Working with Father Time

 
 

aging workforce

The race is on to conquer death.

Silicon Valley billionaires are leading the way by plowing back profits from their information technology businesses into anti-aging research. In September 2013, for example, Google launched Calico—the California Life Company—focusing on “health and well-being, and in particular the challenge of aging and associated diseases.” Google CEO Larry Page boasted that the company could use cutting-edge biotechnology to achieve “moon shot”-style success in the fight against old age.

Calico and many other billionaire-backed health technology start-ups have been inspired by recent scientific advances. Rapamycin, for example, is one of many longevity drugs currently in clinical trials. Normally used to aid organ transplants and treat rare cancers, it has also been shown to extend the life of mice by 25%—the longest extension to life so far achieved with a drug. It also protected the mice against diseases associated with aging, including cancer and neuro-degeneration.

Technology entrepreneurs believe that harnessing such research with intensive computing techniques will produce a significant change in life expectancy. If successful, they could rapidly accelerate the global trend for longer life. Over the past four decades, life expectancy around the world has already risen dramatically—by 11 years for men and 12 years for women, according a 2012 study published in the Lancet medical journal. Even with today’s falling birth rates, the proportion of the population 65 or over will increase. In Japan, for example, 22% of the population are 65 or over, a figure that is expected to nearly double, reaching 40% by 2060.

Working for Longer

“Japan may be at the forefront of these developments, but what is happening there will affect all developed countries,” said Dianah Worman, research and policy adviser on diversity at the United Kingdom’s CIPD, the professional body for human resources and people development. “It’s impossible to believe you can support a growing aging population on the income contributed by a shrinking number of younger people, so something has to change. People will have to work for longer.”

That trend has already begun. In 2014, Gallup found the actual average age of retirement in the United States had risen from 59 years of age in 2004 to 62. The U.S. government has passed laws that could accelerate this shift by raising the age at which citizens can receive full retirement benefits from 65 to 66, with further planned increases to 67 and beyond for those born in 1960 and later.

Despite these changes, employers remain stuck in the past, planning for the workforce of yesterday, which was younger and likely to retire before the age of 60, she said. As more people work longer, businesses will need to alter the types of skills, talent, remuneration packages and other benefits they offer.

“Too few businesses are thinking and behaving strategically to manage these issues,” Worman said. “They need to stop being reactive and think about how they will keep the momentum going in their businesses as the skill sets of their staff continue to change.”

High Social Cost

Altering employer attitudes to the coming demographic shift will likely be a major challenge. U.S. academic institutions are among the first organizations to see the effect of longer working lives biting into existing employment structures. Most have a large proportion of staff over 55 years of age, but their response to the problem has been half-hearted. While some organizations had introduced wellness programs, better retirement pathways and flexible working arrangements, “Promoting Workplace Longevity and Desirable Retirement Pathways Within Academic Institutions,” a research paper published in 2012 by Brian Kaskie, Kevin Leicht and Steven Hitlin, found that almost all had done so on an ad hoc basis with little or no strategic planning. Even fewer had measured how well those initiatives achieved their objectives.

Over the past four decades, life expectancy around the world has already risen dramatically—by 11 years for men and 12 years for women.

In academia, the main issue has been that faculty with tenure positions are exempt from mandatory retirement age and are deciding to work longer. They still feel healthy and want to contribute to their subject areas. “It’s fantastic, from an individual’s point of view, to be able to stay on to teach, research and enjoy a good social life,” said Brian Kaskie, associate professor in the health management and policy department at the University of Iowa College of Public Health. “But there is a significant institutional social cost. The challenge is that as these people continue in the workforce, they are doing so at a considerably higher cost than the younger faculty.”

The social cost is significant—not least for the younger staff cut off from tenure positions and the pay and benefits attached to those prestigious roles. And while institutions express concern over the cost of benefit packages, staffing and budgetary issues, Kaskie said, few identify the root cause of these problems: the number of aging employees in the workforce. Instead of tackling the issue at source, he said, many institutions have raised tuition fees, increased revenue by boosting the number of foreign students they teach, or pressured faculty to bid for research grants.

Despite all this displacement activity, the solution can be quite prosaic. “What we found among the institutions that were taking the initiative was that most had hired someone with training to specifically to work on these issues,” Kaskie said. Once in place, they tended to implement the necessary measures. “What’s shocking is that most universities won’t do it because they don’t see it as a priority.”

While many academics want to work, they do not necessarily need to stay within academia, or even earn a full salary—something true of many people approaching retirement. Feeling useful is sometimes enough. Kaskie said that a number of campuses have begun running retirement fairs to help academics find potential routes into suitable alternatives. That has included putting professors into civic engagement projects, where they can use their knowledge in voluntary initiatives that have a social dimension. In addition, institutions are increasingly offering wellness programs so that older staff can stay healthy longer.

New Pathways for Promotion

If employers do not tackle the promotion bottleneck that can be caused by senior staff holding on to the top positions for longer, young people’s prospects will suffer. The energy sector has already experienced what it is like to have a dearth of young people. When the industry downsized in the 1980s, few graduates entered the sector. Today, as a direct result of what became known as the “brain-drain,” many energy companies have concentrations of staff in their mid-to-late 50s and in the group spanning the late 20s and early 30s, but few in between. That has made businesses sensitive to succession planning issues because of large concentrations of staff in senior positions. Like senior academics, senior executives are not always best placed to see the need for change.

“You need top management to own succession management and skills planning, otherwise it does not work,” said Todd Hoffman, a principal at PwC, and the firm’s leader for the greater Houston market human resource services practice. Hoffman said that, while management often thinks of such issues in terms of how they would replace a departing member of staff, top management should be thinking about what skills they need to achieve the organization’s wider objectives. It is critical to have a specific program that makes the link between succession and performance integral to the way the business trains and hires, he said. That includes bridging the age gap.

“Organizations need to speak to their older workforce, understand when people are thinking of retiring, what paths they may find attractive—such as flexible, part-time work—and build that into how they plan for their skills and talent needs,” he said.

Motivating the younger generation, for whom the traditional career ladder of promotion is likely to be unavailable, requires different thinking. “Younger people often want to know that their career is progressing at some level and that management is thinking about them,” Hoffman said. Instead of climbing a career ladder, companies could adopt the concept of a career lattice, where a sideways move is understood as a positive part of a longer-term program for career development. “If employees understand this is for the long-term good of both their own career and the organization, they can buy into that,” he said.

This approach is time-consuming and more expensive than traditional human resources planning because the business has to consult regularly and in some depth with each staff member. Career outcomes have to be linked to management’s performance targets and compensation. Without it, he believes organizations will struggle to achieve an effective age balance in the workforce.

Addressing Age Discrimination

Most organizations still discriminate against older staff, according to the U.S. Centers for Disease Control and Prevention. Typically, these workers have fewer opportunities for training, face inflexible work schedules and employers worry that productivity may be lower.

But the idea that fixing productivity problems associated with older age is expensive is not based on evidence. Car manufacturer BMW predicted that the average age of its employees would increase from 39 years old in 2007 to 47 by 2017. It manned its assembly line with a mix of people typical of the 2017 demographic and, after consulting with staff, introduced some mostly ergonomic changes to the shop floor. These included replacing cement floors with wooden surfaces to reduce knee strain, introducing orthopedic footware for comfort and installing barbershop-style chairs that people could sit in to work to reduce physical strain. In total, the alterations cost the carmaker $50,600—less than the price of one of its top-end models. In the first year, the “pensioner assembly line” experienced a 7% increase in productivity that rivalled lines staffed by younger workers, and enjoyed a reduction in absenteeism from 7% to 2%. They also reported zero defects in the products produced.

Not only can age-adjusted working be beneficial for employers, it can increase personal longevity. A 2013 report by the U.K.’s Institute of Economic Affairs found that there is a positive correlation between working longer and better health. According to Gabriel Sahlgren, the report’s author and now director of research at the U.K.’s Centre for Market Reform of Education, while retirees’ health improves in the first year or two of retirement, it then declines quicker compared to people of the same age who still work. In this context, work may be part-time and involve flexible hours, but it helps people keep mobile and mentally engaged, while providing social contact and status.

“We need to rethink the retirement-work balance because we are at a turning point for what that is going to mean in the future,” Sahlgren said. “Do we have to believe that people need to be fully employed or fully retired?”

He argues that the current social norm of viewing employment as an all-or-nothing activity can be damaging. “The key is not that we should increase retirement in a way that is detrimental to people’s health, but that we should make it easier for people to redress the balance between work and health in a way that is socially sustainable.”

 
Arthur Piper

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About the Author

Arthur Piper is a Nottingham, U.K.-based freelance writer and editor.

 
 
 

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