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September 18, 2021

Klöckner & Co: Embracing Change and Investing in the 50+ Employee

As the conversation about age diversity and age inclusion in the workplace continues, Klöckner & Co is making a conscious effort to invest in its mature employees. Headquartered in Germany, Klöckner & Co is one of the largest producer-independent distributors of steel and metal products and one of the leading steel service center companies. 

Steel distribution is a very traditional industry, but Klöckner & Co has established itself as a pioneer in many ways. On the technology side, the company is on a mission to digitize and automate its distribution supply chain and become the leading digital platform for materials, equipment, and processing services in both Europe and the Americas. 

At the same time, Klöckner & Co is investing in its people. Not only is the company committed to gender equality and has increased the percentage of women in leadership positions from 8% to 16%, but it is focused on meeting the needs of its mature employees.

During a recent interview with WiseForce Advisors, Klöckner & Co’s Head of Group Human Resources Angelika Kambeck explained why Klöckner & Co’s 50+ employees were getting special attention.

The Impact of Changing Demographics

Europe’s aging population raises challenges for businesses and policymakers. In Germany, the population is steadily aging. The median age of Germans was 45.9 in 2015. By 2020, it was 46.2, and by 2050, it is projected to reach 49.2.

In 2019, it was expected German workers over the age of 60 would outnumber those under the age of 30. However, the entry of 1.5 million migrants that year helped to inject some youth into the workforce. Also, in 2019, credit rating agency Moody’s said if Germany ever lost its triple-A credit rating, it would probably be due to the effects of demographic change on the economy and social security system. 

Germany is likely to face a shortage of three million skilled workers by 2030, and experts say the solution could lie with tapping into the longevity economy or what Deloitte calls “the longevity dividend.” Contrary to what many people believe, older employees have lots to offer. Supporting them and increasing their productivity can redound to the benefit of both companies and the larger German economy.

How Companies Should Respond

The reality of these demographic changes is not lost on Kambeck, who says human resources strategies have to be modified to keep up.

“You will have more younger people and more older people, but no middle. So that’s why you have to strategically do something for the aging workforce in your workforce planning,” she says.

“When you do textbook management development, you start with the young people… the emerging leaders, high potentials or whatever you call them in your company. This is important, but you also have to pay attention to older employees. It is becoming more and more important because the demographics are fundamentally shifting,” she says.

Kambeck has observed that older and younger employees sometimes want different things. As a result, she says HR professionals need to cater to both groups in a way they didn’t 20 years ago. In addition to keeping older workers focused and motivated, they have to find ways to utilize their knowledge, facilitate knowledge transfer, and find good successors for when they eventually leave the workforce.

Kambeck says mature employees bring a lot to the table. At Klöckner & Co, they are a fundamental part of the company even though they’re not digital natives.

“They know the product – the steel – and they have experience. They are part of  the Baby Boomer Generation, which is very performance driven,“ she says, noting that people often take these attributes for granted. 

Building an Age-Inclusive Workforce

When managers and business owners think about making their organizations more diverse, a lot of the focus is on gender, race, and ethnicity. However, Kambeck believes age will be an even bigger part of the conversation in the years to come.

“I’m convinced that age will become a core element of the diversity discussion because at the moment no one says it officially, but at 55, your market value might drop a little bit in the general perception, especially in Europe.”

“I’m not sure what it is like in the US, but in Germany, I’m convinced that in the future, this perception will change substantially,” she says.

Adjusting to the New Normal

Kambeck is on the right track. In the OECD’s 2020 publication “Promoting an Age-Inclusive Workforce: Living, Learning and Earning Longer”, it is stated that evidence shows that mature employees can boost the productivity of the companies they work for. Not only do they have their own knowledge and experience to offer, but they can boost the performance of teams.

According to the OECD, workers generally want the same things, regardless of their age. And, when employees need different things because of their age, employers who respond positively reap the rewards. They are more likely to attract, motivate and retain these workers. In response, mature employees put in even more effort and make the organization more efficient.

Employers need to do three things to leverage the aging workforce and take advantage of the new normal.

How to Build an Age-Diverse Workforce

Europe’s aging population presents both challenges and opportunities. To reap the benefits, organizations first need to attract and retain people of all ages. In many cases, this means they need to change their recruitment practices which have long been biased towards younger workers. It also means that the workplace culture needs to change, so every employee feels appreciated whether they are younger or older. 

For Kambeck, age diversity gives an organization more innovative power and fuels transformation. It’s why Klöckner & Co is taking active steps to cater to and benefit from mature workers.

“I thought about the older workforce for a long time, and then Christian Jerusalem from WiseForce came up with the idea of the 55+ catalyst program. We’re currently doing a pilot project across Germany with ten people, and then we would like to roll it out.

Kambeck supports creating teams of people from all generations. 

“Why it is not more common to hire a person who is 60+? Why not put them together with a 25-year-old digital native, or a female leader, an older leader with a youngster, and other digital natives,” she suggests.

Creating a Healthy Work Environment

The second thing that businesses need to work on is ensuring that they offer a positive work environment and contribute to a healthy working life, according to the OECD. Businesses can only be productive if their employees are healthy, skilled, and engaged. 

This means it’s in the company’s best interest to make the workplace an attractive place to be, regardless of the workers’ age. Many workers want the option of flexible work so they can spend time with their families, advance their education or simply do things they enjoy.

For Kambeck, it makes sense to show the older members of the workforce, especially the top performers, that they’re valued and appreciated. She also sees value in helping these workers to determine what the latter stages of their career will look like. Some workers may want to work on a part-time basis only, while others may want to focus solely on one particular project.

“This gives more clarity to this group, and they can use their remaining ten years or five years or however long they will work even better,” she says.

Notably, Klöckner & Co went beyond its internal efforts to sponsor a 2021 Impact of Diversity prize in the category of age inclusion. The winner was industrial engineer and management consultant Dr. Irène Kilubi who founded the Joint Generations initiative aimed at bridging the gap between older and younger generations in the workforce.

Promoting Lifelong Learning and Training

The OECD also recommends that companies develop employees’ skills throughout their careers. As people live and work longer, they will need to keep learning in order to remain relevant. While it is common for HR managers to offer educational opportunities only to people below a certain age, workers of all ages need to be included. By ensuring that the entire workforce is skilled, efficiency, productivity, innovation, and motivation are likely to increase.

Kambeck believes organizations are taking a risk if they don’t invest in mature employees.

“I think one risk is you lose them because they leave and if they don’t leave, they stay, but be able won’t contribute, which is practically the same as leaving,” she says.

What the Head of Group HR means is that even if the individual doesn’t leave the organization, their productivity and engagement will likely decline. This is a phenomenon that we at WiseForce call “the drift.” It’s a pattern we see in many companies where 50+ employees gradually retreat to a passive role in the organization because their values and those of the company no longer align.

Investing in Clarity

Kambeck sees the importance of ensuring that older employees are clear on their role in the company.

“This is why we invest in this catalyst program. We did not yet have a real, big portfolio of measures for an aging workforce. We’ve now started to invest in them strategically with such a development program,” she says, noting that she expects participants to emerge with a clearer picture of how they’ll spend their last few years with the company.

“The clearer you are, the better you are. It’s a chance for them to reflect about their life. How do I want to work in the future? How would I like to use my remaining years? What would I like to achieve? We’ll help them with good coaches and consultants to reflect on that in a structured way. This is one of the first steps we are doing,” she says.

Improve Your Organization with Help from WiseForce Advisors

You too can leverage the changing demographics and embrace and empower mature employees. At WiseForce Advisors, we offer an Age Quotient methodology that’s designed to drive awareness, boost understanding and create opportunities for older people to be a strategic asset. Contact us today at info@wiseforceadvisors.com to schedule a consultation.