Many employers are wary about hiring or even maintaining a primarily ageing workforce at their organisation despite many possible benefits. Because of the concerns surrounding this talent-management issue, employers must consider the full range of economic implications of an ageing workforce, including both cost and productivity factors. The key to turning this issue into a business opportunity starts with a better understanding of its advantages and challenges.
• Older workers are somewhat less likely to be disengaged and slightly more likely to be moderately or highly engaged at work than younger groups, according to a recent Towers Perrin Talent Report.
• Because disengaged workers are more likely to leave their employers, it presents a retention risk for employers. This could mean a higher cost to the organisation due to the high expense of employee turnover.
• Turnover costs can be as much as 50% of an annual salary for many positions, so the benefits of maintaining a stable workforce and avoiding turnover often exceeds the increased compensation and benefits costs of ageing workers.
• Hiring or retaining additional older workers may not cost much more than younger workers simply because these workers could offer enhanced skills such as experience, maturity and engagement.
• Even though cognitive declines can occur with age, knowledge and experience in a field can offset this. Communication and decision-making skills acquired with experience at an organisation can often make up for decline in manual dexterity.
• Average pay tends to increase with service and age, but this can also result from movement up the career ladder in an organisation. So, older employees are not necessarily more expensive in terms of pay.