Aging Population Workforce Concerns: Addressing Aging Workforce from Accenture

Governments worldwide are facing the challenges of an aging workforce. However, few are making concentrated and long-term efforts to change how they attract, develop and retain talent or to do more with less as workforce constraints tighten over the next 30 years. As a result, they are only briefly postponing the potentially severe effects of an aging workforce population, depleted of both manpower and knowledge—and are jeopardizing their ability to achieve high performance. This groundbreaking report outlines a three-step process to transform human performance based on Accenture's extensive research and work in the field.

The global workforce is aging. This trend is particularly noticeable in the public sector, where the average age of employees typically exceeds that of their private sector counterparts. As the first wave of baby boomers reaches retirement age, some agencies and governments are already at crisis stage, with more than 50 percent of their employees eligible for retirement within the next few years. Increasing life expectancy and decreasing birthrates mean that this is a long-term problem that will affect both pension programs and service delivery.

In the United States, severe federal budget strain as a result of pension beneficiaries outnumbering current workers could trickle down to local governments in the form of reduced subsidies. Throughout the world, institutional knowledge that departs with retirees will be difficult to replace as both public and private sectors fight for the smaller pool of talent.

Governments face the prospect of having to do the same amount of work (and possibly more) with significantly fewer employees. The result may be decreased services or deteriorating service levels. The Accenture Public Sector Value Model, a tool developed as part of the Accenture High Performance Government initiative, suggests that such results could be part of an inevitable trade-off, but only if they are combined with increased cost-effectiveness. Unfortunately, fewer workers and more retirees can only lead to increased financial burden. If governments do not address these issues immediately—and lastingly—they will struggle in their mission to provide effective, efficient, valuable services to citizens.

Societal trends are exacerbating the problem. Many of today's workers choose to retire earlier. Civil service is commonly seen as an unattractive career choice. And young workers today tend to eschew the notion of a lifelong career with one organization.

Responses to date have focused on temporary fixes that are often unpopular, such as changes in calculating pensions or raising the retirement age. Other, more promising initiatives, such as improving perception of public service, better staff development and more competitive pay scales and advancement opportunities, are often delivered in isolation, limiting their impact.

Accenture has developed a holistic approach that allows governments to rapidly assess the impacts of workforce aging on their operations, identify how prepared they are to address these issues, develop detailed plans to eliminate key human capital shortcomings and build and implement the capabilities critical to continuing their missions. The approach is couched in a deep understanding of governments' need to strive toward high performance by delivering valued services while keeping operating costs as low as possible.

The approach contains these three broad steps:

Diagnosing the breadth of the problem. The Accenture Human Capital Development Framework, another Accenture High Performance Government tool, helps organizations look beyond spending levels to understand their human capital strengths. Using the framework and other diagnostic tools, an agency can better determine its core human capital capabilities, identify specific human capital needs and prescribe the right interventions to improve overall business performance. Knowing that time is of the essence, Accenture has developed a method for conducting the diagnostic phase in as little as 10 weeks.

Developing a human capital management strategy. This essential step encompasses strategies for retaining key employees in the short term; capturing and transferring their knowledge; and replacing, developing and managing these skills into the future. From business practices to workforce models to supportive technologies, this stage helps identify and prioritize those human capital change efforts that will address an organization's specific needs.

Implementing a broad-based solution. Applying proven strategies and technologies from the public and private sectors, this third phase puts into motion the most critical and lasting changes as identified in phase two. Knowledge capture and transfer, talent management and efficiencies that allow governments to do more with less all play a role in securing high performance in future operations. The report outlines examples of public and private sector organizations that have implemented successful change and can serve as a guide for other agencies.

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