A comprehensive approach to the challenge is needed.
The efforts made by companies have made life better for older workers and their employers alike. Many companies report that turnover and absences are lower, employee satisfaction is higher and employees are more productive. Yet, as wonderful as those benefits are, the simple fact is that these older employees still will have to be replaced; no amount of perks and training will keep them on the job forever.
Furthermore, the programs used to entice older workers to stay on the job longer are what could be called "easy hits." More substantive changes—those that are more difficult to implement but could have a longer-term impact—are not nearly as prevalent.
What is really needed is avoiding short-term fixes in favor of a more holistic, comprehensive approach to the challenge.
Accenture has developed such an approach that can help companies fully understand the impacts of workforce aging and other related trends on their operations and missions; identify how well prepared they are to address the issue; develop a detailed road map to eliminate key human capital shortcomings in their organizations; and build and implement the capabilities critical to achieving high performance.
This approach encompasses three broad steps:
1. Diagnose the Breadth of the Problem
To effectively address the workforce challenge, an organization must first understand the extent of the problem and how well the organization is positioned to alleviate it. Therefore, the first step in Accenture's approach is to conduct a short but valuable diagnostic.
The diagnostic, which can be conducted in as little as 10 weeks, enables the organization to evaluate the potential magnitude of aging workforce impacts by assessing the financial impact of lost productivity; lost customer knowledge and relationships; lost product, service and process knowledge; and increased risks of making suboptimal business decisions when experienced employees retire. These impacts of not solving an aging workforce problem can be weighed against the costs of replacing retiring workers, training new or incumbent workers in critical skill areas, and other interventions to fix the problem. The results can highlight the potential cumulative cost of the mismanagement of, or failure to anticipate, aging workforce trends on overall operating costs.
The diagnostic also helps benchmark the effectiveness of the human capital processes needed to address aging workforce issues and improve the overall workforce experience. And it validates existing human capital investments to redirect investments for greater impact.
A tool such as the Accenture Human Capital Development Framework plays a critical role in this effort. This framework, which emerged from Accenture's ongoing research into high-performance businesses, is a diagnostic approach to assessing human capital capabilities and the processes that drive them, and then linking human capital assets and approaches to business performance outcomes. The framework draws on best practices and Accenture experience in human resource development, learning and knowledge management alongside state-of-the-art measurement techniques. The framework is unique in that it helps organizations do more than look at levels of spending to get a sense of their human capital development strengths; it also highlights the underlying practices' completeness and alignment with the organization's competitive strategy and mission. With the framework—which uses qualitative information from executive and employee surveys and interviews, as well as quantitative human resource and financial data—an organization can better assess its core human capital capabilities (such as leadership and employee engagement), identify specific human capital needs and then prescribe the right interventions to improve overall business performance.
2. Develop a Human Capital Management Strategy for Addressing the Problem
After completing the diagnostic, an organization then must develop an overall strategy for, in the short term, retaining employees eligible for retirement who possess critical skills and, for the longer term, capturing the knowledge of these people and transferring it to remaining employees. The organization also must define how it will replace, develop and manage these skills once these employees retire. This includes identifying the changes required in the organization's recruiting, hiring and knowledge management practices, as well as how new workforce models, processes and technologies will be adopted to support these changes. The two principal actions in this phase include:
- Defining the organization's future human capital requirements.
- Conducting a gap assessment to identify where human capital change efforts should be focused and in what order.
A comprehensive human capital management strategy is absolutely essential to proactively identify and address the major workforce challenges an organization will face in the coming years.
3. Implement a Broad-based Solution
With the human capital strategy defined, the organization then reaches the third step in the approach. Here, the organization must begin enacting the changes necessary to close the gaps identified in the previous stage. Accenture recognizes that every organization is different and each company's specific challenges will vary in magnitude and imminence. Yet we also know that most organizations will find their efforts centering on addressing three overarching needs: capturing and transferring knowledge to minimize knowledge loss; attracting, developing and retaining critical capabilities (including older workers); and doing more with less (people and money). Meeting those needs will require a variety of innovative approaches and solutions, some of which are outlined in the full report, a PDF copy of which can be downloaded from the Summary page.
While a company may not necessarily implement the entire aging workforce–human performance transformation approach at once, it is important for executives to understand the issue thoroughly and create a comprehensive transformation agenda.