Later Retirement Spells Problems for Motivating Younger Workers
Of all the problems thrown up by the ailing economy, an aging workforce is certainly one of the smaller ones, but for those in leadership positions, recognizing its effect on the next generation of talent is likely to be key in retaining that talent beyond the new retirement datesof their more experienced employees.
Back when the financial crisis hit, it didn't take a genius to figure out that the implosion of the stock market would force many workers to delay retirement in an attempt to make up for the lost value in their 401(k) accounts.
Now we're beginning to see just how big an effect that phenomenon is having on the makeup of the workforce: a recent survey of workers aged 62 and over by Golden Gateway Financial found that the percentage planning on retiring before 70 dropped from 67 percent before the crisis to 40 percent.
The math I've attempted for figuring out how many people that actually means will be staying on in the workforce beyond retirement age is a little fuzzy, but it's safe to say that it's in the millions. (It's perhaps as high as 10 million, based on the unlikely event of the 27 percent shift affecting all 38 million projected citizens in 2010 aged between 60 and 74.)
The ramifications of that are startlingly clear for the workforce, and, depending on your perspective, it's not all bad news.
For one thing, talent and experience will drain from the workforce at a much slower rate than previously expected — certainly no bad thing given the panic prior to the recession over the impending loss of the baby boomers and their attendant skill sets from the workplace.
Recognition that the skill set thing goes two ways is crucial; just as it is important to retain experienced employees with deep knowledge of their positions, companies and industries, it is vital that those same employees are also capable of keeping up with the shifting times and technologies.
In an example of the sort of mechanism that's likely to become more common as the workforce continues to age, The Wall Street Journal reported earlier this week that IBM has seen a rise in "reverse mentoring" since implementing an online mentoring tool in December 2008. While many employees have used the tool to find traditional mentoring arrangements, the Journal reports that many senior employees are using it to find younger colleagues who can teach them about issues such as social networking.
All those factors point to good news for leaders in hiring positions in years to come, if not for those seeking employment. The relationship between higher levels of competition for positions and a more productive, creative workforce is already well established. The IBM example suggests a new trend that we're likely to see more of as time progresses, however: an unprecedented level of collaboration between people at different stages of their careers, as those closer to retirement age face up to the prospect of trying to succeed in a new environment populated increasingly by "digital natives."
Where leaders will need to be careful is in recognizing that, while age and experience are valuable, and inter-generational collaboration priceless, workers at all stages of their careers will still feel the need to be recognized for their contributions.
The tendency in any organization is to have the people with the experience (older workers) in more advanced positions. Under the emerging system—with mentoring relationships becoming two way streets and slower natural attrition at the higher end of the career cycle—companies will have to work harder to ensure that younger workers don't feel stifled in terms of career progression.
That's especially important for those who may have been in line for promotions prior to an older colleague's economy-enforced decision to stay on.
More Executive Strategies Including:
Phil Stott is a staff writer at Vault.com. Originally from Scotland, he now lives in New York, and has also lived and worked in Japan, South Korea and Eastern Europe.
Comments? Send them to firstname.lastname@example.org