Many families have experienced the situation in which younger members of the household are the most proficient at setting the VCR or solving problems on the home computer. This phenomenon is now extending into the workforce on an enormous scale. By Mark James
Information technology and changing demographics in the workforce have the potential to totally reshape the structure of business organisations.
A 45-year-old CEO can now be managing a recently hired 20-year-old IT consultant and a 60-year-old business strategist who has been with the company 20 years.
Organisations with widely dispersed age groups tend to be those that have pursued a policy of nurturing the valued members of their workforce.
Management guru Peter Drucker views the ageing of the workforce as “the single most significant issue for human-resource managers over the next century”. Meanwhile, young IT professionals are dominating in the implementation of increasingly sophisticated information technology systems.
To manage these two phenomena successfully, organisations will have to learn to be more flexible when employing and deploying personnel. They must learn to combine the skills and enthusiasm of the young with the knowledge and experience of the old.
Population and workforce demographics
The workforce is not going to be transformed overnight, but the average birth rate for Australia is now 1.7 children per woman and falling. Within a generation, the number of recruits to the workforce will reach a plateau and may even decline, and an increasing proportion of the workforce will be over 45 years of age.
This is occurring concurrently with an increase in the rate of early retirement by highly skilled workers who have achieved financial independence.
The indications at this moment are that the shortfall is not likely to be made up by a “populate or perish” style immigration program in the foreseeable future.
I.T. and the changing nature of business
In First World economies, most wealth is now generated through the provision of services and knowledge. These types of industries have become increasingly reliant on skilled IT staff.
Meanwhile, information technology itself continues to undergo a process of explosive growth and rapid change. One year is a very long time in the IT industry, and the life cycles of technological systems are decreasing rapidly. Once, systems might have been updated every two years, but now they may require upgrading every six months or even every three.
IT is also a big factor in globalisation. For example, the 25-year-old business Australian Correspondence Schools was servicing its students by “snail” mail. Then chief executive John Mason repositioned the company to provide its services by e-mail. In less than five years, overseas sales have gone from 1% to 30% of his business.
The effect on organisational structure
Change brought about by globalisation and workplace restructuring have caused many organisations to lose their old hierarchical structure. They no longer provide a clearly articulated career path for employees.
However, there is now an awareness that without some sort of structure you do not have an organisation. The new structural paradigm is the integration of the workforce into project teams. This prompts two questions: how will teams accommodate young IT professionals and the more experienced personnel, and what effect will these project teams have on the shape of the new organisation?
With the typical board member being 40 years of age or more, there is the very real issue of how to incorporate into the boardroom someone who has only recently left school. A 45-year-old CEO can now be managing a recently hired 20-year-old IT consultant and a 60-year-old business strategist who has been with the company for 20 years.
bSolutions is an IT company that operates its own profitable internet site and provides Web design and programming services for other organisations. Managing director Gerhard Moll says: “The onus is on the more established members of the workforce to adapt to the changes wrought by the implementation of IT.”
Convincing them can be as simple as explaining that the new technology makes good financial sense.
Moll says: “Younger employees can want to see technology introduced for its own sake, so managers have to direct them in how to use the technology. The implementation of technology must provide a cost benefit and contribute to business strategy. The challenge for managers is to stay in control of the process without losing focus on the direction of the company.”
IT professionals do not necessarily make the best managers. Many young people lack personal development and even basic meeting and organisational skills. Moll believes that the best person for managing the implementation of IT systems is someone inside the organisation who is distant from the IT program and the entrenched culture.
I.T. and the cult of youth
There is a strong belief that IT is exclusively a young person’s field. This perception is reinforced when organisations advertise for personnel that are suited to a “funky young environment”.
At bSolutions, all the staff are under the age of 30 and any new employees are recruited soon after they graduate from school or university. Moll seeks to shape people’s ideas. “The older they are, the harder that is,” he says.
The situation is similar at Australian Correspondence Schools. Mason says: “The world is evolving so fast that traditional systems are becoming less and less valid.” He re-educates his IT staff to unlearn university training and become relevant to the modern workplace.
However, research into the skills and capacities of older and younger workers has found that there is little difference between the two. Louise Rolland, the project co-ordinator with Jobs East, a Commonwealth Government consultative committee, says: “Research has shown that the stereotype of young people being more technically proficient than older people is simply not true.” Rolland says that there is much more variation within age groups than there is between age groups.
Veronica Sheen, deputy executive director of the Council on Ageing (Aust) describes this as “the cult of youth”. She wonders why businesses pursue a young image and implement a youthful employment structure. “Young people work faster, but they make more mistakes. Older people take longer to train, but they do things more thoroughly and produce a higher standard of work.”
Age also confers the knowledge of organisational structure, the psychological insight and the wisdom that are required for management.
Keeping older people relevant
With people living longer, the number of young workers entering the workforce contracting, and gradual increases to the age at which workers can access their superannuation, many older people will have to continue working. This will prompt employers and the community at large to reconsider the retirement age.
In the future, employers will need to ensure that the experience and skills of senior professional people remain relevant in a constantly changing economy.
Research has shown that older employees can be easily discouraged from using new technology by peer and supervisor attitudes. Changes in workplace culture are needed if we are to avoid having large numbers of highly trained senior personnel ending up on the proverbial scrap heap.
Retraining older workers
To strike a balance between the competing demands of an ageing workforce and rapidly changing technology, individuals, organisations and governments need to be willing to invest in lifelong learning for all employees. Unfortunately, there are few programs for encouraging professional development among highly skilled workers in their 40s and 50s.
The Association of Professional Engineers, Scientists and Managers Australia (Apesma) noticed that a growing number of members were becoming under-employed or ending up unemployed due to their lack of IT skills. Apesma placed a “modest” advertisement in the newspapers to promote a seminar exploring the issue of IT training.
After a huge response, Apesma managed to obtain funding from the Victorian Government and Jobs East to run an intensive six-month IT re-skilling program for professionals.
It is a difficult, technically oriented course covering topics such as network certification, computer hardware and sophisticated software operating systems. Participants range in age from 23 to 59 and include well-qualified professional engineers and scientists some of them with doctorates.
The results will be some time in coming. But, as project manager Howard Wilson points out: “IT skills need to be informed by a bigger picture than that provided by a university IT course. Project-management skills mainly come from experience.”
What are organisations doing to deal with the issue?
Organisations with widely dispersed age groups in their workforce tend to be those that have pursued a policy of nurturing the valued members of their workforce. Many of them are in the public sector, and include Telstra, CSIRO, the universities and the Bureau of Meteorology.
The Australian Employers Convention (AEC), formed in 1999 to study the effects of an ageing population on Australian industry, has found that the age-mixed human resources models of Coles Myer Logistics (CML) and DMS Glass are world-best practice.
CML employs staff that have been with the company since 1950, when computers were still the stuff of science fiction. Yet, they now operate a paperless dispatch system. CML has an open-minded recruitment policy and has hired personnel in their 60s and successfully trained them to use the IT systems.
By introducing new technology and encouraging its workforce to seek retraining, CML has created a flexible organisation that is willing to adapt to change. CML also believes that it saves on training costs due to its high staff retention rate.
DMS Glass, by combining older and younger workers in teams, has broken down age barriers. The process of learning is two-way, with younger staff members helping older employees to learn about new technology. Younger staff also see a future for themselves in the company, as they see that loyalty and experience are rewarded. Job rotation and training have combined to produce a multi-skilled workforce.
The research by AEC yielded recommendations that are applicable to any organisation managing the issues of an ageing workforce:
- Create a system of mentoring that enriches older and younger workers.
- Training should be started early to keep all workers up to date with new systems. This also equips personnel to become trainers themselves.
- Institute a system of “people maintenance” to optimise efficiency and reduce disruptions to organisational systems and processes.
Peter Armstrong, managing director of Armstrong-Gilbert Consultants, agrees that careful planning is the key to implementing generational change in a company.
He cites the example of Southcorp Packaging, a paper manufacturer, which saw that an older generation of managers was going to move on, identified a new management team from the existing workforce and groomed them over a period of years so that they were well prepared to take over when the time came.
What is required in managing the simultaneous demands of a youthful IT culture and an ageing workforce is the creation of multi-faceted workplace teams. Such teams should include members with IT skills, business experience, management skills and interpersonal skills.
Perhaps most tellingly, according to Moll, it was the influence of older, more experienced people that prevented him from falling victim to the false optimism that fuelled the dot-com industry before the crash of April last year.
Young people need the structures and experience that have been developed by previous generations. Similarly, senior business managers must re-invigorate their organisations by being prepared to embrace change and learn from the different standards and values of younger people.
IT will improve business performance only when it is combined with a supportive workplace culture. To maintain competitive advantage in a constantly changing world, management must capitalise on the knowledge and skills of all members of the workforce.