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As people live longer and the world changes, the topic of age has become an increasingly pressing subject in the workplace. The age talent gap is a challenge faced by many organisations as they struggle to manage a multigenerational workforce. In the absence of a clear solution, many organisations fall back on unfounded stereotypes that influence their decision-making process.
By bridging the age talent gap through inclusion, organisations can unlock important economic growth and avoid a cycle of negative consequences.
The consequences of age-related phase-out
Generation gaps and the phase-out of older workers are common results of old stereotypes in the workplace. Age-related phase-out in the workplace refers to the practice of systematically replacing or reducing the employment of older workers based on their age. This can bring about a multitude of consequences that may not be initially apparent. For example, it leads to a loss of experience and knowledge, a difficulty in finding skilled replacements, and legal risks.
While the current Baby Boomers fear losing their value and jobs to the younger generations, phase-outs are not only negative for them. If Gen Z and Millennials employees witness Baby Boomers being side-lined, a boomerang-effect expectation is created that this will happen to them one day, having an immediate effect on productivity and revenue. It also creates a generational divide within the workplace with each group distancing themselves from the other as the narrative paints them as a threat. This carries through the life cycle as new generations move through the workforce, and with less generational dialogue overall, productivity and potential go untapped.
The economic benefits of bridging the age gap
Research has shown that if we can stop the phase-out and bridge age gaps in the workplace, the global economy will benefit hugely. According to the Golden Age Index report produced by PwC, the GDP of OECD countries is estimated to be boosted by $2 trillion if the age gap is closed. In Switzerland, where population ageing transpires as evidenced by the Swiss Federal Statistical Office, laws surrounding retirement age are coming under scrutiny and firms are increasingly feeling the threat of labour shortages.
Each year, retired workers make up a higher proportion of Switzerland’s total population. Meanwhile, the proportion represented by young people entering the labour force remains consistent. The combined impact of these trends means that by 2030, the Swiss labour market is likely to face a shortage of up to half a million workers. Therefore, the economy will have to make better use of the talent pool if companies are to remain competitive in the long term and maintain the right skills in their workforce over the coming decades.
Our most recent 2023 Hopes and Fears Survey has revealed that one-third of workers globally say their company won’t be economically viable in ten years’ time if it continues on its current course. Notably, Gen Z workers are the most pessimistic with 49% saying their company won’t survive another decade without change compared to the 22% of Baby Boomers who share the same sentiment. Confidence in long-term business longevity is key to retention and bridging the age gap will allow for greater opportunities to address the concerns of younger generations. One in four employees say it is likely they will change jobs in the next 12 months, 35% being Gen Z. Given the current economic crisis and talent shortages, this level of job dissatisfaction and turnover is simply unsustainable.
The solution: inclusion
So, how do we solve this generation gap problem? Simply put, inclusion is the solution to the negative cycle of ageism in the workplace. However, despite the global recognition that multigenerational workforces drive growth, less than half of companies include age diversity in their diversity and inclusion initiatives according to a survey by the Living, Learning, and Earning Longer Collaborative Initiative. Embracing age diversity through inclusive strategies helps eliminate stereotypes and biases whilst enhancing psychological safety in the work environment.
This promotes cross-generational dialogue to identify improved approaches for organisations. For example, in the aim of combatting increasing labour shortages, open and inclusive dialogue around generational expectations of working time can provide a potential route to resolution. PwC’s 2022 demonstrated that 51% of Gen Z believe that choice in when they work is important and another report outlines that 35% of Baby Boomer’s wish to reduce hours but work past retirement age. An open-mindedness towards Gen Z's desire for flexibility and Baby Boomers' desire to work longer not only creates a supportive workplace but also a more productive one as employee morale is boosted by accommodating their individual needs.
While it can appear that different generations have different priorities and areas of concern when it comes to their work life, the diagram below highlights just how many common themes overlap. Though Baby Boomers prioritise public pension programmes for financial security in retirement, and Gen Z expect organisations to align with their values and offer personal growth opportunities, there is cross over in many key areas. These include flexible working, health and well-being, professional development, financial security, and job security. Understanding and addressing these core concerns can therefore create an inclusive and supportive workplace environment for all employees, regardless of their generational background.
Best practices for bridging the age gap
Further findings from our 2023 Hopes and Fears Survey conclude that Baby Boomers are more likely to feel aligned with a company’s values and directions at 63% compared to Gen Z at 55%. Baby Boomers are also significantly more satisfied with their jobs than younger generations at a rate of 64% as opposed to 53% for Gen Z. This may imply a disconnect between the organisational decisions being made by often more senior executives and the desires of younger cohorts within firms. Leaders must craft a narrative around the vision for the future of their organisation, that is in line with the company’s purpose and mission and encourages all employees across the generation spectrum to get involved, which helps create ownership and inclusion.
There are some key areas to focus on in bringing age diversity to the forefront of your mission. Consider implementing some of the best practices below to tackle the age gap.
Workforce Hopes and Fears Survey 2023
Findings for Switzerland. With the war for talent and employee motivation high on the corporate agenda, organisations need reliable intelligence on the hopes and fears of the workforce. Interested to learn about what our latest survey revealed?
Clear DE&I policy
Establish a clear and comprehensive diversity, equity, and inclusion (DE&I) policy that incorporates age diversity and ensure it is communicated to all employees.
Returnships
Some companies offer senior level professionals who have been unemployed over two years to work on professional assignments and receive mentoring.
Inclusive employee lifecycle
Ensure that recruitment, promotion, and retention policies are void of all potential age or other demographic biases and stereotypes and based on merit.
Inclusive Mindset training
Conduct regular training sessions and workshops for all employees to address unconscious bias and promote inclusion.
Employee resource groups
Set up and facilitate ERGs to help create a safe space for intergenerational communication and enable learning and overall employee well-being.
Inclusive communication strategies
Adapt communication strategies according to the different communication styles and preferences of your employees.
Learning and development
Provide learning and development opportunities for employees of all ages to enhance their skills and stay up to date with industry trends.
Flexible work arrangements
Provide flexible work arrangements to allow employees of all ages to balance their work and personal responsibilities and ambitions.
Cross-generational mentoring
Promote cross-generational mentoring and reverse mentoring programmes to facilitate knowledge sharing, intergenerational communication, and collaboration.
It is crucial to understand the circularity of the age gap within organisations. Understanding and adapting to the differing wants and needs of each generation by fostering an environment of open and frequent intergenerational exchange is essential to create a sustainable culture where all employees feel acknowledges and heard. This approach not only satisfies the current needs of the workforce but also establishes trust in the long-term viability of the organisation.
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