How to effectively manage the changing workforce demographic

21 May 2019

Today’s workforce is changing dramatically, with baby boomers making way for millennials. The retreat of baby boomers means knowledge, skill sets and values are heading for the exits, while millennials meanwhile are more tech-savvy and place corporate social responsibility in high regard. Rich Eagles and Ward Metzler, both a Principal at operations consultancy DuPont Sustainable Solutions, share their views on how organisations can successfully bridge the generational gap on the work-floor.

While this demographic shift is more urgent for certain sectors such as oil and gas, mining, and electric utilities that are facing a “great shift change” in which a significant portion of their employees are eligible to retire in the coming years, it is something that will impact every sector of the economy in many ways. 

Because companies will be required to fill more and more senior-level positions, junior workers will need to be promoted to these vacancies more rapidly, often without the benefit of adequate experience or development of necessary capabilities. Unlike their older colleagues who may have been with one company for decades, many of these junior staffers will have held numerous jobs with differing responsibilities, sometimes in different industries. 

Also, as older workers retire they will take with them significant accumulated knowledge of the company’s processes and exposure to risk that they have gained over their years on the job. These retiring workers may have an opportunity to impart some of this knowledge to a replacement before they leave. However, many companies don’t enjoy this luxury. Unless this valuable institutional knowledge is captured in some way before a retiring worker leaves, it is likely be lost by an organisation. 

Finally, most companies are under pressure to ‘do more with less’ in the coming years. Because of financial pressures and the challenge of identifying qualified candidates with the appropriate skill sets, organisations are more likely to forego filling available positions. This means current workers will need to shoulder additional responsibilities and be even more productive.How to effectively manage the changing workforce demographicOrganisations will need to properly manage these challenges if they expect to maintain a high level of operations and performance. There are four critical steps companies can take to effectively mitigate the rapidly changing workforce demographic:

1. Knowledge management

Develop systems to retain knowledge and experience that is leaving the organisation.

By developing and implementing a comprehensive knowledge management system, the vast wealth of knowledge held by retiring workers can be captured and shared effectively across the organisation. Individuals leaving the company should be encouraged to collect and share as much of their knowledge as possible. The days of putting it all in a memo are long gone. The knowledge management system should make this information available to relevant workers via multiple formats and in easily accessible ways. 

There will always be a need for curriculum-based learning systems, but companies should embrace new technologies, which appeal to younger generations in particular, to supplement brief online and instructor-led course offerings. Short videos and podcasts, for example, should be made available on mobile devices and made available on-demand, enabling workers to access the information 24 hours a day, seven days a week at a time when it is most convenient or most useful.

2. Operational excellence

Identify waste and drive efficiencies to make workers more productive without overburdening them.

For companies to operate at their peak, employees must be productive and consistently improve their performance. Yet ‘doing more with less’ can easily lead to a smaller workforce that feels overwhelmed. To help avert this, companies need to be aware of the relationship between staffing levels and operational risk, and take steps to ensure workers are getting more efficient every day in a way that doesn’t compromise reliability or safety. 

Many companies have implemented both Lean and Six-Sigma based processes, which serve as the backbone to driving necessary improvements that allow efficient operations. That said, organisations should adopt a continuous improvement mindset and drive these programmes consistently from the top of the company to effectively reduce waste and inefficiencies, decrease risk, and enable workers to be more productive without feeling overworked. 

Also, organisations should not be afraid to empower their workers to proactively improve processes and identify ways to reduce risk. This can be especially effective among front-line employees working in the field or on the shop floor who have first-hand knowledge of day-to-day operations and are therefore in an ideal position to optimise processes for safety and efficiency. Companies should also not disregard the input of more junior level employees. Millennials are the most educated generation in the workforce. Organisations should leverage their knowledge and encourage them to share their ideas on optimising operations.

“Overcoming today’s changing workforce demographics are challenging, but not insurmountable. It will require a dedicated and ongoing effort by companies.”

3. Strong HR processes

Establish effective personnel succession and progression plans to move the right people into the right roles at the right time.

Most companies today have fewer developmental positions available that they can move employees into to train them for higher level positions. Also, Millennials are the most mobile generation in the workforce, frequently moving from job to job. That means existing workers and new hires have fewer opportunities to gain knowledge and develop skills to prepare them for higher level positions within the organisation. 

Therefore, it is important that companies conduct succession planning that regularly identifies and cultivates top talent in a formalised manner. Organisations need a strong, multi-pronged learning and development programme in place that has as its foundation a competency model of the key personnel skill sets and operational needs necessary for the company to be most effective, and utilises self-service, online, classroom, and micro-learning, among other formal and informal techniques, to develop workers more rapidly.

Organisations should also utilise employee progression planning to enable more dynamic career path management. This is not succession planning, in which a company identifies and develops talent to replace a departing worker. Rather, this is enabling employees to pursue learning and development on their own initiative to advance. It involves identifying the competencies and skills that are required for workers to move into a higher-level position, and making the necessary training opportunities available for them to access either inside and outside the organisation. 

4. Robust culture

Maintain a company’s values as new employees come on board.

Every company has a unique culture that defines its collaborative nature, way of getting work done, and level of risk aversion. The influx of new employees can bring with it a new set of thoughts and ideas that can become disruptive if the underlying culture of the company is not well nurtured. Without a dedicated effort to perpetuate the culture of the organisation, unacceptable risk will be introduced into an organisation.

The values, vision and behaviours that define a company should be communicated and exhibited at every level, every day, from the C-suite to the shop floor. It requires more than simply putting a poster on a wall that tells people to operate safely or having the more experienced segment of the workforce say, “This is the way work gets done around here.” Maintaining a strong safety culture requires a concerted effort to reinforce appropriate behaviours and mindsets through strong communications, open dialogue, coaching, mentoring and performance management. 

When measuring the strength of a company’s culture, it is important to put as much emphasis on the future as the past. In addition to identifying key performance indicators or metrics to measure how well the workforce is engaged about the organisation’s cultural expectations, companies should also seek to learn any concerns or feelings employees have about upcoming developments within the organisation (a merger, a quarterly financial report, etc.). This will enable the organisation to anticipate and mitigate any negative impacts on the company culture.

A challenge

The difficulties presented by today’s changing workforce demographics are challenging, but not insurmountable. Overcoming them will require a dedicated and ongoing effort by companies to retain as much institutional knowledge as possible; improve operational excellence by increasing efficiencies and reducing risk; develop succession and progression plans with learning and development opportunities that appeal to all generations; and maintain the values of the organisation. Doing so will help ensure companies can maintain, and even improve, their performance without sacrificing safety or reliability.