The rise of the wiseANTHONY RAJA DEVADOSS

A NEW PERSPECTIVE FROM KELLYOCG ON MANAGING SENIOR WORKERS IN THE ASIA-PACIFIC REGION

CHINA

Population aged over 60 by 2025

Increase from 2009

WORLD POPULATION AGED 60+

250mPopulation aged over 60 by 2025

World’s fastest-ageing country

30%

35%

2013 working age population fell by

to 919.54m2.44m

JAPAN

MOST RAPIDLY AGEING COUNTRIES IN ASIA-PACIFIC

1950 2011 2050

8%11%

22%

1950

200 million

2050

2 billion

2011

760 million

1 Rajeshni Naidu-Ghelani, ‘Eight ways to invest in ageing Asia’, CNBC Asia, October 2012, www.cnbc.com/id/49472169.2 Ansuya Harjani, ‘This is how fast China’s workforce is shrinking’, CNBC Asia, January 2014, www.cnbc.com/id/101349829.3 Bloomberg, ‘Most Rapidly Aging: countries’, www.bloomberg.com/visual-data/best-and-worst//most-rapidly-aging-countries.

The rise and rise of the over-60 populationThe global population is projected to

increase 3.7 times from 1950 to 2050.

The number of people over the age of

60 will increase by a factor of nearly

10 and those over the age of 80 by a

factor of 26. The skills and knowledge

that older people have acquired

through their careers are going to waste

as they leave the workplace.

/03

In with the old

The global population is ageing fast. In fact, the number of older people on earth has tripled over the last 50 years.

This change is being driven by a convergence of trends – lower births rates and people

living longer lives – that is testing governments, businesses and people. It’s one of the

greatest challenges of our times, but one that’s happening in slow motion.

The ‘slow burning’ nature of the ageing crisis means that important decisions are

being delayed. Many companies and institutions have yet to make the practical

adjustments in their business strategies to meet the demands of an ageing workforce

– either through recruitment behaviours, improved working environments or flexible

working hours.

SEE FIGURE 1

IN WITH THE OLD /04

“The expected growth of the population of older persons should not be an excuse not to act but rather seen as a call to action. A well supported old age is in the interest of all generations.”1

4 UNFPA and HelpAge International, ‘Ageing in the Twenty-First Century – A Celebration and A Challenge’, 2012, unfpa.org/ageingreport/.

Total of world population aged 60 and over(DEVELOPING AND INDUSTRIAL COUNTRIES)

/05

FIGURE 1

Source: World Economic Forum, ‘Global Population Aging: Peril or Promise?’

PO

PU

LATI

ON

60

AN

D O

VE

R, P

ER

CE

NT

35

20

25

20

15

10

5

0

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Industrial countries

Developing countries

/06

The workforce challenge

The implications of this shift in the makeup of the global population are particularly severe for the Asia-Pacific region, which has some of the fastest-ageing populations in the world.

By 2040, Japan is projected to have the highest median age in the world, with half

of its population aged 54 and over.5 China and Japan face chronic shortfalls in their

working age numbers.6 In South Korea too, it is predicted that the number of working

age people will start to fall from 2015, while Malaysia’s elderly are expected to

comprise 15 percent of the population by 2030.7

The ratio of retirees to workers in Taiwan has shot up and the median age of people

in the country is expected to reach 56 in 2050, up from 37 in 2012. United Nations

research also projects the number of people aged over 60 in Indonesia will increase

from 12.8 percent in 2025 to 22.3 percent in 2050, compared with 7.6 percent in 2000.8

The proportion of the population aged 65 or over in Australia will rise to about 23

percent by 2050, compared to 14 percent today.9 Between 2001 and 2011, the

percentage of Australians over 55 in paid work grew by 10 per cent.

/07THE WORKFORCE CHALLENGE

Most young people expect to retire around the age of 57.

5 Diversity & Inclusion in Asia Network, ‘Ageing: Impact on Companies in Asia’, March 2010, www.communitybusiness.org/images/cb/publications/2010/Ageing.pdf.6 See infographic on page [x].7 Suhaimi Abd Samad, Halimah Awang, Norma Mansor, Population Ageing and Social Protection in Malaysia, 2013, ssrc.um.edu.my/images/ssrc/Books/Journal%20

papers/Population%20ageing%20and%20social%20protection%20in%20Malaysia_suhaimi_norma.pdf.8 United Nations, World Population Ageing 1950–2050, www.un.org/esa/population/publications/worldageing19502050/pdf/112indon.pdf.9 Australian Government, Intergenerational Report 2010 – Australia to 2050: future challenges, 2010, archive.treasury.gov.au/igr/igr2010/report/pdf/IGR_2010.pdf.

No country is exempt from ageing, although in the Asia-Pacific region there are

good examples of governments and businesses developing strategies to meet the

challenge. The more proactive organizations have recognized that the only way to

deal with changing demographics is to adapt. But this is the very minimum that needs

to be done.

Fewer female workers

Asia-Pacific nations face additional challenges, including low workforce participation

rates among women and that many of today’s younger workers don’t expect to delay

their retirements.

India’s female work participation rate is one of the worst in the world at 29 percent.

Malaysia fares better with 52.4 percent10, which reflects efforts by the government

to encourage companies to make it easier for women to work by allowing flexible

work arrangements.

A recent HSBC study gauged the views of more than 16,000 people in 15 countries

including Australia, China, Hong Kong, Singapore, India, Malaysia and Taiwan, and

found that most young people expected to retire around the age of 57.11

/08THE WORKFORCE CHALLENGE

India’s female work participation rate is one of the worst in the world at 29 percent.

10 Liau Y-Sing, ‘Mothers Wanted Back in Workforce as Malaysia Seeks Growth’, Bloomberg, 20 August 2014, www.bloomberg.com/news/2014-08-19/malaysia-seeks-to-draw-women-back-to-work-southeast-asia.html.

11 HSBC, ‘Future of Retirement: Life After Work’, 2013, www.professionalplanner.com.au/wp-content/uploads/2013/09/HSBC-Aust-Report.pdf.

Pressure on organizations

These demographic changes will place additional pressures on governments through

increased health and welfare costs.

In a recent address to the UN, the Malaysian government acknowledged the

importance of comprehensive policies, programmes and services in countering the

health and socio-economic effects of its ageing population.12

In Australia, health and welfare cost increases are projected to require an additional

6 percent of GDP over the next 50 years, mainly as a result of the country’s ageing

population and changes to its workforce.

In Japan, diminishing workforce participation will knock 1 percent off GDP growth

every year for the next four years.13 China could see a surplus of 55.2 million to

75.3 million workers by 2020, reduced to a shortage of 24.5 million people by 2030.14

/09THE WORKFORCE CHALLENGE

Governments around the world have started to raise the retirement age.

12 ‘National statement by Dato’ Sri Dr. Noorul Ainur Mohd Nur, Secretary-General of The Ministry of Women, Family and Community Dvelopment of Malaysia at the 47th session of the commission on population and development, 8 April 2014’, www.un.org/en/development/desa/population/pdf/commission/2014/country/Agenda%20item%204/Malaysia_Item4.pdf

13 ‘Age invaders’, The Economist, 26 April 2014, www.economist.com/news/briefing/21601248-generation-old-people-about-change-global-economy-they-will-not-all-do-so.

14 Rainer Strack et al, ‘Global Workforce Crisis 2014: $10 Trillion at Risk’, Boston Consulting Group, July 2014, www.bcgperspectives.com/content/articles/management_two_speed_economy_public_sector_global_workforce_crisis/?chapter=2.

As a response to this looming crisis, governments around the world have started to

raise the retirement age. Australia, for example, recently announced that by 2035

its retirement age would be increased to 70.15

Many industries will also be forced to adjust their labor supply strategies, either

by bringing more young people into their ranks or finding ways to retain or attract

older workers.

To maintain high productivity – and secure the workforces needed to sustain it –

businesses will need to make their workplaces ‘age friendly’. That will involve placing

health and wellbeing front and center, and focusing on motivating staff to want to work

beyond the traditional retirement age.

/10THE WORKFORCE CHALLENGE

To maintain high productivity, businesses will need to make their workplaces ‘age friendly’.

15 James Massola, ‘Retirement age to rise to 75 by 2035, Joe Hockey announces’, The Sydney Morning Herald, 2 May 2014, www.smh.com.au/federal-politics/political-news/retirement-age-rise-to-70-by-2035-joe-hockey-announces-20140502-zr318.html.

/11

Senior solutions

The ageing crisis is forcing organizations to address their talent supply chains to retain retiring workers and prevent a potentially huge loss of knowledge from the workplace. This has led to a whole range of government policies and innovative retention strategies.

Re-employing retirees

As a small island nation, the impact of an ageing workforce is acutely felt in Singapore

where those aged 65 and above now make up around 12 percent of the population,

up from 7 percent in 2002.16

The Singapore Government has favored re-employment as a way of keeping older

workers in the workplace,17 raising the age at which companies can re-employ an

employee from 65 to 67. Since it brought in re-employment legislation in 2012, a

staggering number of older employees have been retained – 99 percent of private

sector local employees who turned 62 in June 2013 were offered re-employment,

while 67 percent of retirees were offered re-employment on existing contracts, with

no change to their employment terms.

/12SENIOR SOLUTIONS

Businesses in Asia lead the world when it comes to factoring senior employees into their workforces.

16 essa Wong, ‘Fast-ageing Singapore, fewer support aged; Trend worries experts’, The Straits Times, 27 September 2013, www.straitstimes.com/breaking-news/singapore/story/fast-ageing-singapore-fewer-support-aged-trend-worries-experts-2013092.

17 Shalini Shukla, ‘Mature workers matter too’, HRM Asia, 21 May 2014, www.hrmasia.com/resources/mature-workers/mature-workers-matter-too/187721/.

Among those re-employed in the same job, 96 percent did not experience a basic

wage cut.

A similar plan has been adopted in Japan. In 2012, the Japanese Government shelved

its plan to extend the compulsory retirement age for national government employees

from 60 to 65. Instead, it increased the number of employees working until the age of

65 by rehiring workers who retired at 60 on lower wages.

These steps have had a significant impact, with the labor force participation rate

for men aged 60 to 64 increasing from 71 percent in 2006 to 77 percent in 2009.18

Meanwhile, the Japanese Government will begin to raise the eligibility age for mutual

pension payments to 65 in stages.

Promoting diversity

Businesses across the Asia-Pacific region have responded to the ageing of the

workforce by adjusting workplaces to better suit older people. In fact, businesses in the

region have moved faster than anywhere else in the world to factor senior employees

into their workforces as part of inclusion and diversity programs.

/13SENIOR SOLUTIONS

The Japanese Government will begin to raise the eligibility age for mutual pension payments to 65 in stages.

18 John R. Beard et al., World Economic Forum, ‘Global Population Ageing: Peril or Promise?’, 2012, www3.weforum.org/docs/WEF_GAC_GlobalPopulationAgeing_Report_2012.pdf.

According to a 2011 Forbes global survey of executives of 321 large corporations,

82 percent of companies in the Asia-Pacific region report ageing as a component of

their diversity programs, compared to 67 percent in the Americas, and 68 percent in

Europe, the Middle East and Africa (EMEA). All respondents worked for large global

enterprises with annual revenues of more than US$500 million.

SEE FIGURE 2

Creating a diverse workplace has noticeable benefits for businesses. Among

companies with more than US$10 billion in annual revenue surveyed by Forbes,

56 percent strongly agreed that diversity helped drive innovation. Respondents in

Asia were also more likely to see a link between diversity and innovation. In the

Asia-Pacific region, 56 percent strongly agreed with this notion, compared to

48 percent in the Americas and 41 percent in EMEA.19

However, promoting diversity and inclusion plans that will entice older workers to stay

or return to work can be a steep challenge in a competitive business environment.

This means that getting programs in place needs sign-off at the highest level.

/14SENIOR SOLUTIONS

82 percent of companies in the Asia-Pacific region report ageing as a component of their diversity programs.

19 Forbes Insights, ‘Global Diversity and Inclusion – Fostering Innovation Through a Diverse Workforce’, 2011, images.forbes.com/forbesinsights/StudyPDFs/Innovation_Through_Diversity.pdf.

Which of the following is currently part of your organisation’s diversity and inclusion efforts? (BY REGION)

/15

FIGURE 2

Source: Forbes Insights, ‘Global Diversity and Inclusion – Fostering Innovation Through a Diverse Workforce’, 2011.

Americas

EMEA

Asia Pacific

GENDER80

78

75

77

76

67

86

76

66

ETHNICITY/NATIONAL ORIGIN

RACE/COLOUR

AGE

DISABILITY

SEXUAL ORIENTATION

NATIONALITY

67

46

42

38

68

69

45

28

82

42

29

68

Creative deployment

HR managers are finding creative ways to deploy the vast knowledge and skills of

older workers, which requires a rethink of how they are deployed in the workplace.

This includes making the most of older workers’ experience to ensure that

organizations have the leadership skills required to succeed globally.

According to the consultancy CEB, just 25 percent of employees in Asia feel that

their leaders are fully prepared for future challenges.20 About the same proportion

(26 percent) of Asia’s rising leaders believe their successors are ready to move to

executive roles, compared to 43 percent in the rest of the world.

While not all seniors are natural leaders in their own right, most have decades of

experience and knowledge to pass on. With leadership skills in short supply, using that

knowledge effectively is critical to ensuring continuity, future growth and a successful

growth strategy.

/16SENIOR SOLUTIONS

Many seniors have decades of experience and knowledge to pass on.

20 CEB, ‘Closing the Leadership Gap in Asia’, 2012, www.executiveboard.com/exbd/en-sg/human-resources/asia-hr-leadership/leadership-gap-asia/index.page.

Why retain older workers?

/17

FIGURE 3

Accumulated knowledge

Flexibility in terms of work hours and pay

Judgment and problem-

solving abilities

Ability to empathise with older customers

Strong commitment

to work

Interpersonal skills

Tendency to stay in the

same job for longer

Source: Silver Group consultancy

Age-friendly workplaces

Consultants are now advising businesses on the design, comfort and appeal of their

work spaces to older workers.

In Singapore, for instance, the Silver Group consultancy conducts Age Friendly (AF)21

workplace audits for companies. This audit examines more than 200 touch-points,

including workers’ commute in to the office, the workplace itself, workers’ knowledge

and compliance. The result of such audits points to the advantages of creating ‘age

neutral’ or multi-generational workplaces, promoting privacy as well as collaboration,

easy access and use of facilities, and user-friendly technology as a way of drawing

senior workers back to the office.

Changes employers are making to become more ‘age friendly’ include paying closer

attention to the accessibility of toilets, step-free access to buildings, easy-to-read

signage, large-print materials and, of course, user-friendly technology. There are no

silver bullets when it comes to managing workforce demographic change on the scale

that is being seen due to ageing – but good planning can help.

/18SENIOR SOLUTIONS

The result of such audits points to the advantages of creating ‘age neutral’ or multi-generational workplaces.

21 Kim Walker, Silver Group, ‘What is an Age Friendly workplace?’, September 2014, silvergroup.asia/blog/what-is-an-age-friendly-workplace.

Silver surfers

Bear in mind it might be a mistake to presume that retirees need special attention

when it comes to technology. In fact, older individuals are some of the fastest

technology adopters.

The 55–64 year age bracket is the fastest growing demographic on Twitter22 with

79 percent growth rate since 2012. The fastest growing demographic on Facebook’s

and Google+’s networks are the 45 to 54 year age bracket at 46 percent and

56 percent, respectively.

Seniors in Asia (Japan, China and India) are in fact more technologically savvy than

their counterparts in the West.23 In these countries, 70.7 percent of those aged over

55 use a mobile device as their primary way of communicating, compared with

32 percent in Germany, Spain, the United Kingdom and the United States.

/19SENIOR SOLUTIONS

Seniors in Asia are more tech savvy than their counterparts in the West.

22 Global Web Index, ‘Stream Social Q1 2013 report’, May 2013, blog.globalwebindex.net/Stream-Social.23 McCann, ‘The Truth about Connected You’, 2013, mccann.com/wp-content/uploads/2013/02/Truth_About_Connected_You.pdf.

/20

Recommendations for Human Resource and Business Leaders

With workers ageing fast right across the Asia-Pacific—and the world—governments

and business leaders need to ‘future proof’ their organizations by putting the building

blocks in place to support a truly ‘multi-generational’ workforce.

Here are some steps that can be taken to help with this transition:

• Devise an overarching strategy for retaining older workers and make it your number

one priority as part of your planning for the next five to 10 years.

• Encourage and promote the strategy internally: secure the necessary buy-in from

the executive leadership so your strategy carries significant weight at highest level.

• Look at ways in which older workers can be used as leaders through mentorship

programs, to pass on their valuable insights, skills and knowledge.

• Consult employees about desired training and draw up new training modules that

include both young and older employees.

• Provide training in all new technologies for older workers as part of learning and

development strategies.

• Evaluate your company’s processes, culture and working environment to gauge

its age-friendliness.

• Investigate government policies and resources for businesses seeking to support

older workers in continuing work or returning to the workforce.

/21RECOMMENDATIONS FOR HUMAN RESOURCE AND BUSINESS LEADERS

EXIT

ABOUT KELLYOCG

KellyOCG®, the Outsourcing and Consulting Group of workforce solutions provider, Kelly Services, Inc., is a global

leader in integrated workforce solution delivery for clients worldwide, utilizing proven talent supply chain strategies.

In addition to integrated solutions, KellyOCG specializes in Recruitment Process Outsourcing (RPO), Business Process

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ABOUT THE AUTHOR

ANTHONY RAJA DEVADOSS is Vice President, Asia-Pacific for Kelly Outsourcing and

Consulting Group. In this role, Devadoss is responsible for KellyOCG’s entire operations in

Asia-Pacific and leads the growth of the company’s main business practices in the region,

which include Executive Search, HR Consulting, Career Transition & Global Managed Services.

Devadoss is also the current Deputy Chairman of Outsourcing Malaysia (a chapter of PIKOM,

the National ICT Association of Malaysia) and the Co-Chairman of the HR Committee of

American Chamber of Commerce (AMCHAM). He holds a Master’s Degree in Business Administration, majoring

in marketing and management information systems and is a certified SHRM Human Resource Management

Professional (HRMP™), facilitator for Manager as Coach Learning Series™, career transition consultant and life

options retirement coach. http://my.linkedin.com/in/anthonyraja http://twitter.com/anthonyraja

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