Jerusalem Wise Up!

Unlock Experience and Make Age an Advantage. Leverage your best agers and foster a more innovative, productive and inclusive environment in your organization with age diversity
1. Auflage 2025
ISBN: 978-3-648-19293-1
Verlag: Haufe
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 264 Seiten, E-Book

Reihe: Haufe Fachbuch

Part One presents the challenge of the 'Silver Tsunami,' providing evidence of the disruptive nature of this unprecedented demographic shift. It shows why ignoring the challenges of an aging workforce negatively affects innovation and competitiveness. You will learn why a well-implemented 'Wise Organization' strategy leverages the strengths of each generation, ensuring long-term success and driving innovation in today's rapidly evolving business landscape. Part Two shares insights for what you need to consider when taking action. These chapters go into debunking myths about older workers and what it looks like when age management goes wrong. This section also examines the critical role of the People and Culture function and reframes 'Inclusion' in the context of an aging workplace. The chapter closes with an outline for how to navigate the Wise Management agenda as a strategic priority.  Part Three provides a clear step by step guide on how to build a Wise Organization that unleashes the full potential of your mature workforce while optimizing inter-generational synergies. You will learn how building a Wise Organization gives your company a distinct competitive advantage, allowing you to achieve your corporate goals more effectively. Part Four focuses on the future: As demographic change becomes an unstoppable force, organizations will have to get ready for the longevity economy. Learn how visionary leaders will continue to transform their workplaces to thrive amid shifting age dynamics, ensuring their organizations remain resilient and relevant for generations of employees yet to come. 

Christian Jerusalem is the founder and CEO of WiseForce Advisors GmbH.

Autoren/Hrsg.

Jerusalem, Christian

Fachgebiete

• Wirtschaftswissenschaften Betriebswirtschaft Unternehmensorganisation, Corporate Responsibility Unternehmenskultur, Corporate Governance
• Wirtschaftswissenschaften Betriebswirtschaft Management Unternehmensführung
• Wirtschaftswissenschaften Betriebswirtschaft Bereichsspezifisches Management Management: Führung & Motivation
• Wirtschaftswissenschaften Betriebswirtschaft Bereichsspezifisches Management Personalwesen, Human Resource Management

Leseproben

Chapter 2 The Silver Dollar: Economic Realities of an Aging Workforce

The Drift Phenomenon

On a November day, Caroline sat at her desk, staring at the computer screen and reflecting on her time with the employer she’d served for more than two decades. “I was hired to be a marketing specialist, and at first, I was eager, full of ambition. Over the years, I became known as the go-to person for campaign strategy. My colleagues often joke that I can predict consumer trends in my sleep,” she says.

For a long time, Caroline felt a deep sense of pride in her work. She belonged to this place and always felt that her contributions were valued. But lately, something seemed off. The familiar routine that she once enjoyed was beginning to feel constrictive. At 53, she found herself asking, “Is this all there is for me professionally? I looked around at the younger faces, buzzing with excitement over the latest company strategy and wondered if I even belonged anymore.”

As time passed, Caroline grew more sensitive to the changes happening around her. A reorganization here, a new policy there—each one felt like a potential threat to her status, her autonomy, and her relationships at work. A nagging worry kept her up at night: “Do I still matter?”

She started looking for signs that the company still valued her expertise—an opportunity to lead a new project or shift her role to something new. She would even welcome an invitation to learn new skills in a professional training program. But those signs never came. Instead, Caroline felt taken for granted. Her boss acted as though the company had invested enough in her and now it was time for her to deliver. “It was a subtle shift from my performance being valued, to being simply expected,” she recalls.

Understandably, Caroline began to withdraw mentally. Her colleagues didn’t seem to notice at first, but she felt herself drifting away. “It’s not that I don’t care anymore—it’s just that I’m not sure if anyone else does. And in this state of limbo, I find myself wondering what the next chapter of my career will look like, and whether it will be written here or somewhere else entirely.”

Caroline’s story is an all too common one, and when professionals like her start to withdraw mentally and emotionally from their employers, we refer to the phenomenon as “drifting.” Drifting happens when “nine to five” replaces “going the extra mile.” Drifters still do their jobs, but in a reactive mode. They observe the changes around them, and instead of looking for new opportunities, they focus on protecting the status quo. It’s an effective coping mechanism to deal with setbacks and lack of inclusion and appreciation. Eroding productivity from drifting employees may be hard to detect, but it builds up over time and can become a systemic issue before you know it.

What is Drifting?

Drifting refers to the experience that older people inside an organization have when they no longer feel committed or attached. This happens when a company no longer gives attention to an individual because of a conscious or unconscious bias against investing in someone “older” and/or who may be expected to leave the company at an undefined time in the future, perhaps through early retirement.

Cost and Productivity Impact of Older Workers

We’ve all encountered proactive individuals in the workplace. They plan ahead and prioritize tasks effectively. They are always looking for ways to improve processes and prevent issues, and this approach creates an environment for innovation and creativity to thrive. Drifters tend to lose their formerly proactive inclinations and settle into a reactive, defensive mode. This change has a significant impact on productivity and costs organizations a lot of money.

Are older workers more costly than younger ones, simply because of their age? Not necessarily. The perception of older workers as a major cost impediment to business is greatly exaggerated and not supported by current evidence. When people costs go up, it’s often due to a preventable decline in productivity. If leaders don’t allow the drifting phenomenon to take hold, they can reap the cost-savings benefits of keeping experienced workers in the mix.

Let’s take a closer look:

Productivity Considerations

As workers age, their productivity may start to decline due to physical or cognitive changes or inability/ unwillingness to use the latest technologies. For example, a study on Japanese workers found that productivity peaked for those in their 40s and declined thereafter. This aging effect may have reduced Japan’s annual total factor productivity growth by 0.7–0.9 percentage point between 1990 and 2005.32

Moody’s Analytics published a study on Aging and Productivity33 in 2018 that found “no definitive conclusions as to the mechanisms causing aging to weigh on productivity, but a plausible theory is that older workers may resist productivity-improving technologies. Understanding why older workers are reducing productivity growth is essential if ways to mitigate the effects are to be found.”

An aging workforce also can lead to higher costs for employers due to increased healthcare expenses, higher wages, absenteeism, caregiving responsibilities, and age-related workplace accommodations such as modified schedules. At the same time, older workers tend to stay in their jobs longer than younger peers, they show higher levels of work commitment, and are more reliable. Contrary to popular opinion, they often demonstrate the ability to acquire new skills and contribute creative ideas.

The relationship between age and productivity is not straightforward. Encourage Equality, a promoter of age neutrality at work, cites a number of insights:34 According to a recent EU report, “There is no empirical evidence that older workers are more or less productive than other age groups.” While some studies suggest a potential decline in productivity with age, this is often offset by experience and job-specific knowledge.

Moreover, older workers often provide cost-saving benefits that offset any potential higher wages. Workers aged over 55 are five times less likely to change jobs compared to workers aged 20 to 24, reducing recruitment and training costs. Older workers have lower rates of absenteeism, providing a greater return on training investments. And they demonstrate higher levels of work commitment, reliability, and the ability to acquire new skills.

Compensation Trends

Modern compensation practices have reduced age-based wage differences, as evidenced by these statistics: 90 percent of large companies now use performance-based variable compensation rather than tenure-based compensation, up from 78 percent in 2005.

Flexible Work Arrangements

Companies can leverage older workers’ expertise cost-effectively through flexible work hours, contract positions, or part-time roles, allowing companies to access their expertise at lower costs. These arrangements can be mutually beneficial for both companies and older workers.

In conclusion, while there may be a small element of truth to older workers being more expensive in some cases, this is outweighed by the benefits these workers contribute and changing compensation structures. The traditional and simplified belief that older workers are more costly than younger ones is not correct. However, if the aging workforce is not managed well, insufficient leadership of mature workers will lead to the “drift” phenomenon. And having a lot of drifters in your organization is going to be a burden on your bottom line. By proactively managing an aging workforce, I believe companies can mitigate productivity losses and leverage the valuable experience of older workers.

Ageism

The economic impact of ageism on the overall economy and organization is staggering: According to an AARP (American Association of Retired People) study, age discrimination in American workplaces cost the US economy an estimated $850 billion in gross domestic product (GDP) in 2018.35 This figure is roughly equivalent to the size of Pennsylvania’s entire economy. By 2050, these losses could potentially climb to $3.9 trillion, comparable to the current GDP of Germany.36

Ageist practices, such as forced early retirement or limited opportunities for older workers, lead to inefficient use of human resources and skills, and can eventually lead to a decline in GDP. In Australia, for example, it’s estimated that, if 5 percent more people aged 55 or older were employed, it would have a positive impact of AUD$48 billion annually on the national economy.

Likewise, a Stepstone study37 showed that the German labor market could retain around 570,000 more workers annually from 2030 to 2035, if those reaching retirement age chose to continue working. This would correspond to a potential increase in German GDP of up to 0.7 percent per year on average, based on 2023 GDP figures. This projection is based on data showing that approximately 39 percent of workers aged 55 and older want to work beyond retirement age.

Ageism & Health

Experiencing ageism may also affect one’s overall health. The United States spends billions of dollars per year treating health conditions...

Über Autor(innen)

Jerusalem, Christian
Christian Jerusalem is the founder and CEO of WiseForce Advisors GmbH.

Christian Jerusalem

Christian Jerusalem is the founder and CEO of WiseForce Advisors GmbH.