CONTRIBUTIONS OF THE “ GREY WAVE ” TO ORGANISATIONS AND SOCIETIES
van der Walt
Department of Human Resources Management
University of Pretoria
Organisations as well as societies who do not take the values of
older persons seriously do so at their own peril.
The value of older employees to organisations
term performance success for any organisation depends on a strong
foundation of human capital. Human capital can be defined as the
economic value of people with job-relevant abilities, knowledge,
experience ideas, energies, creativity and dedication. These
qualities are often found in older more experienced employees.
One of the
major concerns for business and organisations in the next two
decades will be the aging of the global workforce. Peter Drucker,
the well-known management expert is of the opinion that this is the
result of the accelerated growth of the older population and the
decline in numbers of the younger generation.
industries are already experiencing difficulties to recruit
sufficient technically qualified people to replace those who are
approaching retirement. In the US half of the aerospace industry’s
workforce will be approaching retirement age in the next ten years
which will leave a significant gap in the industry as a whole. NASA
in the US is reputed to have twice as many workers over 60 years of
age than worker under the age of 30 years. This undermines the
programme of handing over leaderships roles to the next generation.
education faces a similar situation with many “older workers” i.e.
full professors who have worked a whole life time to become experts
in their chosen disciplines, preparing for retirement. A recent
South African daily news paper highlighted the fact that the
majority of top researchers are white males between the ages 55 and
65 years. They are not being replaced fast enough by young non-
whites and/or female researchers. This situation has for examples
forces some South African universities to extend the retirement age
from 60 to 65 years.
has the potential to devastate the South African labour market. The
country has the highest infection rate in the world. The age group
15 -25 years, especially females are most affected. These youngsters
are the workforce of tomorrow. Some of them do not even make it
through high school or tertiary education as a result of this
One of the
current aims of training and development in South Africa, is to also
give recognition to prior learning and experience. This is
particularly aimed at previously disadvantages groups. By not
valuing older, experienced workers this aim is negated.
these realities few organisations are at present making any
provision for the loss of experience when these “older workers”
retire and neither are these organisations taking active steps to
retain these workers. Geller and Stroh point out that this is mainly
due to inaccurate perceptions that older workers are of less value
than their younger colleagues.
and Spiker suggest in a recent article in Organizational Dynamics
that these flawed perceptions exist in part because organisations do
not as yet understand the contributions and value of older workers.
They argue that organisational leaders have yet to turn their full
attention to attracting, developing and retaining older workers,
primary because of the negativity surrounding older workers.
Unfortunately warnings aimed at organisations of the negative legal,
social, political and economic consequences associated with the
inattention to older workers have not been effective in convincing
employers of the value of older workers. A representative of
PricewaterhouseCoopers recently noted, “Warnings of the boomer
crisis are being ignored primarily because most companies are not in
enough pain yet, and are still in the mindset that there are too
many people at the water cooler, not too few.”
and Spiker suggest that a positive approach to the challenge would
be better received and more effective. They advocate that older
workers may contribute equally if not more value than younger
workers, because their overall human capital contribution, defined
as the sum of psychological, intellectual, emotional and social
capital or PIES is greater than the overall human capital
contribution of younger workers.
step toward a positive psychological approach to the management of
older workers is to accentuate the positive value of older workers
by dispelling two myths associated with older workers. The first
myth is that older workers are not top learners; traditionally it
has been thought that ability and skill decrease with age. It is
further believed that older workers are unable to learn new
technological changes, are unable to keep pace, are less flexible
and adaptable, have a lower zest for life and are at the stage that
they experiencing social and psychological withdrawal from society.
These views are fundamentally flawed . In 1999, Harris Interactive
conducted a nation wide survey in the US of 774 human resource
directors and found the following with regard to older workers: 80 %
have less turnover; 75% have higher commitment levels; 74% are more
reliable; 71% have as much ability to acquire new skills as their
younger counterparts etc. In response to these findings the
Committees for Economic Development concluded that increasing the
participation rate of older workers, would only add to the learning
and productivity of the workforce.
The second myth is that older workers are not top performers:
examination of several meta-analyses, which looked at the
relationship between age and performance between older workers and
younger workers, found that in many cases older adults appear to
have a slightly higher job performance than younger adults. Research
has also shown that occupational injuries occur at a lower rate to
older workers than to younger ones. Accident frequency declines
steadily up to age 64 and then drops even more sharply for workers
and Spiker propose the following organisational outcomes associated
with older workers. Older workers show increased loyalty towards
their employer and decreased turnover. While the cost of staff
turnover is enormous, approximately 84% of businesses in the US do
not formally record turnover costs. This figure is probably similar
for South African organisations. One cost figure used in South
Africa is that an employee’s replacement cost can be as high as 60 %
of the annual salary of the position in question. What this means is
that organisations do not realize what they are loosing in staff
workers have an enhanced institutional memory. As a result of
their experience and time within an organisation, older and longer
serving workers have more knowledge of the organisation.
Organisations that let these workers go before that knowledge is
captured or put into institutional memory, are at risk of losing
vital information and a competitive advantage. Delta Airlines felt
this first–hand when in April 1994 they retrenched 22 % of their
staff. The short term results for the company were positive, but the
long-term consequences were less positive. Closer to home the same
lesson was not learnt when many of the experienced civil servants
and municipal workers where forced out or given severance packages.
This could be one of the reasons why service delivery is not taking
place as the government has intended.
workers show increased productivity. According to recent studies
people live on average four years longer when they are productively
engaged. Harris Interactive reported that older workers are on
average 49% more motivated than younger workers. Some of the reasons
why high productivity can be expected from older workers are:
increased motivation, to be challenged, to remain, connected to
other workers, to enhance income and standard of living, and to
harness a sense of overall well-being. Many South African
organisational leaders would say this is all very interesting but
not really relevant given our high unemployment rate. Unemployment
will not be solved by replacing experienced, older workers with new
untrained and inexperienced workers, in fact it could cost your
organisation more in the long run if older workers are not valued
for their contribution to the organisations where they are employed.
The knowledge and experience of older workers can be better used to
grow their organisations and so create new job opportunities.
The value of older citizens to society
Africa has a larger percentage of young people compared to persons
aged 50-plus. It is perhaps of this fact that South African are less
aware of demographic changes taking place in other parts of the
world, changes which could impact on the South African society in
two to three decades into the future. Some societies tend to regard
their aging population, as people live longer, as a major burden on
a society. Fortunately there is a move away from this negative
perception of the 50-plus age group in societies. In an article in
the July/August 2006 edition of the senior citizen publication,
Plusmagazine published in the Netherlands, this change in perception
is of an aging population is demonstrated by the change description
from referring to this group as “the silver generation” as opposed
to the more negative description of “the grey wave” in the
economic value of the 50-plussers’ consumer power should also not be
discounted. More mature citizens often have more time and more
disposable income now that their children have left home. In the
Netherlands it is estimated that senior citizens number will
increase to 40% up to 2020 and over the same period this groups
income will increase 25% faster than the average household’s income.
Many companies in the Netherlands such bicycle manufacturers,
holiday travel and leisure time firms can not survive without the
senior citizens’ buying power.
article referred to above, the role of the 50-plus generation in the
total labour market is highlighted. Some sector of the economy such
education at all levels, the health sector and the people transport
sectors in the Netherlands would simple not be able to function
without the 50-plus category of employees.
voluntary organisations such as Doctors without Borders and Amnesty
International would come to a standstill without the voluntary
workers, who are often older persons.
A number of
industries and advertising companies have woken up to the economic
value that the 50-plussers represent as a marketing segment. This
has give rise to new concepts such as Mature Marketing, Best Age
Marketing and Babyboomer Marketing.
organisation or a society which does not take note of the value
which older persons represents to an organisation or a society,
misses an opportunity to benefit from the contributions which older
employees and older citizens can make as was briefly alluded to.
permission of the author:
Dr Ruan van
of Human Resources Management