Leading Change in a Complex World

One of the challenges of the external environment businesses face is the aging of their workers. Recall that we discussed this in the context of motivating factors. There is a demographic shift in the workplace as baby boomers retire. With that comes a loss of knowledge and skills, which managers and companies have to address, and which training may help address. As part of the HR process, managers must remember that older, professionally competent workers can mentor newer employees as part of training and talent management. This article explores the challenges of population aging and the opportunities it provides.

Supporting Longer Working Careers in Organisations: Challenges and Complexities

Takeaways for Leading Change

This chapter focuses on human resource management (HRM) challenges and complexities related to the retention of an ageing workforce, thereby supporting longer working careers in organisations.

Population ageing is a global phenomenon and a current megatrend with political, governmental, and economic consequences worldwide. Although population aging brings challenges, it can also provide new opportunities. Relational leadership stresses the importance of collective leadership and bottom-up processes along with top-down ones. This chapter highlights empirically organisational practices which support longer working careers. However, this requires trust and open dialog between employees and supervisors as well as enabling organisational structures. The main argument put forward is that organisations which are able to utilise the potential of longer working careers and a more age-diverse workforce, are likely to flourish in the long run.

The purpose of this chapter is to focus on human resource management (HRM) challenges and complexities related to the retention of an ageing workforce, thereby supporting longer working careers in organisations. The ageing of the population is a megatrend currently affecting societies and organisations worldwide. Increased longevity and decreased fertility are the primary reasons for the ageing of the population. A number of European countries and Japan have experienced birth rates below the replacement rate since the 1960s. The United States has experienced such a rate since the 1980s. Although developed countries have been the forerunners in terms of population ageing, other countries will follow the same path. According to a United Nations (UN) report, the number of individuals over age 60 has doubled since 1980 and is currently nearly one billion worldwide. This number that is expected to double by 2050.

Population ageing is an example of a wicked problem that brings changes for societies, organisations and individuals. Vivid terms, including "grey dawn and tsunami" have been used to describe the consequences of population ageing. At the societal level, population ageing affects a variety of sectors, including labour markets, services, housing, transportation, and inter-generational ties. It also changes the dependency ratio and is expected to influence national competitiveness. Changing demographics and their influences are particularly notable in the healthcare field due to the increasing use of healthcare services by a society's oldest citizens. There is continuing pressure in this field to slow the increase of healthcare costs without jeopardising the quality of healthcare services. At the moment of writing, the Finnish public healthcare and social sectors are currently undergoing an enormous reform, known as SOTE, aimed at restraining costs and securing equal healthcare services for all citizens.

Due to population ageing, several society-level actions have been taken, including legislation concerning age discrimination. In recent years, various retirement reforms have been enacted in many countries with the aim of postponing the retirement age to decrease pension costs and dependency ratios. In 2017, Finland enacted a new retirement reform aimed at lengthening working careers. Such increases in the official retirement age have increased the rate of participation of older individuals in the labour market in recent years. In Finland, for example, older employees are currently considering working after retirement more often than they did before. However, there are significant differences between nations in terms of the working activity of older individuals. For instance, in Sweden, 70% of those over age 55 are working, but in Italy, only 38% of those in that age group are actively participating in working life.

Along with society-level initiatives and reforms, the need for organisational-level actions, including HRM practices and policies, that support longer working careers has been stressed. From the organisational perspective, the increasing average age of the workforce means that organisations must efficiently use the knowledge and skills of their older employees and find ways to engage and retain their employees of all ages. Yet, organisations vary greatly in how they have responded to the challenges related to the ageing workforce and the degree to which they have promoted longer working careers.

In recent years, the retention of older employees has been studied in different fields, including gerontology, psychology, sociology, political science, and management. A variety of theoretical conceptualisations of late career and retirement have been presented. This chapter pays particular attention to HRM practices as potential factors influencing the retention of older employees in organisations. In line with relational leadership, which emphasises the collective leadership and bottom-up processes, this chapter also focuses on the active role of older employees in terms of managing their late career and how they perceive HRM practices provided by the organisation.

The empirical analysis is based on qualitative research examining the late-career intentions and expectations of older nursing professionals. Interview data were collected among 22 older (50+) nursing professionals in one Finnish university hospital in December 2016. The public-healthcare field provides an interesting context in which to examine the challenges related to the retention of older employees, because the field currently faces pressures to respond to the increasing need for healthcare services in a cost-efficient way while enduring a shortage of nursing professionals.

The chapter is structured as follows: The theoretical section focuses on how retention of older employees has been approached in recent HRM studies. The empirical section sheds light on the challenges and complexities of retaining longer working careers in healthcare context. It focuses on the perceptions of older (50+) nursing professionals towards their work and HRM practices. Finally, the chapter provides concluding remarks and implications for the LFC approach.

Source: Tampere University, https://library.oapen.org/handle/20.500.12657/25927
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