When retirement age looms, many finance professionals will have clocked up 40-odd years’ worth of skills, knowledge, professional networking and business insight. But while the well-earned retirement has traditionally been seen as the ultimate, much anticipated goal, increasing numbers of employees are looking to stay working – or even return to the jobs market – and keep burnishing their hard-earned talents and experience.
For firms, that represents an unmissable opportunity to hook talent in what is a shrinking and heavily fished pool.
Pulling older professionals back into the jobs market is a key goal for all organisations
Data from the Organisation for Economic Co-operation and Development (OECD) shows there has been a reversal in the long-term trend towards early retirement. However, a study by Bain, Better with Age: The Rising Importance of Older Workers, finds that too few firms recognise the changing needs and priorities of older workers or invest in integrating them into their talent system. It also points out that creating roles to benefit both older workers and the organisation is a business imperative.
Nevertheless, there are companies that genuinely value their older staff and actively embrace their contributions.
‘We strongly believe in the value of diverse perspectives and experiences. As part of our commitments to fostering an inclusive workforce, we actively seek to hire individuals from different age groups and cultural backgrounds. We recognise the unique contributions that older talents bring to our organisation,’ says Roy Lo, managing partner at accounting and consulting firm SW Hong Kong.
The business imperative comes from the inexorable reduction of the workforce – the available talent pool – in developed economies in particular, but also more widely. China’s workforce, for example, started contracting nearly a decade ago, and demographers predict the country will lose nearly 150 million workers by 2040 and see its over-65 population double by 2050.
There are multiple reasons for this shrinkage. Long-building demographic trends, combined with decades of declining fertility rates and changes in work expectations among younger generations, have combined with the impact of the Covid pandemic not just to diminish the size of the workforce but also to age it. Both these factors should make pulling older professionals back into the jobs market a key goal for all organisations that need talent for business as usual, let alone growth.
‘Within the accounting and finance landscape, the demand for senior executives who have an extensive network and accumulated knowledge still remains,’ says Andre Springett, associate director in accounting and finance at recruitment agency Randstad Hong Kong. ‘However, companies may choose to hire younger professionals, who are perceived to be more digitally adept, agile and characterised by a growth mindset.
‘This is in no way undermining the value of mature workers. Rather, it highlights the importance of a diverse and balanced workforce that blends established expertise with the energy and creativity brought forth by younger talent.’
The lack of talent in the market, the weakening loyalties of a younger workforce and the skills gap have become widespread concerns. With this in mind, many countries are pushing up their retirement ages. France, for example, increased the statutory retirement age from 62 to 64 earlier this year (although 67 remains the age for automatic entitlement to a full pension), and the UK is expected to raise its state pension age soon from 66 to 67. The Bain report predicts that older workers will make up 27% of the working population in G7 countries by 2031 (four percentage points higher than in 2021, and over nine percentage points higher than in 2011).
‘Older employees tend to be more stable and calmer in handling unexpected situations’
Seize the grey
Practices need to get busy chalking out plans to integrate these older professionals into their talent pool. That may go against the traditional grain – a 2020 AARP (the American Association of Retired Persons) report found that less than 4% of all organisations had such plans in place, although 27% said they were likely to go down this path – but unless they seize the opportunity, they may find others will beat them to it.
Some firms, though, do have their finger firmly on the talent pulse. Clement Chan, managing director of assurance at BDO in Hong Kong, says: ‘If qualification and experience match and fit our requirements, age is pretty secondary. Older members of the workforce tend to be more stable and calmer in handling unexpected situations. They have wider experience and greater exposure that they have gained through their long career. The only challenge is their ability to mingle with younger staff, which tends to be limited.’
When it comes to hiring older staff, there are clearly challenges to be overcome.
Erin Cheung, associate director at employment agency Michael Page Hong Kong, says: ‘For positions requiring a certain level of travelling, companies are more likely to hire the younger generation to avoid health and physical limitations. One of the key challenges is position sustainability. This means the organisation has to hire a successor in anticipation of older staff retiring, which leads to staff turnover and budget issues.’
Yet older staff also offer particular advantages for employers. The Covid pandemic was accompanied by the Great Resignation, with millions of mainly younger employees deciding to quit in search of better working conditions and roles that offer fulfilment and purpose. The phenomenon underscored the greater job stability and loyalty of older employees.
Money may also be less of a priority for older professionals. At the tail end of their careers, they often put more of a premium on satisfaction and optimal working conditions than on maximising remuneration.
‘Older staff have a stronger ability to understand and address complex issues’
Perhaps, most of all, it is older employees’ stack of expertise gained, as it has to be, over many years of practice that is the big draw. As Cheung says: ‘Older staff bring a wealth of knowledge and expertise gained from numbers of companies and years of work experience. They have a stronger ability to understand and address complex issues, which supports more all-round decision-making and problem-solving approaches. They can also act as mentors to a younger generation, sharing both successes and failures, which are very valuable learning lessons.’
The demographic truth cannot be ignored: the young talent that firms have relied on for so long is becoming ever harder to find, let alone recruit and retain. Solving the talent shortage is going to require radical action. If hiring and holding on to older professionals offers a solution that will also improve the balance and diversity of firms, then so much the better.