When there is a projected 15% to 30% increase in the number of employees aged 50 to 64 years old in the workforce by 2030, how should organizations prepare themselves for sustainable growth and development?
How can organizations balance their automation and digitalization ambition with the growing demand to be part of the solution for population aging, especially when large proportions — between 50% and 80% — of tasks done by older workers are at high risk of being replaced by new technologies, putting them at higher risk of displacement?
Marsh & McLennan’s latest report, “The Twin Trends of Aging and Automation: Leveraging a Tech-Empowered Experienced Workforce,” proposes a different way of thinking about these questions. The report is the second in a series on aging and automation and part of Marsh & McLennan’s broader thought leadership on the Workforce for the Future.
Recasting Older Workers as Experienced Workers
An aging population has commonly been perceived as a threat to organizations and society at large, but this is changing. Projected higher costs of health care paired with a rapidly aging workforce are key reasons why population aging has widely been regarded as a societal
challenge — one that corporate leaders need to mitigate. The negative tints in the metaphors used to describe this demographic group, such as “silver tsunami,” “silver wave,” or the “grey economy,” reflect this ageist perspective.
In corporate’s quest for higher productivity and efficiency (via automation and digitalization or otherwise), older workers and their valuable experience are both underappreciated and overlooked. Instead of letting them go, reframing the negative narrative from “older workers” to “experienced workers” and building a comprehensive strategy around this emerging workforce will better prepare organizations for upcoming labor and talent shortages.
When 45% of employers globally reported difficulty in filling roles — the highest level in 12 years — experienced workers present a potential
talent source that can greatly alleviate the ongoing shortage. Retaining experienced workers does not only prevent a loss of institutional knowledge, it also ensures that companies have an in-depth market understanding and stay relevant in the growing longevity economy — the sum of economic activities driven by those 50 years old and above.
The question, then, is not why we should value and retain experienced workers, but how organizations can build a strategy around the experienced workforce.
A cohesive technological integration process around this workforce, with tailored job and talent redesign embedded in an inclusive organizational culture, will be crucial.
Job Redesign for a Tech-Empowered Experienced Workforce
Integrating technology into an organization will necessitate the process of job redesign. The key questions for executives are:
- What is the right amount of technology in the new jobs?
- How can these technologies augment the rich industry knowledge that experienced workers are bringing to the company?
- What are the necessary conditions for experienced workers to successfully adapt to these technologically enhanced jobs?
Where a healthy balance between experienced workers and technology is achieved, humans work side-by-side with robots in a complementary manner rather than one being replaced by the other. At a large automotive factory, for example, experienced workers are now working alongside table-top robots that assist workers in repetitive or physically demanding tasks. The company adopted this combination of robots and humans in response to the increased demand for customization and individualization that require a more sophisticated human touch rather than a fully automated process.
The pace of technological advances compels organizations to keep abreast of the multitude of new technological applications and actively look to deploy them to maintain competitiveness. Such an imperative presents significant workforce challenges, as rapid digitalization means employers will need to quickly upskill or reskill personnel of all generations and at all levels as jobs are redesigned. There are two lenses through which executives can examine experienced workers’ roles in this process.
First, experienced workers will need upskilling and reskilling — as will their younger counterparts. Training is most effective when tailored
to preferred learning styles. Historically, research has shown that experienced workers tend to prefer hands-on, on-the-job training and mentorship over formal-led training sessions. Mutual mentorship for technological training has also been successfully implemented in
several companies and has proven to be a useful tool for technological transformation. But, things are changing. In recent focus groups (Mercer, 2019), there appear to be two preferences emerging for the experienced workforce.
Over half are already learning new skills by multiple methods, such as digital higher-level degrees, online specialist courses or in-person coaching. These employees are ready for their employers to give them new challenges and stretch roles. They feel neglected from a development perspective, and analysis of the allocation of training budgets within organizations shows they are not wrong in this respect. Some employers are offering their rising young professionals’ fast-track development programs to experienced workers too — with very positive engagement.
The remaining group is ready to “flex down” in order to enjoy a better work-life balance, spend time in voluntary work, or care for a loved one.
Perhaps a more salient point, however, is the recognition that sometimes the upskilling needed is not at all technical. The digitalization of a company is essentially a transformative process, one in which change management skills — from problem-solving to effective communication, coaching and team building — take precedence over pure technical knowledge. These skills, along with high empathy, are those in which experienced workers tend to excel. Therefore, instead of a one-directional view on compelling the workforce to new technologies, a more effective path forward is to let experienced workers themselves shape this integration process.
The result may be the best of both worlds, as experienced workers — leveraging their rich knowledge — get technologies implemented in the most suitable way for organizations. Technology did, of course, begin in the generation of what we are now calling the experienced worker.
Given the dual trends of aging and automation, forward-looking organizations need to go one step further to fundamentally integrate technology into their business models and to empower their experienced workforce.
Revamping the Talent Model and the Role of an Age-Inclusive Culture
New and innovative talent models will also need to be explored, not just to optimize efficiency via new technologies, but also to be able to offer a more attractive employee value proposition for experienced workers.
The rise of the gig economy has brought a lot of flexibility and mobility to the workplace and offers a clear win-win for both experienced workers and organizations. As the latter benefits from the fluidity and flexibility that will enable the organization to become more agile, the former can also enjoy the flexibility that gig-style work offers.
However, the attractiveness of gig-style employment arrangements suffers from a number of structural drawbacks, such as the lack of traditional social protection benefits and formal career development, which makes the arrangement sub-optimal in the long run.
Addressing these barriers requires organizations to innovate their talent models. Mercer, for example, has worked extensively on what is conceptualized as a “Talent Pool Consortium” (TPC). A TPC is a talent pool of experienced workers among a group of companies, where a portion of each company’s workforce becomes part of a group of “on-demand” talent, to be hired into workstreams and projects by different members of the group. The new employment contract would build in training and protection benefits, and combined with extensive flexibility, offers a unique value proposition for workers of all generations.
The TPC concept offers businesses access to an on-demand talent base and the opportunity for more flexibility in staffing. At the same time, by building in these new levels of development and protections, members of the TPC can overcome the structural problems that have made the gig economy unattractive and unsustainable.
Finally, despite their critical roles in priming for a future-ready experienced workforce, job redesign and talent model redesign alone would not be enough. They need to be embedded in a non-ageist, inclusive organizational culture that does not undermine the values of experienced workers. This will demand a new vocabulary, a clear vision and values, robust stewardship, effective organizational communication and strong accountability from both the leadership and the board, and finally, a strong suite of age-friendly policies implemented across the organization.
Looking Ahead: Experienced Workforce Strategy as an Imperative
Given the dual trends of aging and automation, forward-looking organizations need to go one step further to fundamentally integrate technology into their business models and to empower their experienced workforce. Societal pressure to be a responsible employer to achieve optimal growth means that it is high time corporations refreshed their workforce strategy, with the experienced workforce taking center stage.
Wolfram Hedrich is a partner at Oliver Wyman. Viet Hoang Phan is a research analyst at Marsh & McLennan. Leslie Chacko is a managing director at Marsh & McLennan.
Options Galore: The Benefits Wave of the Future
Employers that can successfully deliver a holistic approach to benefits are poised to be ahead of the curve when it comes to attracting and retaining future talent.
Organizations are becoming increasingly aware of this reality, as more than a third (37%) said they’re making changes to their benefits package or plan to do so in the near future, according to “Aon’s Benefits and Trends Survey 2019.” While it would certainly make things easier, there’s no one-size-fits-all approach to creating the benefits package of the future given the extreme multigenerational workforce that’s in place.
“You’ve got to look across your generations and survey your employees,” said Jon Shanahan, CEO of Businessolver, a benefits administration technology company. “That’s how you get things like different leave programs that employers hadn’t considered in the past. There are different leave options around life events, whether it’s eldercare or different things around family leave outside of what state or federal regulations might have. So, I think you’re seeing innovation there.”
Part of building the right package, Shanahan said, is making sure to include plenty of voluntary options for employees. One of the most
popular voluntary options is pet insurance, which WorldatWork’s “2019 Inventory of Total Rewards Programs & Practices” survey found 33% of employers offered in 2019. Another popular benefit that has exploded in recent years is student loan debt repayment programs, which went from being offered by 10% of employers in 2018 to 26% in 2019.
In that same ilk, Shanahan said consumer accounts and emergency savings programs have also become popular. These are employer-contributed accounts that often appeal to Millennials.
“It’s just the ability to think about the generations of employees that you have and the various needs that they have and reacting to that,”
Shanahan said. “Are you thinking about someone who is pre-retirement and how they view benefits? And, are you thinking about folks that aren’t experiencing life events, so they’re maybe not as concerned about the health program, but more so they’re worried about time off and other spends in their life that hit them immediately? It’s that open view of being in tune with your employees and fine-tuning your benefits program so you can attract and retain talent.”
Aside from the voluntary benefits that are expected to continue to be popular moving forward, health-care benefits such as health savings
accounts (HSAs) are becoming more standardized and proving to be highly valued by younger generations. According to a Benefitfocus report, employee participation in HSAs grew from 50% in 2017 to 81% in 2018.
David Vivero, CEO of digital health company Amino, wrote in Forbes that HSAs are the most Millennial-friendly benefit.
“It’s an excellent way to save money while you’re in your young, healthy years,” he wrote. “Your Millennial employees will also appreciate the flexibility of an HSA, which can be used to pay for anything from acupuncture to contact lenses to medical supplies.”
Some other benefits employers are offering or plan to offer in the future include employee discount programs, long-term care insurance, commuter benefit programs and tax-advantaged options for commuter benefits.
Having a holistic approach to benefits will set an organization up for future success in attracting and retaining talent, but a key component to successful implementation is having user-friendly technology for employees to access and utilize said benefits, Shanahan noted.
“If you don’t have good technology, their first experience is bad,” Shanahan said. “For most benefits programs, the first way they’re going to interact with their benefits is through their mobile device or sitting down at their computer either before they start or on their first day.
“If it’s difficult to understand and if it’s not flexible and the platform doesn’t help the employee make a decision about their benefits, then it’s going to be a bad experience. But if the user experience is good, then they tend to think more favorably about their employer.”
Brett Christie is the managing editor of Workspan Daily.