The Silver Revolution

Introduction

With the demise of the default retirement age employers urgently need to consider how they motivate the army of older workers planning to stay on for the long term.  Most are loyal and happy at work, which is a great start. But isn’t enough: being happy and being productive are not synonymous. Older workers plan to stay where they are so it’s vital for employers to inspire them to deliver their best.

Background

The UK, in common with the rest of Europe, is facing the prospect of a rapidly ageing population. By 2020 it is estimated that a third of the UK population will be aged over 50. Indeed, figures from National Statistics* suggest that 50-55 year olds will be the largest single age group of workers – making up 12% of the workforce. Welcome to the era of the ‘grey majority’.

Government policy is to increase the state retirement age to 66 in 2016 and to 68 by 2046. At the same time the default requirement age of 65 is being phased out from April 2011.

Meanwhile fewer of us are saving for private pensions. Latest statistics suggest that half of 25-34 year olds have no pension plan. Thus we can safely predict that in future fewer of us will be able to retire ‘early’ (ie before state pension age). The decline of final salary pension schemes will, Chiumento believes, restrict the option of retiring early to a declining percentage of the workforce.

Despite the realities of the situation, research published in 2010 by the Chartered Management Institute (CMI) and Chartered Institute of Personnel and Development (CIPD) suggests that 86% of organisations are not ready to deal with the demographic changes ahead. By contrast, 93% of organisations want to retain older workers.

In September 2009 Chiumento published a Green Paper entitled “Releasing performance: the new agenda for HR”. In it we introduced the concept of Corporate Prisoners** – employees who stay with an organisation without being fully engaged. Response to the report was phenomenal – with media coverage on and off line around the world. As a result we were invited to make many presentations on the findings in the UK and Europe.

It was during these presentations that a series of key questions from HR professionals began to emerge. These included:-

  • How do employees become Corporate Prisoners?
  • How can we better understand what motivates people to deliver higher performance?
  • What does career management look like in today’s flatter and leaner organisational structures?
  • How can we better predict how people will respond to change?
  • How do we decide how best to invest limited budgets to improve employee engagement?

In subsequent discussions it became clear that one factor was driving the answers to all the questions: motivation. Motivation is the force that energises people to perform. Without motivation even the most capable employees can fail to deliver their true potential.

Retaining older workers is, Chiumento believes, just one dimension in solving the demographic challenges ahead. Organisations will want people who don’t just stay but also who perform. Multiplying the number of Corporate Prisoners who are staying for the wrong reasons (eg because they can’t afford to retire – what we call Economic Prisoners) could damage productivity and competitiveness.

Last summer we therefore decided to take a closer look at what motivates the UK workforce – with the aim of providing HR professionals with valuable insights into areas including engagement and career management. The survey split the respondents into three distinct age groups 18-34, 35-54 and 55 and over. What emerged very quickly was that most workers aged 55+ (around 80%) have no intention of ever changing employer. Further investigation also revealed marked differences in how this group views the world of work generally. We therefore decided that the 18-54 and 55+ groups merited separate studies.

In January 2011 we published our findings on the results of the 18-54 age group in a Green Paper entitled Welcome to the career carousel. This report resulted in the “Chiumento Career Motivation Model” – which places workers in one of five primary motivation types.

Type Brief Description

Materialists: Materialists are motivated primarily by pay, benefits and status. They are particularly drawn to the private sector (the only type to show major sector bias). They are the most likely to be considering leaving and also most likely to give their existing employer a poor satisfaction score.

Protectionists: Protectionists desire predictability and stability in their working lives. They crave job security, well defined jobs and work-life balance.

True believers:True believers are attracted to what an organisation does and crave working for either a high profile brand or a cause that links with their personal values. They will accept lower pay to get into the right organisation.

Achievers: Achievers need stretching targets and the opportunity for personal development. They want to be the best they can – and generally have a high level of confidence in their own ability.

Socialisers: For socialisers the key factors are the social dimensions of work – they need to be part of a teamand have amuch higher need to see colleagues as friends. They express the highest levels of loyalty – whichmay be to their immediate teamrather than to the organisation as a whole.