional, nationaland global levels over the next 35 years. For businesses, that means that the risk of losing valuable knowledge and experience as older employees leave is high.

But just as risk also represents opportunity, some innovative approaches to redefining the age agenda are already underway. A 2015 census by Japan’s internal affairs department showed that roughly 33.9 million people – 26.7% of the country – were over the age of 65. Lower fertility rates and higher life expectancy have combined to form a “silver tsunami” of older people who are rapidly leaving the workforce and becoming more dependent on social support. Although historically the Japanese government has enforced age restrictions on workers, the mandatory retirement age has recently been increased from 60 to 65, making it easier for older workers to continue working beyond the normal age of retirement. Full compliance is expected by 2025. As a result, many Japanese seniors either simply continue working or opt to partially reduce their hours. Still others leave full employment to become consultants or advisors to their employers, helping to train their younger colleagues and adding a valuable depth of experience. Culturally, Japan treasures the wisdom of old age, so the shift towards encouraging older employees to continue working has been seen as both a legitimate and respectable development.

Tapping into a Reliable Workforce

In other countries, national government policy has played less of a role. Germany, for example, is ranked as the country with the third-highest percentage of people over 60. This workforce shift has meant there are significantly fewer skilledworkers in the country – something of a challenge for a country renowned for its skilled craftsmanship and engineering talent. Instead of relying on the government to adjust employment law, though, individual companies have madechanges themselves in the hope of tapping into a reliable, highly experienced and available workforce.

Car manufacturer BMW is a prime example: in order to accommodate an older assembly line crew, BMW has made massive factory overhauls to make working life more comfortable for older employees. The company believes that making ergonomic changes to work stations – such as better lighting, wooden floors instead of concrete ones, adjustable shelving and supportive seating – will help make work easier and more appealing to older workers. By working with physiotherapists, doctors and factory planners, they have implemented fitness areas and quiet rooms in some of their factories to better support their older staff.

Considering Germans tend not to retire until they are 67, and today’s graduates will be expected to work until at least 69, these changes are expected to support a wide generational span of professional experience, which BMW hopes will pay off. The energy sector is another industry which, due to its reliance on specific, highly skilled technical workers, is at particular risk from the retirement of the baby boomers: the US Department of Labor estimates that 50% of the industry’s workforce will be eligible for retirement within the next five to ten years. The fear of losing valuable experience has prompted companies in the field to look at new ways of harnessing that knowledge to pass it on to younger colleagues.

Experienced Hire

For example, many companies have begun initiatives which encourage older workers to act as mentors to junior employees. One chemical manufacturer is offering incentive packages to select employees who are eligible to retire in 2017; a condition of accepting the package is agreeing to specific “knowledge transition deliverables.” The trend has become so prevalent in the United States that the term “experienced hire” is used to refer to hiring older workers who bring a skillset that is different to that of younger employees.

Importantly, the social and financial benefits of retaining older employees in the workforce are beginning to be better understood: the COGITO Study, an investigation conducted at the Max Planck Institute for Human Development in Berlin, showed that older people’s day-to-day cognitive performance varied far less than that of their younger peers. Older workers were not only more reliable but also more productive, and were less likely to make expensive mistakes. This is likely due to learned strategies for overcoming problems and the higher emotional stability gained with age. Indeed, it is exactly the lack of such skills that often causes despair amongst employers of new graduate recruitsor younger hires. It is problems such as deficient interpersonal and problem-solving skills that cross-generational interaction can solve. Younger employees learn how to communicate in the workplace and develop ways of doing things that older colleagues bring with them. In short, they learn how to work.

It is inevitable: older employees will eventually go. But how much of that knowledge and experience they take with them is ultimately up to their employers.

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