Companies’ Worries About Aging Workforce Don’t Accord With Level of Response
Research from NC State University’s Poole College of Management shows that companies are greatly concerned by the aging of the national workforce but are failing to react proportionally in making employment changes to address the issue.
“An important challenge for businesses will be addressing how workforce aging will affect labor costs, productivity and the sustainability of the organization,” professors Beth Ritter and Robert Clark, Ph.D., write. “Specifically, what changes need to be made in employment and compensation policies to minimize the adverse effects of an aging workforce and enhance the advantages associated with senior employees?”
Ritter and Clark examined the responses of 143 human resource managers at companies of diverse sizes and industries to a series of surveys and activities that measured the levels of concern they have and the types of actions companies are taking in relation to the aging labor force.
Three themes arose as a result of the respondents’ answers: “Older employees are significant contributors to their company’s success; a significant portion of employees are at or approaching retirement age; [and] the management of the pace and timing of retirements is an important business issue,” Ritter and Clark write.
Although human resource managers are worried about the consequences of their aging workforces, few companies have enacted policies or taken action to address some of the major concerns. Most of the policy changes provided in a survey were being implemented by a small percentage of companies. “Only 20% of organizations had offered shorter hours for retirees, 27% had instituted part-year employment options for older workers and another 17% indicated that their employer planned to offer each of these programs in 2019 or was considering them for 2020,” Ritter and Clark write.
The management of the pace and timing of retirements is an important business issue. – Ritter and Clark
Other policies — those aiding in the career-to-retirement transition — had been implemented by a much larger percentage of companies. “Providing additional training to help older workers maintain their productivity” had been adopted by 40 percent of respondents, while 36 percent have modified “working conditions for older workers.”
One of the major concerns generated by the national aging of the workforce is the loss of talent that companies could experience. “Risk managers have recognized the potential effects that the loss of talent through labor-force aging and increased retirements will have on organizations currently and that they think the risk will increase in the next five years,” Ritter and Clark write.
Ritter and Clark point out that human resources and risk managers know that now each has an “ally … to support their proposals for aging-workforce interventions,” Ritter and Clark write. “[But] it is also important to know that [human resources] may experience challenges from the risk group to become more proactive to manage the risk exposure coming from the aging workforce.”
The paper, “The Workforce Is Aging: Are Companies Responding?,” appears in WorldatWork Journal’s fourth-quarter 2019 edition.