Take, for instance South Korea, the host country of the recent G20 Economic Summit. Its ascension into the economic elite was fueled by the hard work of more than seven million baby boomers who entered the workforce in the 1980s. That important age group, representing 17% of the entire population, has just begun to retire, and most could be out of the workforce in less than a decade. The results could be a mass brain drain, wage inflation in skilled positions, and thinning of pensions.
The obvious solution to an aging labor pool is keeping and training workers to be around longer. In the Japanese and Korean private sectors, however, progress on that front has been slow — with management and labor united in pushing the status quo. Many companies still use seniority-based pay systems and fear that such a move will only lead to higher wage costs. Likewise, unions also do not want to rock the boat if it means having to go to merit-based wages for everyone.
Moreover, face-conscious Asian companies, especially in the service industry, want to present a corporate persona that is dynamic, vibrant, and global — in other words, young. It also doesn't help that youth unemployment, always a sensitive political issue, is high. Many current-day considerations work against hiring more or keeping older workers.
This myopia ignores a sobering reality that shows many Asian countries having the lowest birth rates in the world and the older population (60 and over) already outnumbering younger people (15 and under). Further, importing replacements of outgoing personnel is less of an option in Asian countries that have tight immigration policies. With fewer talent resources to draw from, the need to welcome back the "boomerangs" (returning boomers) may come sooner than we think.
While the task of addressing the graying workforce in Asia will be a vast societal undertaking carried out over a long period of time, companies can help ease the transition by adopting steps, including the following:
- Accept the "new-old" normal in Asian HR. Companies need to jump over the psychological hurdle to acknowledge that the population is aging quickly and that it has HR consequences. In addition, companies should spread the mindset that the graying population can be repositioned to help solve the related labor problems.
- Deconstruct corporate working norms. Asia takes pride in its Confucian tradition, but in companies, it just gets in the way of hiring and managing older workers. The dogma that the old are wiser and have to be respected ends up hurting this segment because it reduces their flexibility. Respect is fine but it should flow both ways between the young and old. Another norm common in countries like Japan and Korea is emphasizing long hours of onsite work. If the added workers can contribute online while offsite, the lack of in-person contact could lessen the cultural discomfort of younger bosses working with older employees.
- Promote older workers' flexibility. The biggest knock against the older workers is their low flexibility which is much worse in Asia . To overcome that stigma, these workers must show that they are able to cope with new working terms and conditions. The playbook for improving flexibility is well established in the West, but it needs to be championed more in Asia by influential companies such as POSCO or Kawasaki Heavy Industries.
- Use global companies as change agents. Global companies operating in Asia can play a positive role in shaping and framing new personnel practices. This is one area where global businesses do not have to be so politically correct in adapting to their host country's local culture. They can show that age (or gender) should not matter — that anyone, when capable, can rise to top positions, and if still capable, can stay there.
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