Managing an Age Diverse Workforce

In a world of continuing labor and skills shortages, ignoring the older talent in your organization could be a waste of critical leadership potential and a loss to economic recovery, according to a new report from Odgers Berndtson. The report looks at what the firm calls the “greying talent pool” and how this group can be essential to your company’s success!

July 25, 2024 – The recent emphasis on creating truly diverse workforces and leadership teams has seen action on underrepresented groups like women, ethnic minorities, and the LGBT+ community. But when it comes to offering opportunity for all, in a fair manner, one group is frequently overlooked: the over-50s. And companies disregard this group at their peril, according to new report from Odgers Berndtson’s Christiane Pietsch and Dung Hoang.

“The sad fact is that too many workers aged over 50 are routinely being overlooked for promotion, despite possessing the essential knowledge and experience needed to fill the leadership skills gap,” Ms. Pietsch said. “Companies stand to waste the wealth of knowledge and critical experience that this talent pool holds if they fail to do more to engage these professionals.”

It’s a talent pool that is certainly growing: the greying of the workforce is a very real trend, according to the Odgers Berndtson. “As is the aging of our whole society,” the report said. “With longer life expectancies and advances in healthcare, the employment rates of older workers has risen tremendously over the past decade.” The Bureau of Labor Statistics forecast that by the year 2028, 25 percent of the workforce will be workers over the age of 55.

“We need to shift the mindset and change the conversation around aging,” said Ms. Hoang. “We need to appreciate the value and benefits of the older workforce, and recognize their experience is a competitive advantage for employers.”

The Odgers Berndtson report explains that it might be thought that laws against age discrimination would improve the hiring of older workers, but there is little evidence in favor of this. “The age discrimination laws seem to have improved the position of those employed, but not helped those mature workers seeking work,” the study said. “Viewed this way, the laws may reinforce the tendency of employers to retain older workers, but not hire them. But once hired, too many employers are stunting progression paths for over 50s, losing out on the vital skills and experience offered by older employees.”

Your 50+ Years Could Be the Best Time to Lead

Research from the World Economic Forum shows a more age-diverse workforce delivers better performance overall: a survey of employers revealed 87 percent thought the over-50s were “a valuable resource for training and mentoring” and 86 percent “an important source of institutional knowledge.”

Based in Munich, Christiane Pietsch is head of the financial services practice in Germany which she joined in 2005. She focuses on senior executive assignments in the insurance industry. With many years of experience in the sector, Ms. Pietsch has extensive knowledge about all areas of insurance, reinsurance and insurance broker.

So, how does an over-50 have a stronger ability to lead? “For one thing, a leader at that age can be better at solving interpersonal or abstract problems,” the Odgers Berndtson report said. “They tend to value the future just as much, if not more, than the present. Also, over-50s tend to have developed the ability to regulate emotions and cope with negative feelings.”

According to a study by AARP and AON Hewitt, the 50+ segment of the workforce also continues to be the most engaged age cohort across all generations. They demonstrate the emotional and intellectual involvement that motivates employees to do their best work and contribute to an organizations’ success. All very useful in a leader, the Odgers Berndtson report explained. They are not lacking in entrepreneurial spirit either: U.S. statistics from MIT and Northwestern University indicate that a 50-year-old entrepreneur was 1.8 times more likely to achieve high growth than a company founder in their 30s.

Stable, But Not Stuck in Their Ways

The Odgers Berndtson report notes that older people do bring a certain stability to their roles. “They are not constantly looking for the next big opportunity to climb the ladder like younger workers,” the search firm said. “They tend to know exactly what they want to do and are focused on getting the work done. However, this does not mean they are complacent and lack ambition, and are wrongly assumed to lack the desire to learn and progress into more senior positions. In fact, they are just as keen, if not keener, than their younger colleagues to grow and develop.”

Research from the IZA Institute of Labor Economics highlighted how older people are just as capable of learning new things as their younger peers. The study found that those who are close to retiring are just as interested in learning new skills as their younger peers, even if there is no strict need for them to do so.

Treated Properly, Loyalty is Also a Factor

Since older workers are typically more satisfied with their jobs, they also tend to stay longer, according to Odgers Berndtson. The firm says this saves companies the countless hours and financial resources screening, hiring and training new employees only to find them leaving shortly after for ‘greener pastures’ in the quest to ascend the career ladder.

“Having been working in a particular industry or sector for many years, over-50s also have something extremely valuable: the professional networks that they have built up over the years of their career, something that can be leveraged to competitive advantage in favor of their employer,” said Ms. Hoang. “Those years of experience and rich bank of knowledge has other positive outcomes: helping to develop and mentor more junior employees. They can also play a role in fostering collaboration, cohesion and resiliency within their teams.”

The Challenge of Multi-Generation Cultures

There is a challenge though, in maintaining an age-diverse workforce with a leadership to match. How do you create a culture that allows multi-generations to thrive cohesively together? “Prejudices must be overcome on both sides, like the young leaders who regard older leaders as too conservative and stuck in their ways,” the Odgers Berndtson report said. “Those critical perceptions are related to a sense amongst younger leaders that they’re at their peak, their younger colleagues have much to learn, and their older colleagues are somehow past their best. On the other hand, the older leaders regard younger leaders with some prejudice too, as lacking real experience, commitment and not respecting senior leaders.”

Dung Hoang has been with Odgers Berndtson since 2004 and is a member of the automotive and industrial practices in Munich. She recruits executives and specialists for industrial concerns, renowned automakers and suppliers as well as for the ICT industry, with a special focus on search mandates in the Asia-Pacific region. In addition, she is a member of the human asset review (management audit) practice.

Odgers Berndtson explains that a healthy and productive culture that bridges those generation gaps is one where everyone is able to buy into the organizations’ purpose. Of course, the study explains that it isn’t easy to achieve that. Many leaders have failed, both young and old.

Think About Talent Differently

To create a culture that gets the most out of all the leadership potential in your organization, Odgers Berndtson says to ask yourself a few questions:

Have you fully examined (and tackled) just how big a reality ageism is in your organization? Not just with regard to leadership, but also in areas like pay, bonuses, performance, promotion and recruitment statistics.

“You certainly need to analyze your age profile data to identify those potential leaders who might have been ignored,” the firm said. “And ensure that learning and reskilling are appropriate for all, and for the jobs of the future.”

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