Age Diversity in the Workplace

An Organizational Perspective

Silvia Profili, Alessia Sammarra, Laura Innocenti, Silvia Profili, Alessia Sammarra, Laura Innocenti, Miguel R. Olivas-Luján, Tanya Bondarouk

• Publisher: Emerald Publishing Limited
• Year: 2017
• Print ISBN: 9781787430747
• eBook ISBN: 9781787432420
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Organisations, as well as individuals and societies, continue to struggle with the complexity associated with unprecedented demographic changes. Workforce ageing and increasing age diversity are not transient phenomena, and their implications are compounded by the combination of several global trends like workers' increased mobility and migration, as well as increasing gender and ethnic differences. This demographic pressure compels organisations to question conventional ways of management thinking, doing and being in order to capitalize on the benefits of an age-diverse workforce. This volume bridges theoretical and empirical approaches in order to illuminate the challenges of valuing employees at any point in their professional lives, from youth to retirement. Embracing perspectives that span from the individual to the organisational levels of analysis, the book explores the two distinct but intertwined phenomena of workforce ageing and increasing workforce age diversity. The volume is divided into two parts. Contributions in the first section raise questions about the meanings of age and age diversity, as well as how and when age matters in organisations. The second part of the book examines the role and contribution of HR practices in forging an age-inclusive workplace.

PART I
FRAMING AGE AND AGE DIVERSITY IN ORGANIZATIONS

Chapter 1

The Workforce Demographic Shift and the Changing Nature of Work: Implications for Policy, Productivity, and Participation

Catherine Earl, Philip Taylor, Chris Roberts*, Patrick Huynh* and Simon Davis*

Abstract

Population ageing, coupled with economic uncertainty and a shifting workforce structure, has directed the attention of public and organizational policy makers toward the potential contribution of older workers and skilled migrants in meeting labor supply shortages in ageing populations. This chapter presents labor supply and demand scenarios for 10 OECD countries and examines trends in the labor force participation of older workers against the backdrop of changes to the nature of work in an era of globalization, casualization, and, increasingly, automation. Brief analysis of each country’s situation and policy responses indicates that China, Japan, and Korea stand out as being at particular risk of being unable to maintain growth without undertaking drastic action, although their areas of focus need to differ. A limitation of the study is that GDP projections used in labor demand analysis were based on historical rates and represented past potential and a long-run average of historic economic output. Future research might also undertake comparative analysis of case studies addressing different potential solutions to workforce ageing. A key implication of the study is that there is a need to take a blended approach to public policy regarding older workers in a changing labor market. Where migration has historically been a source of labor supplementation, this may become a less viable avenue over the near future. Future shortfalls in labor imply that economies will increasingly need to diversify their sources of workers in order to maintain economic growth. For public policy makers the challenge will be to overcome public antipathy to migration and longer working lives.

Keywords: Workforce ageing; older workers; public policy; productivity; labor migration

*The views expressed in this chapter are the views of the authors, not Ernst & Young. This chapter provides general information, does not constitute advice, and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Liability limited by a scheme approved under Professional Standards Legislation.

Introduction

By 2050 around a quarter of the global population will be aged over 60, although this will be unevenly distributed with some countries being older and ageing more rapidly than others. Europe, for example, currently has a quarter of its population aged over 60 (United Nations, 2015). High-income countries, particularly the developed economies of North America and Western Europe, are faced with populations that are ageing as a result of increasing longevity and falling fertility (Burke, Cooper, & Field, 2013; Phillips & Sui, 2012). Population ageing, coupled with economic uncertainty and a shifting workforce structure, has directed the attention of public and organizational policy makers toward older workers and their potentially significant contribution to the performance and growth of the economy within these countries. But, at the same time, skilled migration has also played a role in meeting labor supply shortages in ageing populations.

Workforce ageing presents challenges for governments, employers, and individuals. This chapter will present data on population ageing and the ageing of the workforce internationally and trends in the labor force participation of older workers. It will describe the emergence of pro-work public policies targeting the ongoing employment of older workers, the changing workforce age composition, and what this will mean for the management of a diverse workforce, and the intersection of the changing nature of work with expectations about retirement and longer working lives in terms of individual careers. It will present labor supply scenarios for selected OECD countries and present Australia as a detailed case study which may provide a template for comparative studies of labor supply in ageing societies.

Challenges of Workforce Ageing

In industrialized countries experiencing population ageing work at older ages is presently framed as an economic and social good. For example, Staudinger, Finkelstein, Calvo, and Sivaramakrishnan (2016, S281-2) argue that past academic and policy debates that focused on negative aspects of prolonging working lives “protected people from work” and overlooked the potential positive outcomes of work in later life. On the other hand, Maimaris, Hogan, and Lock (2010) and Sahlgren (2013) point out that, while there may be some social and physical and mental health benefits to working longer for some individuals, benefits are unlikely to be universal. This notion that working longer is a good occurs against the backdrop of changes to the nature of work.

In ageing societies, such as Australia, labor supply has been a driver for policy responses centered on skilled migration, retaining young workers, and increasing participation and securing productivity of workers as they age (Rolland, 2004). Organizations use a number of strategies to address labor supply shortages, such as recruiting new “hidden” sources of labor such as women, migrants, people with a disability, and, perhaps, older workers; increasing the labor supply of existing workers through measures such as extending the hours of part-time workers; temporarily outsourcing or hiring through a recruitment agency; and, as a longer term strategy, investing in labor saving technologies (Henkens, Remery, & Schippers, 2008).

Changing labor markets require differentiated responses to address labor supply shortages. Currently there are few studies that have found labor supply shortages are addressed by hiring or retaining older workers. A notable exception is Taylor, McLoughlin, Brooke, Di Biase, and Steinberg (2013) which found that many private sector, public sector, and large organizations in Australia (located in the state of Queensland) were open to hiring older workers to address a labor supply shortage, although they were less committed to retraining older workers, indicating a preference for a short-term “stop-gap” strategy.

More aligned with trends identified across the broader older worker literature, Loretto and White (2006) found Scottish employers turned to hiring older workers when prime age workers were not available and Karpinska, Henkens, and Schippers (2013) found employers preferred the early exit of older workers than their retention. Importantly, as Loretto and Vickerstaff (2015) stress, older workers in the United Kingdom did not necessarily desire working past a traditional retirement age, with a minority of relatively advantaged men expressing interest in continuing working and women, who often acquired new caring responsibilities for elderly parents or grandchildren, finding continuing in part-time work unsuitable or undesirable. Older women may also avoid part-time work if they are workforce returnees building a first or second career. Age-based income inequalities are exacerbated by gender-based income inequalities and these are found in both developed and developing countries. For example, older women workers in Canada have lower incomes than older male workers (Curtis & McMullin, 2016) and migrant women workers in China experience more labor market discrimination than migrant male workers (Song, 2016).

Population Ageing and the Ageing of the Workforce Internationally

In developed economies the thrust of public policy changed rapidly, from targeting the removal of older workers from the labor market through programs of early exit to encouraging their ongoing participation into late career work (Phillipson, 2009). The emergence of pro-work public policies targeting the ongoing employment of older workers occurs in the context of labor supply shortages that may be addressed by other measures including skilled migration, fertility policies, training, and increasing the participation rates of women (Buttigieg, 2011). Nevertheless, the policy focus on extending working lives and pushing out the age of final workforce withdrawal has generally resulted in a greater number of targeted policies across developed countries, as considered in detail below. This occurs on a basis that policies aimed at prolonging working lives of older employees will be more effective at increasing the labor force participation of older people than policies aimed at drawing retirees back into work or encouraging inactive older people to enter the workforce (Warren, 2015).

Underpinning pro-work policies in developed nations is a conception of “active ageing” that tends to be narrowly focused on employment activity and social engagement through the job market. This occurs despite its definition which has a positive orientation and extends to optimizing well-being and participation broadly through a range of endeavors and across the life course (Walker, 2009, 2015; see also Moulaert & Biggs, 2012).

The related and popular concept of “successful ageing at work” is unambiguous in locating active ageing as a productive endeavor within the workforce. This implicitly refers to being “in work” or “at work” as being engaged in paid employment ideally at a workplace (Zacher, 2015; see also Martin et al., 2015; Ryff, 1982). For the purpose of this chapter, we adopt this narrow definition of “work” understood in terms of full-time or part-time (including casual) paid employment. We recognize that, as the economy becomes folded into society (Adkins, 2012), work may be understood more broadly than an androcentric notion of paid employment to incorporate unpaid work, volunteering, family caring, formalized social groups, as well as other activities that contribute meaningfully to society.

Recently, attempts have been made to reconceptualize successful ageing at work in line with the changing nature of working that is shaped by globalization, casualization, and automation. An example is Kooij (2015) who proposes reconceptualizing successful ageing at work as sustainability at work and calls for attention to be paid to continuous person-job fit between the changing person and the changing nature of work in order for employees to maintain health, motivation, work ability, and thus successful ageing. A different approach is taken by Dropkin, Moline, Kim, and Gold (2016) who introduce “blended work” consisting of using information and communication technology (ICT) to enable working “anywhere and anytime” as a potentially suitable transition from work to retirement, albeit one that does not necessarily involve maintaining workplace-oriented social connections. Blended work may be conceptualized as a subset of the much promoted concept of bridge employment (Zhan, 2016; see also Alcover, Topa, Parry, Fraccaroli, & Depolo, 2014).

Even with a targeted policy focus on extending working lives, discrimination and disadvantages for older workers continue to limit their opportunities, particularly when they lack resources, education, or marketable skills. Workers aged over 60, in the United Kingdom, for example, are more likely to be recruited into lower status, lower paying jobs with few prospects of promotion (Lain, 2012). Older workers may be excluded from skilled migration programs, such as the case in Australia (Biggs, Fredvang, & Haapala, 2013), from formal employment in entirety due to relatively young official retirement ages and perceptions that older workers lack competitiveness, such as the case in China (Yang & Wang, 2010) and Korea (Higo & Klassen, 2014), or from “re-employment” programs that exclude those deemed unnecessary and may result in poorer terms and conditions, such as the case in Japan (Taylor & Earl, 2016a). Self-employment, including via the informal economy, may offer a solution for policy makers or older workers themselves and, in recent years, has been much promoted. Self-employment rates of older workers aged 55–69 in Canada, the United States, and the United Kingdom are relatively high and rise for each year of age, particularly after age 64 (Schuetze, 2015). Such “encore careers” may offer quality work that contributes meaningfully to society, but these may also be potentially exploitative in compelling older workers to take responsibility for their own economic and social well-being and absolving society of this responsibility (Simpson, Richardson, & Zorn, 2012). Moreover, any successes in this arena may be drawn upon as evidence that older workers are self-enabled to fend for themselves in the absence of policy or welfare provisions. While older workers internationally are protected to differing extents by national legislation proscribing discrimination on a basis of age, disability status, sex, and/or race, it is worth noting that accompanying the policy push to extend working lives is a competing discourse a...

Table of contents

• Cover
• Title Page
• Part I Framing Age and Age Diversity in Organizations
• Part II Age Diversity at Work. Rethinking Organizational Practices
• Index