The document discusses the critical challenges faced by organizations due to the aging workforce, particularly the impact of the retiring baby boomer generation on labor supply and costs. It highlights trends indicating a shortage of younger workers and emphasizes the need for companies to adapt through strategic investments in health programs, training, and innovative management approaches. The text also introduces tools like the 5V-scorecard for measuring and managing workforce productivity and creativity in the context of an aging labor population.

1. Mehran University of Engineering and Technology,
Jamshoro, Sindh Pakistan
ASSIGNMENT #2
HUMAN RESOURCE MANAGEMENT
SUBJECT TEACHER:
PROF. DR. RIAZ AHMED SOHAG
SUBMITTED BY:
MOHAMMAD YOUNUS (08IN70)
DEPARTMENT OF INDUSTRIAL ENGINEERING &
MANAGEMENT
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2. AGING WORKFORCE
INTRODUCTION
With the increase in competition the business in developed countries are facing the lot
of critical challenges. One of them is the aging workforce. Today the executives of
organizations are wakeup to realize that their firm will encounter a wave of retirement
over the next decades as the baby boomers of the past World War II reaches to
retirement age.
To retains in this highly competitive market and adopt a strategy in order to win the
order acceptable & winning criteria requires a lot of efforts of young workforce but the
aging workforce wont do so .
WHAT IS AN AGING OWORK FORCE???
The actual definition of the aging varies great depend upon the source. Legally an
aging worker considered to be 45 and older age.
(The age discrimination employment act 1967 )
Other agencies consider an aging employee to be 50 years or older.
(The committee of economic development)
And the survey of human professional revealed that management varies greatly in their
opinion with age ranging being b/w 40 to 70 years.
(Society of human resource management June 2003)
AGING WORKFORCE TRENDS
There are basically two trends of aging workforce
i) Baby boomers
ii) generation X
BABY BOOMERS
Baby boomers (born b/w 1946 to 1964) comprise almost 46% of the workforce & they
are rapidly approaching to retirement.
Those born in 1946 have revealed the age of 60 in 2006, with an expected significance
wave of retirement starting from 2006 onwards.
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3. GENERATION X
The generation X includes those workers who born b/w 1965 to 1983 and they would
naturally called as the replace of baby boomers.
The generation X workforce comprises almost 30 % of the workforce the end result is
that there are not going to be enough workers to meet labors force requirements. The
population trends regarding generation X are fairly certain at this time is whether the
baby boomers will be swift or gradual.
Important to remember
Recent studies of the older worker by American association of retirement of workers
(AARP) indicate that the many Americans care choosing to work beyond the rational
retirement age. For some, the reason is financial they do not have suffientest savings to
retire. For other there is a drive to remain connected to their work, finding that it
provides a sense of purpose & the opportunity to remain socially connected.
Infect according to recent AARP studies expected two third of the baby boomers
plans to contributed to work during their retirement year- by 2010.
CRITICAL CHALLEGES OF AN AGING WORKFORCE
In this modern world where business is highly competitive and for the survival its requires
highly human competencies, skills, brainpower, innovative, skill miss peoples for
corporate sustainability but what is surprisingly impact in today’s world is the booming
effect of workforce.
To be with the booming (aging) workforce organizations are strive to face a lot of
challenges. Some of them are as follows.
ESCALATING COST
Companies have been focusing in reduction of cost through downsizing, outsourcing,
reengineering & other methods during most of 1990’s and early 2000’s. in most
instance, admirable cost efficient & lean organization have been successfully
achieved. Now however, the world is entering a new era of unavoidable cost
escalations, especially due to the significantly increases cost of skilled human
resources. It is simple issue of supply & demand, the shrinkage supply of talent & skills
and increasing demand for high level knowledge & innovative labor force, leading to
workforce cost escalation.
Furthermore, the aging workforce requires significantly additional investment in the
right type of company facilities, health programs, appropriate technological supports,
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4. retention & rejuvenation incentives & further training & development. All of this mean a
imminent escalation of cost for any enterprise that requires the right types pf expected
to move in the senior management ranks, will not grow but significantly decline ( by 19
% in the U.S, 27 % in Germany, 19 % in the U.K, 9% in Italy and respectively 10 % & 8% in
JAPAN & CHINA ). Conversely, the number of aging workers will increase subfamily e.g
in the U.S the workers aged 45 to 54 will grow by 21 % , & the number of 55 to 64 years
old will grow by 52 %
As a result of this retaining the aging workforce causing o creates within an
organization because of empowerment in the authority & not following the act.
THE PRESSURE OF INNOVATION
(The Necessity to re-invent company value (products & services) in the knowledge –
networked global economy)
Another reason why the aging workforce is becoming a critical issue right now is the
global pressure on innovations. It is a well know fact that since mid – 1990’s the world
has shifted from an industrial economy to a knowledge- networked, globalization,
speed of information exchange, & rates of new product / service innovation.
Combined with increased speed to market in globally – integrated demand & supply
chain. With a declining & specially aging workforce the pressure to maintain & expand
strategies & operations tools to contain such costs within competitive parameters. It
also requires a new mindset concerning employees & their related cost in the future,
enterprise will see their workforce increasingly as an investment rather than just cost to
be contained or so controlled.
CAN THESE CHALLENGES BE MANAGED ???
How, what , where are the solution for my companies ???
The challenges of an aging workforce can indeed be managed, but as indicated above it
will require a paradigm shift for enterprise leadership & organizational management.
Three essential pre-requisites of such a paradigm shifts are
i) REALIAZATION == Realization, based on a through understanding of the interested
advantage concerning the aging workforce.
ii) Insight into the implications of an aging workforce of an enterprise business model.
iii) Strategic & operational capabilities to conceive (design) & implement appropriate
solution- what we term action fields in this article to handle the challenges of an
aging workforce.
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5. THE PERFORMANCE OFAGING WORKFORCE SHOULD BE MEASURES??
As we know that every management expecting from the workforces
the two most value added dimensions i-e increase productivity & increased
creativity. Productivity is basically the efficiency mechanism and is concerns, with
either greater output for same input, or sense output for less input.
Existing management already minders that the aging workforce is necessary
causes the declining the productivity because an aging workforce posses lack of
creativity and innovations.
There fore today’s management is be very much careful in managing the aging
workforce as means to at least the actual productivity.
5V- SCORECARD for measuring the performance of an AGING
WORKFORCE
The various attempts are made to measure the performance of an aging
workforce; the 5V- scorecard is one of them.
It is basically the concept of an integrated aging workfare scorecard tool
consisting of face critical aging workforce areas to manage, guide and measure
both creativity & productivity of an enterprise aging workforce. These are five
basically organizational fields…
i) enabling new managerial mindsets
ii) Facilitating new knowledge management process.
iii) Implementing appropriate health ( physical, mental & emotional ) process.
iv) Adopting relevant human resource management (HRM) programs &
practices & Faciliting appropriate work environment
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