Emerging Challenges for HR:

Issues arising from the ageing workforce.

Author: Eric Allgood CMgr CAHRI MAITD

In this blog I shall discuss the issues created individually from, and the apparent interrelationship of the ageing workforce dilemma, the Generation Y expectation and attitude shift and the need for more flexible working arrangements to compete for talent.

With the benefits of generational diversity, comes the requirement of an organisation to understand each generation and their specific attitudes and needs. I conclude that whilst some may argue against generational stereotypes, there is sufficient evidence to indicate that the consistencies within the differing generations regarding attitudes to work are cause to act. Further to this, not only will organisations that take proactive approaches to these problems attract and retain superior staff, they will create a marketing edge against their competitors.

Challenges Analysed and Discussed
Ageing Workforce

With the retirement of the baby-boomer generation, organisations need to ensure they prepare suitably to cover the impending skills shortages. The loss of this knowledge will need to be addressed through the appropriate sharing of the knowledge and through means of keeping baby boomers in the workforce longer.

Over the next decade this entire generation will be finding their careers plateauing due to the shrinking opportunity of promotional success. This apparent lack of opportunity needs to be addressed through redirection or redefining of success meaning and providing opportunity for psychological success.

This psychological success may take numerous forms; it may be simply offering better work to personal time; job share or the like. However, from the perspective of the organisation, the use of the inherent experience and skills in mentoring new workers and offering reward for the achievements of those mentored may keep the “boomers” in the workforce longer and solve the predicted skills drought.

Baby boomers are concerned with their ongoing health and well-being, they are a possibly one of the last generations that put the workplace first, which constantly competed with their family values therefore; leading into their retirement years they are more interested in putting their family first and having their work be more flexible around them.

The loss of baby boomers in the workforce extends far beyond just the loss of talent and a shrinking workforce; there are economic factors regarding having such a large volume of the population potentially relying on the Government for pensions. In fact, the 2014 Australian Federal Budget indicated that the Australian workforce dependency ratio is moving from 5:1 to 2.7:1 in 2050 (compared to 7.5:1 in 1969).

The workforce dependency ratio is the number of people working compared to those over the age of 65 (the traditional retirement age). From a purely economic view, this is unsustainable and there is a requirement to keep baby boomers in the workforce longer. The drain on Government resources inevitably results in higher taxation and therefore greater business costs; however, this will have to be the subject of an entirely different blog.

Generation Y (Me Generation)

A stark contrast to baby boomers, generation Y (or Millenials as they like to be known) have a very self-centric view on their working life. Gen Y were born somewhere between 1976 and 2000 (see Table 1) and have the stereotype branding of being lazy, in need of instant gratification and the most transient of any generation regarding their work loyalties.

-  Small Business Assistance and Advisory Service

The school of thought that Gen Y lacks respect and commitment to the job has been debated with the alternative school of thought that Gen Y just has a different perspective on life and there has been a shift in paradigm to hold overall gratification in life more important to that of “pleasing the boss”. It is clear from research undertaken that Gen Y do hold managers who show support and interest in their careers in high stead.

This issue organisations face is holding onto Gen Y long enough to benefit from the  investment placed in their career, and this may (potentially) be solved through a diversity of flexible work options affording greater access to their preferred leisure time and through the utilisation of baby boomer mentoring as outlined above.

With stability being an issue, an organisation that invests the time in proper training and Gen Y “me time”, there may be a breaking of the perceived fickle employment habits. There still remains the issue of the perceived “know it all” characteristics of Gen Y.

Training baby-boomers in appropriate training/teaching techniques may assist in keeping the baby boomers in the workforce longer through a perception of psychological and have the effect of creating greater loyalty with the Gen Y.

With Gen Y also known as the NetGen, companies that associate their baby boomers and Gen Y in 360o training processes, where the knowledge and process of old can be nurtured into the era of the internet and social media, are bound to not only attract and retain superior staff, but will, in effect become more competitive within their marketplace.

Flexible Work Arrangements

Potentially the “glue” that may assist, at least in part, in solving the issues outlined in above. Whilst achieving a better work/leisure balance is attractive across all generations, I will solely look at the issue regarding Generation Y and Baby Boomers.

The quantity of quality evidence that engaging flexible work arrangements assists in reducing stress, burnout and behavioural issues is staggering. This has been evident for over a decade, in fact in 2002 a survey of the American Accounting Association showed CPAs on flexible working arrangements reported higher job satisfaction, less burnout and were less likely to look elsewhere for.

By offering workplace flexibility an organisation is aiming at lowering their employment costs through lower turnover whilst increasing their employee loyalty.  The Australian Human Resource Institute list a variety of options for flexible work arrangements such as:

  • School Scheduled work / part year working where employees work in accordance to their children’s school semesters. Likely to be attractive to Gen Y;
  • Annualised hours where working hours are adjusted to meet peak and/or quiet periods. Potentially attractive to all generations as it affords employees greater time off in return for longer hours when the organisation has the requirement;
  • Phased Retirement Mature workers gradually move from full-time work to retirement. This would work well with an ongoing mentoring role where the employee gradually gets reduced hours as they increase the competence of their replacement.

The importance in flexible work arrangements is that they meet the requirements of the company and the staff. Whilst there are numerous considerations with respect to flexible arrangements, this paper is focussed on their potential to both retain baby boomers and attract Gen Y and the overall benefits to the organisation. The inherent difference in priorities between the generations illustrates the necessity for numerous flexible arrangements within an organisation to afford the company the ability to attract and retain across the differing generations.


As we approach the oncoming storm of baby boomer retirements organisations will find as much importance in retaining mid-career and retirement eligible employee as they will in hiring high quality new people. However; the need to obtain high quality new people may also rely on their access to the availability to gain and learn from the retirement eligible.

Organisations can either blithely ignore the impending loss of the majority of their skills and knowledge or they can work towards retaining their working knowledge and through flexible work arrangements and superior mentoring programs attract the best talent available within the marketplace.

Through understanding the differences in generational ideals, motives and ethics and developing organisational practice, training and flexible work arrangements; organisations will not only ride out the wave of retiring baby boomers, but also succeed along the way. Such proactive process should result in a reduction in work-family conflict creating greater attraction throughout the generations.

The process outlined here specifically affords baby boomers the ability to share their vast knowledge and experience whilst showing respect to Gen Y. With this respect, which they so voraciously crave, Gen Y are also presented with an organisation that is obviously willing to innovate and stay progressive, an ideal Gen Y closely associates themselves with.

There are learning across the breadth of business sizes here, and there are many a case study to support the success of innovative programs. Ideas such as hiring Baby Boomers on part time, or flexible arrangements with the intent they take on the extra responsibility of teaching the younger generation/s are having instant effect in many organisations. Government funded programs and incentives for hiring candidates over 50 exist, including traineeships.

Whilst the subject of a future blog (I am sure), I will end with this. (as an example) Would your auto repair enterprise benefit from a semi-retired mechanic doing a traineeship in administration so they can answer calls and speak with customers? Would having that person also give you the opportunity to take some of the pressure off your qualified mechanics in delivering on the job training? Just one of an infinite number of options available!