Aging Employees and Human Resource Management – Avoiding the Talent Crunch

It’s important to understand the age spread of employees in your company. As baby-boomers age and retire, and younger workers are recruited there are many opportunities for both synergy and tension. That means new challenges for managing diversity. Obviously, maximizing the performance of any company requires the right blend of youth and experience. Tracking and maintaining age diversity also has important implications for the perception of a company both internally and externally. HR departments use age demographic knowledge to keep an eye on possible pending retirements to be better prepared to fill talent gaps, or to offer benefit packages that are the most relevant.

Another motivation to have an awareness of the demographic of age is to avoid areas of potential bias or discrimination. There are laws in the U.S. that prohibit discrimination in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training and benefits against workers over the age of 40. Over recent years about 21,000 age related complaints are brought against employers each year via the Equal Employment Opportunity Commission.

Times when layoffs are occurring can be a particularly fraught situation for employers who aim to reduce pay and health insurance costs by cutting staff. Older workers, who tend to be more expensive could be targets for discrimination, and litigation could ensue if it’s proven that age has been used as a basis for firing. While often hard to prove, a New York Times article described the case of Spirit AeroSystems who had a discrimination lawsuit brought against them when it was discovered nearly half of the 370 people laid off in 2013 were over 40 years of age.

The numerous stereotypes often made against older workers, however, don’t hold up to the scrutiny of workplace research. Accusations of being burned out or unproductive aren’t a reality when employers are asked to rate older employees for loyalty, reliability and productivity. Other misconceptions, such as older workers not being as creative or having diminishing cognitive or technical skills, are also either untrue or made up for by older workers who bring other strengths that come with experience. So it makes sense for progressive companies to be encouraging age diversity to maintain a vibrant, productive workplace.

To allow a better understanding of the age demographics of your organization, OrgChart Pro has the Age Ratio metric built into our organizational chart software. The Age Ratio is a calculation representing the distribution of different age groups within an organization. This gives a visual snapshot of various age segments and allows the HR professional to track age data as it pertains to other relevant data such as salary treatment, promotions and performance ratings and rankings. These demographics can also be broken down for the different business units of the organization to compare age diversity across departments.

Gender Ratio is another automation calculation offered in OrgChart Now software. It’s a simple ratio of Male / Female which can be applied across division, department, location or job type to identify imbalances. Compelling evidence from a 2017 study by McKinsey and Company showed that companies in the top quartile for gender diversity in their executive teams showed 21 percent more profitability than those in the fourth quartile. The impact of gender diversity on profitability and value creation alone makes it a metric to carefully watch and manage.

OrgChart makes it easy to visualize the ethnic diversity metric in the workplace both across the organization or within specific organizational units. Applications of learnings gleaned from the data could include hiring, compensation, promotions and terminations.

Careful analysis and modelling of age, gender and ethnic demographics can help lead a company towards the best hiring strategies based on the proven benefits of an inclusive and diverse workforce.

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