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Ageing:a threat or opportunity - Essay Example

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In a world obsessed with issues that call for widespread,urgent,and global action,one of the latest points of concern is the threat that an ageing population poses to humanity. Perhaps,this is the primitive human instinct of "fight or flight" in action where fame and fortune await the prophet of doom …
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Ageing:a threat or opportunity
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Ageing: A Threat or Opportunity In a world obsessed with issues that call for widespread, urgent, and global action, one of the latest points of concern is the threat that an ageing population poses to humanity. Perhaps, this is the primitive human instinct of "fight or flight" in action where fame and fortune await the prophet of doom (or the tribal scout) who sensationally exposes dangers and traps that lie ahead. Fortunately, however, whilst the scout sees a giant mammoth or sabre-toothed tiger waiting for the tribe to march through, there are opportunist entrepreneurs amongst the throng who see instead a nutritious source of nourishing food, a warm cape, and ivory to decorate and beautify the home. Included in this group that sees opportunities in the midst of threats is Baumgarten, whose following commentary is the object of this paper's critical analysis: "In nearly all societies, western and eastern, developing and developed, populations are ageing, and this is seen to pose many challenges to managers, many of whom see the challenges as being negative in nature, in effect, as presenting problems, or threats. The truth is that an ageing population brings great opportunities for business organisations. Managers should now re-focus their energies on those opportunities and pursue them with all full endeavours." Baumgarten pushes business organisations to face the future with optimism, seeing the light at the end of the tunnel, the contents of the half-full glass, and the benefits and good things that can be enjoyed instead of being fixated on the hidden dangers. Knowing there are dangers ahead is important, but having the positive attitude to overcome dangers and find opportunities is a crucial ingredient for survival. The sooner organisations adopt this stance, the further ahead they will be when the threat, if at all, materialises. If, as some examples show, organisations proactively face the ageing population threat, they would not only be far ahead of others but, maybe, even contribute to dampening the threat's impact on the rest of humanity by converting it into an opportunity that would provide us greater riches and fulfilment. The image of one in four Europeans being over the age of 65 by 2030 is not exactly an uncomfortable one depending on where the aged European is. Some have seen the 65-year old as a human specimen withering on a hospital bed and sounded the gloomy alarm, as Kinsella and Phillips (2005) and Lutz (2006) have done. Many others such as Cappelli (2001/2003) and Baumgarten see the 65-year old running a company, enjoying a date at a swanky restaurant, or swimming and golfing in the Caribbean. It is an accepted fact that Europe, which has 19 of the world's 20 oldest countries in terms of population age, will see its populations continue to age to unprecedented levels over the next quarter of a century. Lutz provided indicators ranging from life expectancy at birth to average retirement ages to net migration totals for each of the countries in the European Union to point out that all these would mean increased strains on Europe's health care and pension systems as well as the continent's economies, many of which are already experiencing unemployment rates averaging around 10 percent and old-age dependency ratios that are the highest in the world. Other doomsday facts abound: one-fifth of Europe's population will be over 80 by 2050, more than 20% of the youth will be unemployed, and by 2010 (that's in three years!) deaths will be higher than births in Europe, resulting in population loss over the next 25 years. These may seem like outright sources of pessimism, but in fact, they can be motives of rejoicing for business organisations and the people who manage them with imagination, creativity, and entrepreneurial fire. Applying the norms of strategic analysis, and studying the experiences of firms that have foreseen the ageing phenomenon's impact and started doing something about it, it is easy to see how we not only in the U.K. but in other parts of the world can all benefit. Business organisations face strengths and weaknesses inside and threats and opportunities outside from the population ageing phenomenon. Knowing what these are becomes the starting point of our commentary. We summarise these as follows (though there is not enough space to come up with a comprehensive list). Strengths: employees with higher levels of maturity, experience and insights, higher retirement ages, more loyal workers, technological advances, and more challenging working conditions. Weaknesses: employees who may not be as productive and willing to be corporate slaves, "old-fashioned" thinking, numbers of young and inexperienced employees who were trained or educated differently, greater need for re-training, higher salaries if workers decide to retire later, higher pension contributions, (for some companies) no demographic worker profiles, more complex working arrangements (clash of cultures: youth versus age, locals versus immigrants, etc.), and having managers who are older than their workers (which would make managerial work more challenging). Opportunities: consumers with purchasing power and special needs and wants, new products and services that could be developed and sold, and the ability to increase workforce diversity (hence, the possibility of generating new ideas). Threats: labour shortages, higher costs for pension, health care costs, and training (lifelong, retraining, and learning to cope with new technologies), higher rates of immigration (and the corresponding problems), pressures to out- or off-source labour, higher taxes (to support an ageing population) that would affect profitability (and margins). The obvious disparity in the number of weaknesses (over strengths) and threats (over opportunities) should not discourage managers who desire to think strategically because this would trigger the creativity of their imagination to devise lasting and profitable solutions. Given the facts that have been laid out, there are two sets of actions that business organisations can do, either as employers towards their workers or as firms that sell a product or service. First, organisations as employers should learn to manage their ageing workforce. They can learn from two organisations that have done so to their advantage. In October 2006, a new Age Discrimination Law took effect in the U.K., the culmination of what began in March 2005 when the Department for Work and Pensions of the U.K. presented a comprehensive set of documents (DfWP, 2005; Phillipson and Smith, 2005) on what could be termed as Ageism that considers all the factors and their consequences that proceed from an ageing population, complete with strategies on how to address and solve problems and threats, and how to take advantage of organisational strengths and opportunities. For one, the new law made it unlawful to make employment decisions based on a person's age. Around the same time, the Eurofound (2005) published findings on best practices amongst the different E.U. Member States on the issue, thus providing several models that serve as examples on how business organisations could transform threats into opportunities and leverage their strengths to overcome or manage their weaknesses. There are several examples of how U.K.-based companies - ranging from pub company J.D. Wetherspoon to giant British Telecom (BT) - have met this challenge. The positive experiences of these disparate groups of organisations show several common strategies that contributed to the transformation and improvement of the business and the workplace, and which could be recommended in devising action plans. J.D. Wetherspoon is a pub company with more than 650 outlets throughout the UK. It revised its job specifications to bring them in line with good practices on age diversity, and is now re-writing its interviewing skills courses to address the issues of age diversity and age discrimination. Wetherspoon offered flexible working hours, and continue to attract diverse ages in order for people to fit in with different hours and strike a balance between work and family or other considerations (APG, 2006). Wetherspoon Chief Executive John Hutson testified that part of their success results from being innovative and progressive, and this is shown in the company's employment policies. Employing a diverse workforce of people of all ages benefited individual pubs and the company as a whole. The firm actively encourages its pub managers to recruit staff primarily for skills and ability. That age is therefore not an issue is part of the company's commitment to tackling ageing issues within the workplace. Internally, the ageing of its employees (mostly pub managers and workers) is a blessing for the company, because whilst most of its workers are young, healthy, and sociable, the pub market also caters to an older segment of the population. Not only would the company's flexibility in working arrangements allow the shuffling of workers to different slots that met the needs of a growing and diversified market; such flexibility also meant their workers are more fulfilled and satisfied and better able to do their work well, leading to more satisfied customers and (need it be said) potentially higher profits as customers keep on coming back. BT started addressing the issue in 2001 when it designated a senior manager to deal with equality and diversity issues, including ageism. This manager ensured that initiatives concerning age diversity issues are put into practice. Its first act was to design a flexible retirement policy to give employees greater choice regarding the nature and timing of their retirement, encouraged employees to prepare for their futures, and to consider broader aspirations for life, including career choices. The trade unions participated in the policy development, and implementation was carried out locally through the HR business managers. Despite difficulties at the initial stages of the programme, BT noted after five years that the number of employees aged over 50 years increased from 13% in 2001 to over 25%. In addition, the company developed three practices that could be utilised by other companies that need to address the ageing population issue: age profiling; the age audit; and the general employee survey. Age Profiling maps out the organisation's demographics and makes positive use of the data collected in recruitment procedures and training programmes. It also monitors the relationship between the customer and the company. Age Audits identified further issues the company should address, such as updating policies and practices in which there might be indirect or inadvertent discriminatory elements. It conducted a full age audit to eliminate any possibility for age discrimination from all company policies and practices. Staff Surveys are carried out by the company to get employee views on retirement policies in place, the new anti-discrimination legislation, changing demographics, and the changing needs of people and the business. Aside from these measures, regularly conducting formal surveys amongst employees allowed the organisation to track down employee commitment and motivation levels with regard to their jobs, colleagues, and customers. It developed an 'Employee Engagement Index' that included how its workers and the company are dealing with issues such as team working, senior management and communication, rewards, and work-life balance. Data collected from other organisations show that, over the years, attitudes about the value of older workers are shifting, with more positive perceptions than a decade ago. Older workers are neither perceived to be more costly to employ nor unworthy of training as an investment and deserve employment protection as everyone else. Since older workers are healthier, their productivity has been seen to even increase with age as they exhibit lower rates of absenteeism, sickness, and other old age biases of the past like senility or slowness. The second advice is for organisations to exploit the growing ageing population by meeting their needs and wants with products designed for them. An aging workforce and flexible working arrangements provide new business opportunities for both existing and would-be businesses. Not only would greater numbers of people want to combine new forms of work and leisure, but a growing number of these workers would be looking for new ways to spend their pensions and, at the same time, their wages. The more money these workers have, the more they would spend on items that could prolong life and postpone the inevitable (Morebusiness.com, 2006). Thus, there would be opportunities for businesses in health, improving the quality of life and leisure, lifelong learning and re-training, development of more meaningful experiences and relationships, and nostalgia. Products and facilities that are age-friendly would also be in demand, giving sufficient challenges even to technical workers of all ages such as architects, software and product engineers, and industrial designers. After all, it takes one to know one, such as designing the appropriate products and services that would sell. Unlike the past generation that retired - men and women who knew the hardships of war, faced countless family tragedies, and learned the virtues of a tough and hard life - the current and future generations of retirees are part of a generation born after the war and who grew up with the Beatles, drugs, rock and roll, and the enjoyment of pleasure at a level never known since the waning years of the Roman Empire. These comfort-seeking, pleasure-loving, and life-enjoying generations possess nearly-unlimited material resources who want to spend the last years of their lives in comfort and style. An ageing workforce is certainly a blessing for organisations that learn to take advantage of this opportunity to design new products and services for an ageing population, filling the next quarter of a century with the promise of becoming an exciting one! Bibliography Age Partnership Group (APG) (2006). "Be ready: Practical information for employers". APG Newsletter. London: APG. Cappelli, F. (2003) Will there really be a labor shortage Organizational Dynamics, 3, p. 87-99. Cappelli, P. (2001) Why is it so hard to find IT workers Organizational Dynamics, 3, p. 87-99. Department for Education and Skills (2003, July) 21st century skills: Realising our potential. London: The Stationery Office. Department for Work and Pensions (2005, March) Opportunity Age: Meeting the challenges of ageing in the 21st century; Presented to Parliament by the Secretary of State for Work and Pensions by Command of Her Majesty. London: The Stationery Office. Dixon, S. (2003) Implications of population ageing for the labour market. Labour Market Trends, February, p. 67-76. European Foundation for the Improvement of Living and Working Conditions (Eurofound) (2005, August) Employment and labour market policies for an ageing workforce and initiatives at the workplace. Dublin: Eurofound. Herman, R. and Gioia, J. (2003) Impending crisis: Too many jobs, too few people. New York: Oakhill Press. Hirsch, D. (2003) Crossroads after 50: Improving choices in work and retirement. New York: Joseph Rowntree Foundation. Kinsella, K. and Phillips, D.R. (2005) Global Aging: The Challenge of Success," Population Bulletin 60, 1, p. 1-55. Kodz, J., Kersley, B. and Bates, P. (1999) "The fifties revival". IES Report 359. Brighton: University of Sussex. Little, J.S. and Triest, R.K. (2002) The impact of demographic change on U.S. labour markets. New England Economic Review, 1st Quarter, p. 47-68. Lutz, W. (2006) European Demographic Data Sheet 2006. Vienna and Washington, DC: Vienna Institute of Demography, International Institute for Applied Systems Analysis, and Population Reference Bureau. McNair, S. and Flynn, M. (2006) Managing an ageing workforce in business services: A report for employers. London: APG. Metcalf, H. and Meadows, P. (2006) Survey of employers' policies, practices, and preferences relating to age. Department for Work and Pensions Research Report No. 325 and DTI Employment Relations Research Series No. 49. London: NIESR/BMRB. Morebusiness.com (2006). "Business opportunities with an aging population". Khera Communications Morebusiness.com. Available from [Accessed 2 April 2007]. Moss, N. and Arrowsmith, J. (2003) A review of 'What works' for clients aged over 50. London: Department for Work and Pensions. Phillipson, C. and Smith, A. (2005) "Extending working life: A review of the research literature". Research Report No. 299 - Department for Work and Pensions. London: The Stationery Office. Scottish Executive (2007) All our futures: Planning for a Scotland with an ageing population. Summary and action plan. Edinburgh: The Stationery Office. Taylor, P. and Walker, A. (1998) Policies and practices towards older workers: a framework for comparative research. Human Resource Management Journal, 8(3), p. 61-76. Walker, A. (2002) "Active strategies for older workers in the UK". In Active Strategies for Older Workers. ETUI: Brussels, p. 403-435. Read More
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