Organizational Challenges of an Aging Workforce

INTRODUCTION

Change is the new constant that all organizations, regardless of size or industry must deal with. Mozenter (2002) describes five macro forces at work on a global basis that will direct and define the nature of Organization Development going forward. He names the continuous emergence of new technology, the on-going changes in the business climate, the mass movement of forming partnerships and business alliances, the ever increasing diversity in the work force especially the shifting age demographics of workers world-wide and the needed changes in the structure of work to respond to these realities as the predominant forces that will shape the future of OD. These trends are in agreement with other sources such as Kansas reflections (2010) and the McKinsey Quarterly (2007).

This paper explores the challenges for organizations as they attempt to respond to a shifting demographic in the global workforce to an older population and the respective opportunities created for OD. The foundation will be laid by defining a number of those challenges and their implications for organizations. A brief summary of expert opinions as to how prepared organizations appear to be to meet these challenges will be offered, followed by a discussion of the emerging role of the OD practitioner as an integral change agent.

Specific challenges due to this shifting demographic and the implications for OD intervention are addressed individually: these include creating an appealing culture, ensuring continued health and productivity, filling vacant leadership positions and attracting and maintaining top talent.

ORGANIZATIONAL CHALLENGES DUE TO AN AGING WORKFORCE

The median age of workers is increasing on a global basis (AARP International, 2007), making it necessary for organizations to prepare for a culture that supports the values espoused by an older demographic. Continued health and high productivity are becoming a major concern as middle-aged to older workers are thought to decline in these areas. This concern has historically rung true as an aging workforce does exhibit more health issues and utilizes more health services than a younger workforce, other than maternity benefits. The challenge of keeping the current workforce healthy has become a priority (Hewitt, 2009).

The Asia and Pacific and other developing countries are not as heavily impacted by aging demographics as the developed world (McKinsey, 2007). The anticipated younger workforce, however, may be largely unskilled, making them largely unsuitable for leadership positions (Reference for Business). These countries may be best served to look to the wisdom and experience the older worker brings in both leadership and the development and mentoring of the younger work force.

The competition for talent acquisition is reported by McKinsey (2007) to be "an intensifying battle" as 47% of executives surveyed cited this as the most significant trend. The top talent organizations are so desperately seeking, as described by Mozenter (2002) may be largely embodied in the very diverse age groups of the Baby Boomers and Generation-Xers. The challenges associated with Generation-Xers will not be discussed in this paper. It is surprising that organizations looking for leaders to spearhead needed changes are looking externally. McKinsey's report states that 72% of executives surveyed would not look to current staff to fill these vacancies (McKinsey, 2007). The development of current staff to fill vacancies will also not be discussed. What will be discussed are the organizational challenges directly related to attracting and maintaining mature talent.

ORGANIZATIONAL PREPAREDNESS TO MEET THOSE CHALLENGES

Organizations are beginning to recognize their need to step up efforts in motivational approaches such as offering wellness programs and re-designing job roles (Long, 2010). But does the recognition of need always result in action? The McKinsey Quarterly (2007) reports that only 19% have a clear view of how to change to meet the challenges, and 33% of organizations are only talking about change. Towers Perrin's (2005) findings concur, reporting 32% of organizations as doing nothing to prepare for the shortage of workers due to the retiring Baby Boomer generation. They also suggest that organizations will be taken by surprise when they experience serious losses of key talent and knowledge because of their unwillingness or inability to act.

Looking specifically at the changing landscape of available talent due to the aging demographic, current leadership may have their heads in the sand. Mozenter (2002) comments that organizations may not realize the urgency of needed action as survey respondents did not rate changing demographics as an immediate concern. That OD is much needed is not as much the issue as getting organizations to admit they need OD. OD practitioners have their work cut out for them as they take advantage of opportunities to create the awareness organizations lack. OD practitioners could be in a favorable position, as they may be prime motivators in guiding organizations as they face the immediate need to either adapt or re-invent themselves. Not strategizing to attract the aging workers who will soon be in great demand, may translate into a loss of competitive capacity.

Organizations appear ill-prepared to face change in general. Leadership may not recognize the magnitude of changes required to attract and maintain leaders to stay competitive in a rapidly changing business and demographic climate or may simply be overwhelmed by the extent and complexity of issues that are fast approaching. This organizational blind spot presents an excellent opportunity for the OD practitioner to step up and highlight the global implications of available talent to fill current and future roles.

THE EMERGING ROLE OF THE OD PRACTITIONER

What is the emerging role of the OD Practitioner in helping organizations re-tool their culture and prepare them to recognize the mature worker as top talent? How will organizations maximize the experience and skill the older worker brings? Are organizations equipped to embrace the development of these workers into new roles? The conventional role of the OD practitioner is that of an objective observer who facilitates the change process by reflecting back what is happening in the organization. Drawing on systems theory and behavioral science to identify root causes of problems, the OD practitioner traditionally gathers and interprets data to support findings. The OD practitioner reviews policies and processes, conducts individual interviews and organizes focus groups, after which s/he presents a diagnosis