Mercer Hong Kong
As global awareness of the importance of diversity intensifies, the positive impact of this movement is increasingly felt in the workplace. While diversity encompasses numerous facets, age, in particular, needs attention as Hong Kong contends with the fastest-ageing economy in the world, and the lowest population share of children under 14 years old.
With longer lifespans and declining birth rates, workforces are increasingly diverse in age demographics. But harnessing the full potential of an intergenerational workforce requires new and innovative solutions and ways of thinking. We look at trends in multi-generational workforces and how organisations in Hong Kong can address the needs of our most valuable asset – our people – and maximise their potential.
Workforce of the future – embracing age diversity
The business case for age diversity is nothing new. It brings a variety of perspectives, experience, technological readiness and expectations to the workplace. In addition to benefitting employees and culture, diversity has also demonstrated to positively impact organisational strength and performance.
While developing the workforce of the future has been on companies’ agenda for the past few years, COVID-19 has made it more topical now than ever. “When we discuss the future of work, it is often in the context of technology and transformation,” says Vicki Fan, CEO of Mercer Hong Kong.
“Another critical aspect is the people and skillsets that make up your future organisation,” says Fan. This has implications spanning from talent strategy, development and upskilling, through to succession planning. She stresses, “Your workforce is unlikely to evolve with acceleration or agility if the way it is planned follows the same old template.”
Companies need to rethink their approach to workforce investment and growth. “A healthy workforce is not a stagnant workforce,” says Richard Roper, Health and Benefits Leader at Mercer Hong Kong. “If you get it right, an intergenerational workforce is optimised so you can bring out the best in everyone, whatever stage of work or life they are in.”
Many organisations have employees that watched black-and-white television, as well as those that never knew a world without the internet. Adeline Tan, Wealth Business Leader at Mercer Hong Kong, elaborates that “As a leader, the aim is to align them to help move the business forward.”
Looking after an intergenerational workforce
Building a thriving multi-generation workforce starts with creating better benefits experience. As they say, take care of your employees, and they will take care of your business.
Underpinning the effective planning and design of benefits is the ability to understand and analyse employees and their behaviour. This allows organisations to ensure benefits are relevant, appropriate and – more importantly – utilised in a way that supports employees and may even reduce costs for employers.
Encouragingly, we see employers taking different employee attitudes into account when designing healthcare benefits, as evident in the uptake in flexible benefits schemes. “It used to be that everyone got the same benefits, but a lot of it was irrelevant for younger employees,” Roper explains. “Today, advanced benefits platforms allow employees to buy the right rewards for their time of life.” The freedom associated with newer benefits, such as the ability to buy or sell holidays, has proven popular with employees across the age spectrum.
Retirement benefits are another area where employees have differing needs. Companies are now more open to designing retirement planning for various age groups, so employees have relevant investment options across their life stages. To draw younger employees towards thinking about their pensions sooner, companies have increasingly provided investment options that are higher risk in nature.
“While a greater diversity of funds and more exciting options attract younger employees, this also benefits risk takers in older groups, and would be hard to justify without an intergenerational workforce,” Tan says. She also notes that in Hong Kong, since individuals cannot remain in their pension scheme beyond the retirement age of 65, a protected arrangement to benefit from tax savings or preferential rates is required.
Managing the careers of an intergenerational workforce
Generational differences, when not managed properly, can create workforce tension and challenges for leaders, as they view career development and advancement in radically different ways. According to the Mercer 2020 Global Talent Trends (“GTT”), the majority of the Baby Boomer generation (72%) intend to work past retirement. On the other hand, 55% of Gen X feel that advancement opportunities are limited due to the top layers delaying retirement, while 43% of Gen Z expect career progression/ promotion within a year.
These competing challenges require companies to rethink their career architecture and learning strategy, particularly around agile structures, job redesign and upskilling. The focus areas will ensure an intergenerational workforce to be future-fit and mobile, as well as help alleviate the talent issues involved.
One way of improving the career crunch an organisation’s multi-generational workforce face is by providing alternative and stretched assignments, cross-department opportunities or cross-lineof- business chances to build their skills. “These lateral movements are critical, and termed career enhancement, rather than just focusing on career advancement,” says Darryl Parrant, Career Leader at Mercer Hong Kong.
“This is especially the case since Gen Y feel like they cannot easily step up, with the GTT reporting that 47% of respondents feeling there is no structure in place to support a career change,” says Parrant, who adds that “we are seeing more and more companies looking for guidance and support in new innovative career frameworks and competency models.”
Furthermore, if one were to reimagine work in a way that enables everyone to work more flexibly and explore alternative avenues of employment, a new balance could be struck. “We see more young people starting their careers as freelancers and entrepreneurs,” says Parrant, “and this requires a new attitude to how, when and where people work.”
He adds that a balanced talent ecosystem also requires organisations to consider a variety of ways of getting work done – everything from adopting flexible work practices to establishing a contingent workforce model, using automation to building more strategic partnerships.
Diversity requires an organisation-wide approach
Beyond the benefits of adapting to a multigenerational workforce in terms of pension planning, wealth considerations, flexible benefits, workforce flexibility and diversity of thoughts, there is a human advantage in listening to people from various groups. Mercer’s report on Diversity & Inclusion Technology: The Rise of a Transformative Market finds that, “leaders increasingly understand that not having a diverse organisation and an inclusive culture is a systemic problem, therefore individual interventions alone will not work.”
The power of a multigenerational workforce lies in its diversity of perspectives and experience. With communication, flexibility and openness to set aside assumptions and actively listen, that power can be harnessed to springboard businesses and the world of work forward.