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The issue of increasing longevity and whether retirement ages have been set too low would seem like a low priority issue for South African employers and policymakers. Surely addressing the crisis of youth unemployment warrants greater attention? The problem here comes when we see these two concerns as mutually exclusive. By promoting the needs of youth at the expense of the aged, we ignore the interconnectedness of intergenerational dynamics. We prioritise because we believe limited resources dictate prioritisation, but occasionally we find that suppressing the interests of one group only exacerbates achieving the needs of another.
What follows is a discussion of the missing age dividend. Framing our understanding of the value of older workers should give employers pause for thought – and a deeper appreciation of what stands to be lost.
As we’ve seen, making HR policy decisions based on hunches and intuition can result in some disastrous business choices. With transformation a priority in South Africa, employers tend to assume the most obvious way to achieve it is to have older employers step aside to create opportunities for a new generation of workers. On what basis have we made that assumption? The power of HR data analytics is that we can test these assumptions empirically.
As we discussed in last year’s Benefits Barometer, studies from Scandinavia and Germany are challenging these conventions by suggesting that productivity and, by extension, job creation can actually increase when older, experienced workers are retained. But why rely on secondary information when we can do the research ourselves?
Let’s extend the discussion of older people to beyond the immediate workplace. We tend to assume that older people are an economic deficit. As the 2015 World Health Organization (WHO) study on ageing and health argues, “we need to start adapting to shifts in age structure in ways that minimise the expenditures associated with population ageing while maximising the many contributions that older people make … economic analyses of the implications of population ageing are evolving, and the models that are often used today may lead to inappropriate responses1.”
The report cites an economic indicator known as the dependency ratio, which defines anyone older than 65 as a ‘dependant’, ignoring the fact that “chronological age is only loosely associated with levels of functioning2”. As we’ve seen, there are many people over 65 who are earning incomes. More importantly, a large percentage of people in post-65 careers are engaged in mentoring, consulting and the creation of small business enterprises that are the backbone of developing a robust SMME sector for job creation.
In addition, people over 65 may have retirement savings that can be redeployed into the economy through assisting with the education needs of younger family members, the funding of ‘second-start careers’, spending on ‘grey-product’ consumption, intergenerational wealth transfers, and taxation ... to say nothing of the benefits elderly people provide through volunteer work and social care in their communities.
A 2010 study from the UK reframed the costs of caring for the aged against these economic contributions. It became apparent that older people were actually making a net contribution to society of nearly £40 billion (R683 billion). This was expected to grow to £77 billion (R 1 314 billion) by 2030.
While we don’t have comparable research for a developing economy, we do believe that South Africa’s cut-off age of 60 for being a productive economic contributor is simply nonsensical.
There is simply no substitute for applying a careful, disciplined measurement of performance drivers to prevent rash decisions being formulated.
The WHO study introduces us to a different economic model that helps us understand that investing into addressing the needs of the elderly actually has a meaningful pay off.
Figure 3: Investment in and return on investment in ageing populations
In addition to the economic benefits we have described, that pay-off includes:
Framing the discussion on ageing in this light allows policymakers to have a more considered view of the fair distribution of society’s resources. As the authors of the study argue, “reframing the economic questions in this way shifts debate from a singular focus on minimising the costs of population ageing to an analysis that considers the benefits that might be missed if society fails to make the appropriate adaptations and investments3.”
But let’s return to our opening discussion where we suggested that the interests of the elderly and the youth are not mutually exclusive. Intergenerational reciprocity is still the most prevalent fall-back position for caring for the elderly. So, when our institutions fail to provide the necessary support (as seems to be increasingly true in South Africa), many employees, particularly young black women, have no option but to pick up the slack for their families.
Conversations with HR directors across large and small employers alike, confirm this pressure persists. After the loss of employees to maternity or paternity obligations, the next big impediment to employment continuity is loss of an employee to family care obligations.
We believe this is one area where employers could identify potentially creative solutions. Are there not ways employees could apply for paid (or unpaid) family-care sabbaticals, much like maternity leave, so they could leave work for a period of time to provide basic care to a significant other?
Canada, for example, has recently changed its labour laws to allow for the following types of leave:
Are these not benefits that would speak directly to the heart of the care crisis in South Africa? Can we actually afford to not consider them?
Take age off the table and the decisions about how someone is best deployed in a company should be consistent with the best HR policies. These policies (discussed in detail in 'Benefits that matter') argue for the benefits of diversity, non-hierarchical management structures, flexible schedules and the desperate need for continuous training and mentorship in South Africa.
HR departments and employers generally know which employees are contributing, and how much, and where they could be best deployed at any given time. Performance measurement is a well-entrenched practice. The decision to work (or continue to work) should be a win-win for both parties – continued value to be contributed and a continued desire to keep contributing.
We all work for different reasons:
The workplace will be a better place when ageism is removed and people remain because they passionately want to be there.
1 World Health Organization. 2011. WHO Study on global AGEing and adult health (SAGE).
3 World Health Organization (2015), p. 17.
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