The Twin Trends of Aging and Automation – GC Capital Ideas

The twin trends of rapid population aging and automation have been unprecedented in speed and scope. Both academia and industry have dedicated extensive research to understanding the direction, magnitude, variations, and impacts of these separate trends.

In the first report of this two-part series, Marsh & McLennan Advantage Insights, in collaboration with Mercer and Oliver Wyman (each an affiliate of Guy Carpenter), contributed to this literature by focusing on how automation affects workers above the age of 50 across 15 major markets in the Americas, Europe, and Asia-Pacific. The report showed that older workers are at moderate-to high risk of being displaced by automation, with those in advanced and emerging markets in Asia at highest risk.

There is broad consensus in the literature that older workers not only experience major difficulties in the labor market, but also face severe fallout from displacement due to automation. Displacement leads to a more precarious financial situation, as well as adverse health effects both physically and sociopsychologically. These are serious issues that have commanded increasing attention from governments through research and public policy but governmental efforts alone, unfortunately, will not be enough. The call has been growing for companies to be part of the solution and help ensure adequate social protection and well-being for older workers. This now constitutes a critical part of the discourse on healthcare and inequality in many countries.

At the same time, many companies now also find themselves under pressure to remain competitive by undergoing digital transformation. This focus on the technological side of organizational transformation has led many organizations to overlook the plight of older workers, regarding the problem as NIMBY (Not In My Backyard), until they realize that they themselves are increasingly relying on an aging workforce. In turn, companies will also increasingly face other macro problems associated with population aging, such as talent shortages and loss of institutional knowledge, heightening the need to keep older workers productive for longer.

In this paper, the contributors propose potential solutions to these challenges. They first re-conceptualize the perception of older workers through unpacking their values as experienced workers those above the age of 50 whose tenure within organizations and industries has provided them with a wealth of experience and knowledge that companies can leverage to enhance competitiveness. This term will be used throughout the paper. The report takes a corporate perspective to the intersection of aging and automation to argue that companies must seriously challenge current dominant narrative of older workers and seek to build more age-inclusive organizations. The question is, how do new technologies feature in this new vision?

Proposed answers to this question have focused on technological potentials how technology can be applied and deployed to aid older workers. To complement this, we propose that companies approach the question from a workforce perspective to cultivate and leverage a tech-empowered experienced workforce: Many companies have underestimated experienced workers capacity to contribute, as well as the potential synergies between technology and an experienced workforce, and would benefit greatly by directing their energy to foster this synergy. The strategy proposed here can serve as a blueprint for these areas of synergy, thereby laying the foundation for wider initiatives to bolster organizational resilience to fast-paced technological changes as a whole.

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The Twin Trends of Aging and Automation - GC Capital Ideas