Original Essay


Assignment title: An examination of key human capital issue (the aging workforce) in organizations today.

Overall aim: Research and analyze a current issue of the aging workforce relating to the management of
human capital in organizations.


Evaluate important elements of the issue in relations to the following HR practices:
1. planning
2. recruitment
3. selection
4. performance appraisal
5. compensation
6. benefits
7. the exit of human capital

Judge the strengths and weaknesses associated with the evolution of HR philosophies and theories.

1. Research on the importance of the aging workforce for organizations today.
2. Identification of the most pressing challenges that confront the HR Triad: HR managers, other Line Managers and Employees.
3. Critical evaluation of the impact on human capital practices in organizations.

Minimum of five (5!) academic and business references (PEER-REVIEWED journal articles, academic and business journals, reliable internet sources, books).


An examination of key human capital issue the aging workforce in organizations today

Name of Student:

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Introduction. 2

Importance of the aging workforce for organizations today. 2

The most pressing challenges that confront the HR triad: HR managers, other line managers and employees. 3

A critical evaluation of the impact on human capital practices in organizations. 4

Conclusion. 5

References. 6



Many organizations of today are confronted with the issue of an aging workforce. This issue affects not just productivity but also the management of human capital in organizations. Organizations find it difficult to move on once old, highly experienced employees have exited the workplace. At the same time, they are confronted with the urgent need to plan for this eventuality by facilitating the transfer of crucial knowledge, skills, and competencies to younger employees. The aim of this paper is discuss the importance of the aging workforce for organizations as well as the challenges confronting HR managers in relation to the aging workforce. The paper also provides a critical evaluation of the impact of the aging workforce on human capital practices in organizations.

Importance of the aging workforce for organizations today

Older employees possess invaluable knowledge, skills, and experience. Unfortunately, the aging workforce is conventionally viewed as a problem to be solved rather than a source of unique opportunities for the organization (Goldberg, 2000). If properly used, the skills and experience that older workers possess can easily be leveraged to create competitive advantages for the organization. However, to be able to leverage the opportunities presented by this workforce, organizations must understand the complexities relating to engagement with older employees within the workplace. Some of these complexities include failing health, lack of dexterity, and unwillingness to embrace technological advancements. Additionally, older employees are likely to oppose efforts to introduce changes in organizational culture.

Nevertheless, an aging workforce is beneficial because it enables the organization to deal with the problem of knowledge drain (Goldberg, 2000). The departure of older employees can pose serious knowledge vulnerabilities to any organization. Apart from their wealth of experience, older employees are also beneficial in the sense that they are in a better position to understand and appreciate the strategic direction that the organization has been pursuing since its establishment.

In pharmaceutical and technology industries, older employees tend to be highly valued because of the wealth of experience they possess particularly in the area of new product development. Companies operating in these industries tend to suffer huge losses following the retirement of experienced managers, engineers, and technicians. Such companies may in some cases be compelled to abandon any product development projects that they were undertaking prior to the retirement of their highly valued employees.

In most organizations, human resource managers tend to put in place structures and systems for facilitating the transfer of knowledge, skills, and experience from the aging workforce to younger workers (McGuire, Todnem & Hutchings, 2007). In many cases, such efforts are being made informally through on-the-job training and mentoring. During this process, the aging employees use their reputation and experience to equip younger employees with critical resources such as connections and networks. Organizations that put in place the best strategies for harnessing the advantages created by older workers are unlikely to suffer a serious challenge of knowledge vulnerability once the aging workforce finally exits the workplace.

The most pressing challenges that confront the HR triad: HR managers, other line managers and employees

HR managers, line managers, and employees are generally likely to be very worried about the impending retirement of the organization’s aging employees. In most cases, these employees represent a formidable pillar upon which the organization was founded. Their employment history tends to be intertwined with that of the organization. Owing to their rich heritage, most organizations are likely to experience serious operational shortcomings once older employees finally retire. At this point, one of the biggest challenges is the impending transition from the management principles and philosophers of older employees to those of the younger generation.

To ensure that the challenges of transition do not cripple the operations of an organization, elaborate planning is required. Unfortunately, it is not easy to plan for the retirement of older workers especially in countries such as the United States where the entire workforce is aging (Goldberg, 2000). According to Ashworth (2006), this workforce poses a serious threat to the productivity of companies in the US as well as other parts of the world. This is because workforce aging causes high turnover levels that lead to the loss of knowledge that is critical to the day-to-day operations of an organization.

Other major challenges that arise from an aging workforce relate to performance appraisal, compensation, retirement benefits, and the exit of human capital. HR managers are compelled to change their performance appraisal mechanisms to incorporate the unique circumstances in which older employees have to undertake their duties (McMahan & Sturz, 2006). For example, older people may be technophobic but this is not to say that they cannot make up for this weakness by sharing their wealth of knowledge and experience with younger employees. The performance appraisal mechanisms used should be changed to help bring about the unique capabilities of aging employees.

A critical evaluation of the impact on human capital practices in organizations

As the workforce continues to age, organizations are increasingly being compelled to introduce radical changes to their human capital practices. For example, many HR managers have been compelled to introduce an “entitlement-based” culture as opposed to a “performance-based” culture in their organizations (Hedge, 2008). They realize that the contributions that older employees make to an organization in terms of knowledge transfer and motivation cannot be quantified using conventional performance metrics. Therefore, they introduce a policy that entitles all senior employees to certain privileges in terms of performance assessment, compensation, benefits, and promotion.

According to Hedge (2008), changes in human capital practices should be seen as an integral part of an evolution process that also characterizes current HR philosophies and theories. In these theories and philosophies, focus is on a strategic challenge of offering new, highly attractive opportunities that will easily capture the desire of the aging workforce to continue with their contribution to organizational in meaningful ways (Hedge, 2008; Claes & Heymans, 2008).


In conclusion, organizations must plan for ways of engaging the aging workforce in the transfer of skills, competencies, and knowledge to younger employees. Traditional performance appraisal mechanisms cannot work in respect to the process of evaluating the contribution of older employees. This essentially is a crucial indication that today’s organizations must change their existing human capital practices. The rationale for such changes should be highlighted in current research on the evolution of HR philosophies and theories.



Ashworth, M (2006). Preserving knowledge legacies: workforce aging, turnover and human resource issues in the US electric power industry. The International Journal of Human Resource Management, 17(9), 1659-1688.

Claes, R & Heymans, M. (2008). HR professionals’ views on work motivation and retention of older workers: A focus group study. Career Development International, 13(2), 95 – 111.

Goldberg, B. (2000). Age works: What corporate America must do to survive the graying of the workforce. New York, NY: Palgrave-MacMillan.

Hedge, J. (2008). Strategic Human Resource Management and the Older Worker. Journal of Workplace Behavioral Health, 23(1), 109-123.

McGuire, D. Todnem, R. & Hutchings, K. (2007). Towards a model of human resource solutions for achieving intergenerational interaction in organizations. Journal of European Industrial Training, 31(8), 592 – 608.

McMahan, S. & Sturz, D. (2006). Implications for an Aging Workforce. Journal of Education for Business, 82(1), 50-55.

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