While human resource professionals have amassed quite a body of knowledge on how to assemble and sustain a competent, loyal workforce, they face a daunting challenge over the next 10 years. The talent pool is getting significantly older. Between 1996 and 2006, the fastest growing segment of the workforce in the United States will be those aged 55 to 64.
Based on its worldwide study, DBM predicts that the career choices and challenges of an increasingly older labor pool will have a profound impact on organizations’ strategies for securing and developing talent in the coming decade.
As the labor pool ages, organizations need to embrace human resource management practices that support a truly multi-generational workforce. Leveraging the labor pool's demographic strengths will be one of their most important competitive strategies for the coming decade.
Research Highlights / Implications for Managers
The following are key findings of DBM's research, coupled with insights and tips for managers and HR professionals to maximize these demographic opportunities:
- Younger workers less apt to network. While more than half (51 percent) of Mature Workers cited networking as their source for finding a new job, only 36 percent of Generation Xers cited the same. Rather, this younger generation tends to rely on advertisements (19 percent) and search firms (18 percent). On average, only 3 percent of all workers found opportunities through the Internet.
Implication for Managers: Managers should adapt their recruitment strategies accordingly; for instance, understand that running ads and employing the aid of search firms may prove most effective for filling entry- and mid-level positions. To attract senior candidates, it managers should tap into their own networks as well as those of their employees.
- Switching industry or job function appeals to all ages. One in two study participants, regardless of age, changed industry or job function successfully.
Implication for Managers: Workers today recognize the value of developing transferable skills. Company recruiters will therefore meet greater success by looking beyond immediate industries and functions to fill positions. Additionally, to retain top talent, organizations should offer career advancement and development opportunities that will continually motivate workers to remain loyal.
- Older workers aim for more flexible/alternate career options. While the majority of Generation Xers (60 percent) and Baby Boomers (54 percent) selected full-time work, fewer Mature Workers (31 percent) opted for the same. Rather, Mature Workers were more likely to seek more flexible situations, such as part-time work, self-employment and consulting.
Implication for Managers: Compared to their younger colleagues, older workers' often wider skills bank, greater financial flexibility and fewer family commitments provide them opportunity and desire to explore non-traditional career options that are consistent with their evolving lifestyle and aspirations. Understanding these differences will help companies better tap this generation's expertise and leverage it as an integral part of their workforce.
- Time to re-employment increases with age; salaries plateau, then decrease. Workers over the age of 50 take nearly twice as long to identify and secure new employment as do their younger counterparts under the age of 30. Further, with the advance of years, the expectation of a salary increase diminishes gradually, with Mature Workers having a 50 percent probability of experiencing a pay cut in future career endeavors.
Implication for Managers: Many factors may contribute to older workers' career transition delay, including their changing career priorities, greater financial flexibility and desire to land positions in middle or upper management which, by their nature, are more limited in number than entry-level posts. Age discrimination — although illegal in many countries — can be a factor as well. In letting older workers go, therefore, ample career transition support should be provided and severance packages should be designed with these special considerations in mind. Conversely, when recruiting older workers, managers should identify the organizational, cultural and financial barriers to employing them, and develop solutions to attract and retain them. Non-monetary incentives (i.e. continuous learning, autonomy, time to pursue charitable interests), for instance, may be as effective as money in attracting a talented older generation of workers.
As the global workforce ages, organizations will need to rethink their selection, development, retention, and transition strategies in order to retain long-time, high-contributing employees and attract new talent that brings innovative ideas and up-to-date knowledge and skills -- irrespective of age.