The Need to Retain Older Employees

The world’s population is now 8 billion. In the coming decades, the world population is set to rise at a slower rate. More and more countries have started seeing population declines. In fact, more than 60% of the world’s population now lives in a country with a low fertility rate. These diverse trends — population growth in some countries and population decline in others — have resulted in a world more demographically diverse than ever before.These diverse demographic trends means that the median age in Sub-Saharan Africa is 24 years younger than that of Europe. Since 2019, the global population growth rate has fallen below 1%. That’s less than half its peak rate of growth – of 2.3% – in the 1960s, as global fertility rates continue to fall.

A key determinant of the world population rate is the average number of children that women have over their lifetime – the ‘fertility rate’. Fertility rates have fallen rapidly across the world in recent decades. In 1950, the average woman gave birth around 5 times. Since then, fertility rates have more than halved. In 2021, this global figure was 2.3 births per woman. Malta’s fertily rate in just above 1 birth per woman.

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.

All this leads us to one important consideration. The post second world war “baby boom” is long gone and none are expected in the near future. Generation Z (born 1997 – 2012) has fewer people than the Millennial generation (born 1981 – 1996) and Generation Alpha, which follows Gen Z, is expected to be even smaller.

This means that with each Generation there will be fewer younger workers entering the labour market. So those employers that do not plan ahead and do not think beyond today’s working-age population will likely struggle to build a reliable workforce that can maintain operational efficiency and effectiveness.

Some are looking at technology for a solution. To fill the gap created by fewer new workers entering the labour market, through technological solutions, especially those offered by Artificial Intelligence. However will that be enough and can technological solutions fill all the gaps?

I believe that business organisations will be forced to reconsider their 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.

Businesses will need to support employees past the traditional retirement age by shifting strategies from recruitment to retention. Retaining older workers will be a pivotal approach that business organisations will need to improve operational efficiency and grow the bottom line. Such retention of older workers can be improved when inclusive design practices are used across three dimensions: compensation and benefits strategies, working arrangements and workplace design.

  • Compensation and benefits: Companies will need to create novel support and compensation models like for example, menopause and special grandparents’ leave, in order to reward and retain older talent.
  • Working arrangements: 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. 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: 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 talking to employees of all ages and abilities.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.

However key to retaining older workers will be TRAINING and RE-SKILLING. Training in areas related to cross generational communication will become ever more important. Communication preferences and generational dialects can be major obstacles to collaboration. Different core values and codes of conduct across generations need to be tackled and training is needed to make sure that a smooth communication path is formed.

Workforce resilience requires making reskilling a strategic priority. Businesses will be forced to retrain and re-skills their employees to develop new expertise and prolong their employees’ careers. For example, older employees in manufacturing and services industries could move into training, safety or compliance roles that take advantage of their operational experience and reputation with colleagues.

Given the demographic shifts impacting labour and consumer markets, businesses will need proactive approaches to retain older workers. This will impact they way we work and also team dynamics for sustainable growth well into the future. Thus the need for business organisations to create the right environment to retain older workers will soon become a necessity.

IN A RECENT STUDY AMONGST FAMILY BUSINESSES HELD BY THE FAMILY BUSINESS COMMITTEE WITHIN THE MALTA CHAMBER AND THE FAMILY BUSINESS OFFICE, IT IS CLEAR THAT THE TOP PRIORITY FOR FAMILY BUSINESSES IS THAT OF “RETAINING THEIR EMPLOYEES”. THE RESULTS AND INSIGHTS THAT EMERGE FROM THIS RESEARCH AMONGST FAMILY BUSINESSES, WILL BE PRESENTED DURING AN EVENT TO BE HELD ON THE 1st FEBUARY, 2023 AT 9AM AT THE MALTA CHAMBER.

CLICK HERE TO REGISTER FOR THIS EVENT

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