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 an elderly population of about 3.6 million by 2021, which is 16.7 percent of the total population, and by 2041, one fourth of the population would be elderly. This paradigm shift has enormous implications to business organisations, particularly on the way the companies operate and the markets they serve. However, companies are somewhat slow to respond to this as they are more concerned with the immediate crucial business issues. This article highlights the key implications of the ageing population, encouraging the corporate world to proactively take measures in responding to this phenomenon without further delay.
Loss of expertise: ‘Brain drain’
Companies will face a large-scale exodus of talented and experienced 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 experiencing this kind of phenomenon more. These employees will take away accumulated organisational knowledge, including the 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 organisations.
Shortage of young talent
Companies will find difficulty in recruiting talented young people due to the shortage of young talent in the national labour force.
As the developed countries would also face a 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 lifestyles make elderly people live healthy and active even at the 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 the 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 the terms and conditions can be renegotiated as the employees get older.
Training could be provided to older employees on an 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 for elderly parents, which would affect the employees paying full attention on the work, impacting their productivity.
Health and safety
Promoting the health, wellbeing and work-life balance of all staff is important to ensure the employees remain active and productive. Companies should ensure the highest level of safety as the employees may have age-related disabilities and diseases.
Companies must create flexible working arrangements to appeal the older workers and the workers with age-related disabilities, who would no longer wish to work traditional full-time schedules.
Companies can ensure a favourable working environment by removing some of the physical barriers and modify the work environment to suit the older employees, through which the companies could make the workplace more accessible for all the employees, including those with disabilities.
Age discrimination in workplace
Older employees may face some kind of age discrimination, because of the attitude of the 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 the elderly. This requires change in behaviour 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 the age of 50 years would be the growing market segment representing huge market opportunities attractive to many product and service providers particularly in healthcare, pharmaceuticals, leisure, tourism and financial services.
Companies will need to redefine their marketing strategies and adjust their businesses to cater to the silver market.
Role of financial institutes
Financial institutes, particularly insurance and banks, have a key role to play in creating a high level of awareness among the 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
Organisations could take measures on raising public awareness on elderly and protect their rights and support to fulfil their needs such as establishment of care centres, medical camps, distribution of disability aids and could also financially assist the needy public hospitals on improving healthcare facilities provided to senior citizens, under corporate social responsibility initiatives.
In conclusion, the 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. (Zahran Sikkanther Lebbe is an Assistant General Manager of a leading organisation. 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)