Aging work force
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The document discusses the critical challenges faced by organizations due to the aging workforce, particularly the impact of the retiring baby boomer generation on labor supply and costs. It highlights trends indicating a shortage of younger workers and emphasizes the need for companies to adapt through strategic investments in health programs, training, and innovative management approaches. The text also introduces tools like the 5V-scorecard for measuring and managing workforce productivity and creativity in the context of an aging labor population.
Aging work force
- 1. Mehran University of Engineering and Technology, Jamshoro, Sindh Pakistan ASSIGNMENT #2 HUMAN RESOURCE MANAGEMENT SUBJECT TEACHER: PROF. DR. RIAZ AHMED SOHAG SUBMITTED BY: MOHAMMAD YOUNUS (08IN70) DEPARTMENT OF INDUSTRIAL ENGINEERING & MANAGEMENT Submitted by Muhammad Younus 08IN70 Page 1
- 2. AGING WORKFORCE INTRODUCTION With the increase in competition the business in developed countries are facing the lot of critical challenges. One of them is the aging workforce. Today the executives of organizations are wakeup to realize that their firm will encounter a wave of retirement over the next decades as the baby boomers of the past World War II reaches to retirement age. To retains in this highly competitive market and adopt a strategy in order to win the order acceptable & winning criteria requires a lot of efforts of young workforce but the aging workforce wont do so . WHAT IS AN AGING OWORK FORCE??? The actual definition of the aging varies great depend upon the source. Legally an aging worker considered to be 45 and older age. (The age discrimination employment act 1967 ) Other agencies consider an aging employee to be 50 years or older. (The committee of economic development) And the survey of human professional revealed that management varies greatly in their opinion with age ranging being b/w 40 to 70 years. (Society of human resource management June 2003) AGING WORKFORCE TRENDS There are basically two trends of aging workforce i) Baby boomers ii) generation X BABY BOOMERS Baby boomers (born b/w 1946 to 1964) comprise almost 46% of the workforce & they are rapidly approaching to retirement. Those born in 1946 have revealed the age of 60 in 2006, with an expected significance wave of retirement starting from 2006 onwards. Submitted by Muhammad Younus 08IN70 Page 2
- 3. GENERATION X The generation X includes those workers who born b/w 1965 to 1983 and they would naturally called as the replace of baby boomers. The generation X workforce comprises almost 30 % of the workforce the end result is that there are not going to be enough workers to meet labors force requirements. The population trends regarding generation X are fairly certain at this time is whether the baby boomers will be swift or gradual. Important to remember Recent studies of the older worker by American association of retirement of workers (AARP) indicate that the many Americans care choosing to work beyond the rational retirement age. For some, the reason is financial they do not have suffientest savings to retire. For other there is a drive to remain connected to their work, finding that it provides a sense of purpose & the opportunity to remain socially connected. Infect according to recent AARP studies expected two third of the baby boomers plans to contributed to work during their retirement year- by 2010. CRITICAL CHALLEGES OF AN AGING WORKFORCE In this modern world where business is highly competitive and for the survival its requires highly human competencies, skills, brainpower, innovative, skill miss peoples for corporate sustainability but what is surprisingly impact in today’s world is the booming effect of workforce. To be with the booming (aging) workforce organizations are strive to face a lot of challenges. Some of them are as follows. ESCALATING COST Companies have been focusing in reduction of cost through downsizing, outsourcing, reengineering & other methods during most of 1990’s and early 2000’s. in most instance, admirable cost efficient & lean organization have been successfully achieved. Now however, the world is entering a new era of unavoidable cost escalations, especially due to the significantly increases cost of skilled human resources. It is simple issue of supply & demand, the shrinkage supply of talent & skills and increasing demand for high level knowledge & innovative labor force, leading to workforce cost escalation. Furthermore, the aging workforce requires significantly additional investment in the right type of company facilities, health programs, appropriate technological supports, Submitted by Muhammad Younus 08IN70 Page 3
- 4. retention & rejuvenation incentives & further training & development. All of this mean a imminent escalation of cost for any enterprise that requires the right types pf expected to move in the senior management ranks, will not grow but significantly decline ( by 19 % in the U.S, 27 % in Germany, 19 % in the U.K, 9% in Italy and respectively 10 % & 8% in JAPAN & CHINA ). Conversely, the number of aging workers will increase subfamily e.g in the U.S the workers aged 45 to 54 will grow by 21 % , & the number of 55 to 64 years old will grow by 52 % As a result of this retaining the aging workforce causing o creates within an organization because of empowerment in the authority & not following the act. THE PRESSURE OF INNOVATION (The Necessity to re-invent company value (products & services) in the knowledge – networked global economy) Another reason why the aging workforce is becoming a critical issue right now is the global pressure on innovations. It is a well know fact that since mid – 1990’s the world has shifted from an industrial economy to a knowledge- networked, globalization, speed of information exchange, & rates of new product / service innovation. Combined with increased speed to market in globally – integrated demand & supply chain. With a declining & specially aging workforce the pressure to maintain & expand strategies & operations tools to contain such costs within competitive parameters. It also requires a new mindset concerning employees & their related cost in the future, enterprise will see their workforce increasingly as an investment rather than just cost to be contained or so controlled. CAN THESE CHALLENGES BE MANAGED ??? How, what , where are the solution for my companies ??? The challenges of an aging workforce can indeed be managed, but as indicated above it will require a paradigm shift for enterprise leadership & organizational management. Three essential pre-requisites of such a paradigm shifts are i) REALIAZATION == Realization, based on a through understanding of the interested advantage concerning the aging workforce. ii) Insight into the implications of an aging workforce of an enterprise business model. iii) Strategic & operational capabilities to conceive (design) & implement appropriate solution- what we term action fields in this article to handle the challenges of an aging workforce. Submitted by Muhammad Younus 08IN70 Page 4
- 5. THE PERFORMANCE OFAGING WORKFORCE SHOULD BE MEASURES?? As we know that every management expecting from the workforces the two most value added dimensions i-e increase productivity & increased creativity. Productivity is basically the efficiency mechanism and is concerns, with either greater output for same input, or sense output for less input. Existing management already minders that the aging workforce is necessary causes the declining the productivity because an aging workforce posses lack of creativity and innovations. There fore today’s management is be very much careful in managing the aging workforce as means to at least the actual productivity. 5V- SCORECARD for measuring the performance of an AGING WORKFORCE The various attempts are made to measure the performance of an aging workforce; the 5V- scorecard is one of them. It is basically the concept of an integrated aging workfare scorecard tool consisting of face critical aging workforce areas to manage, guide and measure both creativity & productivity of an enterprise aging workforce. These are five basically organizational fields… i) enabling new managerial mindsets ii) Facilitating new knowledge management process. iii) Implementing appropriate health ( physical, mental & emotional ) process. iv) Adopting relevant human resource management (HRM) programs & practices & Faciliting appropriate work environment Submitted by Muhammad Younus 08IN70 Page 5