This article is by Stephen Moore, Head of Asia Pacific & Japan at Ceridian
Australia’s population is ageing. The Australian Human Rights Commission estimates that by 2050, one quarter of Australians will be aged 65 years or older. According to the Ai Group, older Australians account for an increasing share of our nation’s workforce and 15 per cent of employees currently working in manufacturing are 55-64 years old and are approaching retirement age .
In 2018, almost two-thirds of Australian organisations indicate older worker departures have caused a loss of key skills and knowledge in their organisation (an increase of 17 per cent in four years) . Unfortunately, in the same period there has also been an eight per cent reduction in using mentoring programs to facilitate knowledge transfer between older and younger workers.
As the “Silver Tsunami” washes over the manufacturing industry, the question for its leaders is whether we’re prepared to fill the gap left behind? When workers retire en masse, it’s not just about getting replacements for empty roles. Without the right transition plan in place, organisations could see their top subject matter experts, years of “corporate memory” and experiential learning walk out the door, taking a wealth of institutional knowledge. When such a knowledge base isn’t captured and translated to the next generation, there’s an efficiency cost to be paid. And when effective leaders move on without someone equally great to fill the void, productivity and leadership engagement inevitably suffers.
The potential negative impact of mass retirement is compounded by a widening skills gap driven by rapid technological advancement in the sector – referred to as Industry 4.0. The pace of change is accelerating, and the COVID-19 pandemic has added an additional layer of uncertainty for manufacturers. Closing the skills gap, preparing for the Silver Tsunami, and keeping up with change all starts with investing in your people. Now is the perfect time because, despite all of its challenges, the pandemic has created opportunities to build a more agile, engaged, and future-ready workforce.
Manufacturers have an opportunity right now to address the branding problem they’ve faced in the past and position themselves as the ideal career path for both millennial and Gen Z workers, while also capturing and retaining the expertise and knowledge of departing baby boomers. To be successful, though, it can’t just be a one-off branding or recruitment exercise.
Sustainable initiatives need to start inside the organisation to create a workplace that can not only attract younger workers but keep them. Investing in the right technologies will play a key role in building a modern employee experience to support an agile, engaged and forward-thinking workforce. Digital should be considered a critical piece of any manufacturer’s organisational transformation plans.
Challenge #1: Unravelling Gen Z
Manufacturing has the opportunity to position itself as the ideal landing place for this growing employee cohort. While there are some great programs to attract Gen Z talent, the trickier part is retaining them. We know job churn is endemic, but retention is still a key means to sustaining productivity. Doing so means unravelling what this generation values and expects from work. They grew up in a digital world, so technology should be front and centre. Manufacturers should look to create an environment where Gen Z talent can consume everything digitally; from training, to mentoring, to scheduling on their phones and be able to customise their experience to their own specific situation.
Some great examples of technology that would appeal to Gen Z workers are self-service tools (i.e. shift swapping or requesting time off through a smartphone app) and learning and training platforms that personalise and embed this experience into their work, rather than being offered in a separate and disconnected way. Learning platforms can also be used to educate employees on non-task specific topics such as how to manage stress and improve their physical and mental health. Companies should also consider an automated and digital way to run pulse surveys to keep on top of the various drivers of engagement or disengagement among diverse Gen Z employees. This will have the added benefit of helping to engage the entire multi-generational workforce.
Challenge #2: Building millennial leaders
As the baby boomers continue to enter retirement and Generation X settles into middle age, millennials are the new force in Australia’s economy. In 2018, they represented almost half our workforce (44% of all workers) .
As baby boomers retire, understanding how to attract, retain and develop effective millennial leaders to replace them will be critical. Like Gen Z, millennials are deeply embedded in a digital, tech-consumerised culture, and they expect to have the same experience at work. However, as they age, what this looks like may evolve. While for Gen Z employees it might be about personalisation and a seamless UX, for millennials trying to make their mark in leadership roles it may be more about how technology can make them and their operational mandate more successful.
An example would be the automated provision of analysed data to help them make good business decisions and manage their teams better. Millennial leaders will be focused on results over effort, and data plays a key role in that.
In a world where former menial, repetitive work is being automated by technology, millennials’ focus on building skills and chasing meaningful work may benefit manufacturers by creating a more agile workforce – a value that millennial leaders will pass down to their reports.
Challenge #3: Digitising knowledge
One of the biggest challenges facing manufacturers with the impending Silver Tsunami is the loss of institutional knowledge stemming from years of experience on the job that will go out the door with baby boomers.
To guard against this loss of institutional knowledge, organisations should work to build a culture of continuous learning, and leverage technology to capture knowledge digitally. Today, much of the knowledge transfer activity that happens within an organisation is done informally. It can happen through mentoring, on-the-job experiential learning, or employee collaboration channels. The right technology can provide an online tool to facilitate social learning between peers (i.e. employee sharing forums) and capture tribal knowledge in an organised way so the entire organisation can access it.
A robust learning platform will help to make content accessible for employees who are the planned successors of departing staff, as well as to new hires. Capturing knowledge through technology also helps to ensure business continuity in times of crisis, such as with the current pandemic. It means if an employee needs to step into a new role quickly, they can access the information they need to get up to speed right away.
Stephen Moore is the Head of Asia Pacific & Japan at Ceridian and is responsible for overall leadership of the region. His focus is to deliver world-class innovations and experiences to customers, helping them optimise performance using Ceridian’s intelligent HCM and deep business insights.
[i] Ai Group (2019), Economics Factsheet; Australia’s older workforce in 2019. Available at: https://www.aigrouptalent.com.au/wp-content/uploads/Ai-Group-factsheet-older-workforce-2019.pdf[ii] AHRI & Australian Human Rights Commission (2018), Employing Older Workers research report. https://www.ahri.com.au/media/1198/ahri_ahrc_employingolderworkers_report.pdf[iii] AlphaBeta, commissioned by Afterpay Touch Group Limited (2020), How Millennials Manage Money; Facts on the spending habits of young Australians.