Sri Lanka being a developing country is demographically on par with developed countries and it is one of the fastest ageing countries in the world.
Population projection shows that Sri Lanka would have elderly population of about 3.6 million by 2021 which is 16.7% of the total population and by 2041, one fourth of the population would be elderly.
This paradigm shift has enormous implications to business organizations particularly on the way companies operate and the markets they serve. However companies are somewhat slow to respond to this as they are more concerned with immediate crucial business issues.
This article highlights key implications of the ageing population encouraging corporate world to proactively take measures in responding to this phenomenon without further delay.
Loss of expertise: The “Brain Drain”
Companies will face large scale exodus of talent and experience human capital from their workforce reaching their traditional retirement age. This would create many job vacancies which are hard to replace. The industries which rely on technical skills and knowledge would be more experiencing this kind of phenomenon.
These employees will take away accumulated organizational knowledge including key information with them, creating “brain drain”.
Companies could develop appropriate strategies to retain older workers and transit their knowledge effectively to other employees, in order to sustain the knowledge level in the organizations.
Shortage of young talent
Companies will find difficulty in recruiting talented young people due to shortage of young talent in the national labor force.
As developed countries would also face the similar problem, many young local talents may consider migrating to developed countries which would further reduce the local workforce.
Change in traditional retirement age
Modern medicine and healthy life styles makes elderly people live healthy and active even at oldest ages and as a result many of them may prefer to remain in the workforce even after their retirement age.
Hence, traditional retirement ages will be no longer appropriate and companies will have to adjust their retirement policies accordingly.
Seniority based wages is common in countries like Sri Lanka and hence it is expensive for companies to retain older workers. However companies are moving towards a performance related pay scale where terms and conditions can be renegotiated as employees get older.
Trainings could be provided to older employees ongoing basis in order to keep their skills and knowledge up-to-date to improve their productivity level.
Young employees will also face with the challenges of balancing their work with caring of elderly parents which would affect the employees paying full attention on the work, impacting on their productivity.
Health and safety
Promoting the health, wellbeing and work-life balance of all staff is important to ensure employees remain active and productive.
Companies should ensure highest level of Safety as employees may have age related disabilities and diseases.
Companies must create flexible working arrangements to appeal older workers and workers with age-related disabilities who are no longer wish to work traditional full-time schedules.
Companies can ensure a favorable working environment by removing some of the physical barriers and modify the work environment to suit older employees, through which companies could make the workplace more accessible for all employees, including those with disabilities.
Age discrimination in the workplace
Older employees may face some kind of age discrimination, because of the attitude of employers or colleagues such like curtailing their employee benefits, limiting their training opportunities or limiting their job responsibilities.
Companies have to take certain measures to avoid age discrimination in the workplace and build a positive culture towards elderly. This requires change in behavior and attitudes on the part of employers, supervisors, and to some extent workers themselves and implement legislation to combat age discrimination.
Emerging market segment
Those over age of 50 years would be the growing market segment representing huge market opportunities attractive to many products and service providers particularly in healthcare, pharmaceuticals, leisure, tourism and financial services.
Companies will need to redefine their marketing strategies and adjust their business to cater for the silver market.
Role of financial institutes
Financial Institutes particularly insurance and banks have key role to play in creating high level of awareness among the general public on the needs of retirement plans and savings schemes and assist them on financial planning to live their late ages free of financial burdens.
Corporate Social Responsibility (CSR)
Organizations could take measures on raising public awareness on elderly and protect their rights and support to fulfill their needs such as establishment of care centers, medical camps, distribution of disability aids and could also financially assist needy public hospitals on improving health care facilities provided to senior citizens, under Corporate Social Responsibility initiatives.
In conclusion, Ageing Population brings enormous implications to business entities. Companies could proactively align their strategies and actions to face the implications of this paradigm shift, without delay.
(The writer is an Assistant General Manager of a leading organization. He is a graduate of the Chartered Institute of Marketing and Wayamba University of Sri Lanka. You can share your feedback on Zahranlebbe@gmail.com )