Human Capital Challenges

Human Capital Challenges

Gwendolyn Brown, Chad Golding, Cathrene Mupfumira, Jacob Powell, and Lisa Russell

Group C

        Introduction        

        With technology being in the spotlight for many years and company’s trying to keep up with the technological changes, many lost sight of the aging workforce (Baby Boomer generation) and their upcoming exodus from the workforce.  This demographic change will have an everlasting impact on the workforce.  The Baby Boomer generation will be taking “knowledge, experience and wisdom necessary for subsequent generations to successfully run their organizations.” (Metcalf, 2017).  However, with careful strategic planning companies can navigate through demographic shift by focusing on recruiting and retention and offering the retiring baby boomers extended employment and aligning them with the next generation to prepare to take over where they left off.

Research

        According to Hashim & Hameed (2012), the modern business can not effectively operate in the business world if the human force is not well equipped with the latest technology and techniques. “Technology is certainly one of the most important drivers in today’s economy” (Boutellier & Heinzen, 2014, p. 36). Organizations who implement technology improve employee’s performance, facilitate job-tasks, improve communication, increase efficiencies, and have higher levels of effectiveness in work management. (Imran, Maqbool, & Shafique, 2014). Advancements in technology has changed the nature of work, therefore employees require the skills and knowledge to perform the tasks effectively. (Imran, Maqbool, & Shafique, 2014). Organizations must use and implement the latest technology and practices to stay competitive in their industry and globally. [How does this paragraph tie in with the aging workforce and retention? This is the only place that technology is mentioned.]

        “Employee turnover is one of the main issues that extensively affects the overall performance of an organization. (Tariq, Ramzan, & Riaz, 2013, p.700).  Employees leave organizations for several reasons including “workload, work stress, employee salary, job satisfaction, and work family conflict.” (Tariq, Ramzan, & Riaz, 2013, p. 701). Organizational performance decreased when employees left jobs because of their inability to perform the tasks associated and were ineffectively managed in the process. (Tariq, Ramzan, & Riaz, 2013, p. 701).  Finally, lack of job security is another reason for turnover. (Tariq, Ramzan, & Riaz, 2013, p. 701). Organizations that suffer from high turnover rates “suffer from stability, consistency and continuity of work, makes long-term planning more difficult, leads to shortages of staff which, in turn, can raise the workloads of other employees, and raises the costs of recruiting and training staff.” (Tariq Ramzan, & Riaz, 2013, p. 702).

Another issue that will affect organizations is the aging baby boomer generation and their impending retirement.  According to Burtless (2013), as the baby boomer generation (individuals born between 1947-1964) passes middle age and approaches retirement, a rising percentage of the employed population will be older than age 60 in the coming years. Baby boomers are getting closer to traditional retirement age, but they also appear to likely continue their labor force participation longer than their predecessors. (Brownell, 2014). “Older adults, particularly in developed western countries like the United States, are living longer and healthier lives and may seek to remain productive in the workplace, through both paid and volunteer work.” (Brownell, 2014).

Brownell (2014), emphasizes and suggests that a common misconceptions of older workers include the belief that older workers take more time off, have decreased performance, have more accidents, are less adaptable, are merely waiting to retire, take jobs away from younger workers, and are incapable of learning new things. Other misconceptions of older workers are that they are resistant to change, unenthusiastic, less knowledgeable, not interested in training, and are unwilling to gain new knowledge. In an AARP survey, “more than two-thirds of older workers indicate that they wish to work either full-time or part-time after age 65.” (Lewis, n.d.).  In most industries and offices today, new automation is in place that allows for older workers to handle many of the demands as younger workers. “BMW uses older workers on an auto assembly line with minimal accommodations for their age (larger computer screens, special shoes, and chairs for some operations.  Older employees frequently outdo their younger colleagues.  They have less absenteeism, less turnover, superior interpersonal skills, and deal better with customers.” (Lewis, n.d.).  “

Misconceptions held against older workers have led to ageism, age discrimination, and age prejudice. “As a nation confronts an aging workforce, it is also an increasingly broader class of workers whom the United States Equal Employment Opportunity (EEOC) provides the right to protections.” (Brownell, 2014). “In 2004 the EEOC reported having received almost 18,000 complaints filed under the Age Discrimination in Employment Act.” (Brownell, 2014). Managers have a legal responsibility of creating an organizational culture and climate that supports older workers and enable their companies to reap the benefits of employing old workers. (Brownell, 2014).

Discussion

Recruiting and selection of employees is one of the most important aspects of a company in terms of corporate success, workforce production, and employee satisfaction.  Human Capital planning should be a viable part in companies worldwide.  An effective plan will allow a company to look at their current talent, determine what will need to be replaced, and what training/onboarding objectives to reach.  

Baby boomers will affect every corporate strategy in regards to recruiting.  As the baby boomer generation inches closer to retirement, the U.S. moves ever closer to a potential labor shortage.  The Bureau of Labor Statistics presents that the labor growth rate between 1950 and 2000 was 1.6% and fell to 1.1% between 2000 and 2012. (Kronos, 2006).  The annual growth rate is projected to fall to .06% when the forecast is stretched out to 2050.  When there are less employees entering the workforce than retiring, companies must effectively utilize recruiting to combat shortages.  “Despite projected growth in the global population from 6.9 billion to 7.6 billion in 2020, the working-age population is expected to decline. In fact, aging will likely add 360 million older people (Baby Boomers) to the world’s pool of those not participating in the labor force.” (Sladek, n.d.).  In order to prepare for this shortfall, companies must develop strategies to hire, retain, and train workers who will give their company a competitive advantage.  In order to prepare for the exodus of the baby boomer generation from the workforce, companies must focus on “enhancing the next generation’s skill sets – especially in regards to leadership.” (Sladek, n.d.).