The macroeconomic impact of age discrimination, especially when combined with an ageing population is significant. But what of the microeconomic impact on individual organisations, and more importantly, if combating age discrimination was viewed as an asset rather than a cost, would those organisations drive change faster?
Treating age diversity as an asset would, in essence, leverage the varied experiences, perspectives, and skills of employees from different age groups to enhance organisational performance, innovation, and resilience. When organisations actively cultivate and manage an inter-generational workforce, they can create a competitive advantage.
Easiest to imagine are the benefits that come from a more engaged and productive workforce.
A culture that values age diversity can enhance employee engagement and satisfaction and as employees feel respected and valued for their unique contributions, regardless of their age, they are likely to exhibit higher morale as well as both lower absenteeism and turnover. By accommodating the needs and aspirations of employees at different stages of life, organisations can retain top talent longer, reducing recruitment and training costs.
Equally, organisations that actively promote age diversity and inclusion are seen as progressive and socially responsible. This enhances their reputation with customers, investors, and the wider community. An organisation known for valuing and leveraging age diversity is more attractive to job seekers of all ages, all of whom, are looking for inclusive, supportive, and dynamic workplaces.
In addition, embracing age diversity helps organisations avoid legal risks related to age discrimination as by promoting a fair and inclusive environment, companies ensure they are compliant with age discrimination laws.
Through an external lens, age-diverse teams bring together a variety of perspectives, which can lead to more creative and well-rounded communication solutions. And having employees from different age groups leads to more balanced decision-making, enabling employees to relate to and understand the needs and preferences of diverse customer age groups.
Employees from different generations may also have different approaches to innovation and arguably an inter-generational blend can fuel innovation and therefore growth.
So, if age diversity should be treated as a business asset, how do we measure it and moreover, how do we monetise it?
Monetising age inclusivity and indeed diversity, equity, and inclusion in general terms, needs to focus on translating initiatives into measurable financial benefits. This can be achieved by leveraging age diversity programs to improve organisational performance, attract diverse customers, and/or enhance brand value.
One of the most obvious areas to measure remains attracting and retaining top midcareer talent. Monetisation is relatively simple, through reduced employee turnover, lower hiring costs and reduced time to hire. Inclusive environments also increase employee engagement and productivity and reduce absenteeism.
Investors increasingly prioritise Environmental, Social, and Governance (ESG) factors, and DEI is a key component of the ‘social’ component. Organisations with strong DEI credentials may attract more ESG-focused investment. By demonstrating a commitment to DEI, companies can appeal to institutional investors and socially responsible investment funds, potentially increasing total shareholder return and therefore, valuation.
Strong policies and practices around age discrimination also reduce the risk of costly lawsuits and regulatory fines. They also protect an organisation’s reputation from being tarnished by issues related to bias or exclusion and fewer legal liabilities and compliance costs result in direct financial savings. In Australia, either the Fair Work Commission or the Courts can order employee reinstatement or compensation in the example of a proven case of age discrimination against a current or former employee.
Although the Act is over 20 years old, legal action under the Age Discrimination Act 2004 is still evolving, as more individuals are beginning to challenge discriminatory practices, especially in employment. Notably Qantas lost a 2021 case of unfair dismissal and just this year a 70-year-old man was awarded $29,000 after being overlooked for a promotion based solely on his age.
Harder to measure but arguably more valuable are diverse, intergenerational innovation teams. By fostering inclusion, organisations can unlock the full creative potential of their workforce, potentially leading to new products, services, or business models.
Finally, local, state and federal governments as well as some enterprise corporations have initiatives or incentives for organisations that demonstrate strong DEI practices, such as grants, tax credits, subsidies, or access to government contracts. These incentives can lead to direct financial benefits, reduce operational costs, or create access to larger contracts that can drive growth.
Fundamentally though, valuing age diversity as an asset means recognising that a workforce composed of multiple generations can drive innovation, enhance customer relations, and build resilience. By embracing and leveraging the unique strengths of employees of all ages, organisations can create a more dynamic, inclusive, and competitive environment that benefits everyone involved.