Ageing Workforce Management
Work Life Continuance Program – An Ageing Workforce Solution
The P2 Group Work Life Continuance Program provides employers with a tangible solution to the reality of an ageing workforce. The Program addresses the Silver Tsunami1 that is fast approaching all employers and the need for a Human Maintenance Schedule.
Silver Tsunami1
People are living longer and fertility rates are reducing, which is resulting in more mature people leaving the workforce than younger people entering the workforce.
The global economic downturn and loses in superannuation has influenced 30% of mature workers to consider working until they are at least 70 years of age, and a further 15% of mature workers to not retire and keep working until they physically can not work any more. Only 30% of mature workers aim to retire at 65 years of age. The remainder plan to have a graduated retirement by reducing to part time work.
Amazingly 80% of people over 60 years of age do not have an exit strategy and have never discussed the topic with their managers. This must change moving forward. Managers must have this conversation with their people.
In a desperate attempt to cope with the underfunded pension systems, governments are raising retirement ages and making it more difficult for companies to shed older workers by introducing tough age discrimination laws. Even so, companies will be confronted with a wave of retirements as the baby boomers leave work at some point in time … whether at 65, 70 or 75 years of age.
Most companies have an outdated model which assumes that people receive pay rises and promotions on the basis of age and then leave when they reach retirement. Companies have dealt with the burdens of this model by periodically “rightsizing” older people out of the business. The link between age and pay will need to be broken, as this link currently ensures that people get more expensive even as their capacity declines.
In 2010, the aged-to-working-age ratio (the proportion of people aged over 65 to people of traditional working age 15 to 64 years) is projected to be 20 per cent. This is projected to rise to 37.6 per cent by 2050.2
Human Maintenance Schedule
Millions of dollars have been wasted by employers over the years as a result of not sustaining the performance of their people once they begin working, despite the impact that people have on efficiency. Rather than considering people as assets to be preserved, too many employers treat them as liabilities, frequently replacing people with business critical knowledge and skills for no reason other than length of service. Managers need to implement a “maintenance schedule” for their human assets, in the same fashion as a factory does for its machine assets.
Managers typically have the same expectations of their people in regards to output and production whether the person is 40, 50 or 60 years of age, even though the manager has contributed nothing to maintaining the person’s functional capacity. Managers would not have the same expectations of their machinery without a maintenance schedule.
Workforce management and workers’ compensation is linked, due to the risk of injuries and claims rising with age. Taking no action will result in increased WorkCover premiums.
As people age there is deterioration in eyesight (in terms of sharpness, peripheral vision, depth and colour), hearing, muscle tone (strength and flexibility), reaction time, and mental processes (slower recall rates and less effective short-term memory). They may also experience personal health problems, stress due to rapid changes in technology, increased family care responsibilities (support an elderly family member).
Most managers do not know how to optimise under-performing people and are not aware how much they are costing the overall operation. This happens because organisations historically have had little knowledge of their peoples’ functional capacity. Process efficiency and reliability are influenced by the performance of people and sustaining good performance can be achieved through predictive maintenance. The cost of predictive maintenance of people is less than preventative maintenance and significantly less expensive than reactive maintenance, which is too often in the form of WorkCover claims.
Once predictive maintenance is achieved, the best companies will move to proactive maintenance, which builds on predictive monitoring to identify and eliminate or minimise the root cause(s) of physical and mental health conditions in people.
| Maintenance Practice Used |
Companies 2009/10 |
Aim for Best Companies |
| Reactive |
70% |
10% |
| Preventive |
20% |
20% |
| Predictive |
8% |
30% |
| Proactive |
2% |
40% |
Leadership, systems and training are required to implement an effective predictive maintenance program. Leadership or a champion inside the organisation must recognize the need for change and have the authority to implement the changes required. Partnering with P2 Group will provide the expertise through occupational therapists and workforce management consultants.
Benchmarks are essential for monitoring progress. They will include before and after monitoring of peoples’ functional capacity. Regular assessments let the managers know if the person’s functional operation is below par, often identifies what is wrong and what is needed for a fix. Data collected can provide diagnostics which employers can use to improve their processes.
Training is important to educate people (even those who are unwilling because of the unknown concerning their job). More than 80% of workers over the age of 60 do not have an exit strategy and have never discussed the matter with their manager. This must change.
A proactive people maintenance system can be established that supports process performance, minimises overall human capital costs, meets the employers’ duty of care under the Occupational Health and Safety Act and sustains the business operation.
The P2 Group Work Life Continuance Program addresses the Silver Tsunami1 that is fast approaching all employers and the need for a Human Maintenance Schedule.
1 The Economist, 4 February 2010, Business will have to learn how to manage an ageing workforce.
2 Australia Government statistics, January 2010, Intergenerational report.
Click here to contact a P2 Group consultant for further information.
