It is also useful for organisations that believe their labour flow dynamics are changing the age composition of their workforce.
Description
Distribution of headcount by age at the end of reporting period.
Formula
End of period headcount. [Age] / End of period headcount * 100
Interpretation
Age Staffing Breakdown indicates the percentages of the workforce that fall within various age groupings. Graphically, the data are presented as a percentage of the total workforce, i.e. a stacked bar graph.
Organisations are generally interested in the age profile of their workforces for three significant reasons. First, employee preferences and behaviours tend to vary with age. For example, the benefits desired by 25-year-old employees are likely to differ from those valued by 45-year-olds.
The reasons that employees enter and leave an organisation are also likely to differ across age groups. Given these variances, it is important for an organisation to understand how its employment offer appeals to employees at various ages and what behaviours are likely from various age groups.
Second, experience levels are likely to vary with age, either industry-specific experience or professional working experience. While age is certainly not a predictor of performance, the experience levels of various age groups may necessitate different development strategies.
Employers with very young workforces may focus development on basic professional skills or basic managerial development, while those with more experienced workforces may focus development energies on emerging technologies, high-level managerial skills or other areas.
Recruiting practices are also likely to differ based on the age profile of existing employees and new hires, helping to determine whether recruiting efforts are focused on university recruiting programs, industry networking, etc.
Third, organisations must understand their age profiles to gauge potential exposure to retirement costs and knowledge drain from employees nearing retirement age.
Australia faces a future labour shortage created by the impending retirement of the baby boomer population. Organisations must understand their potential for loss of knowledge and experience through a baby boomer retirement wave and plan in advance for the back-filling of those retirements.
Age Staffing Breakdown, while somewhat more complex than the other measures related to age, provides the most detailed view of age across the organisation by indicating the relative percentage of all age groups in the workforce.
Data Sourcing
Organisations typically calculate age of employees based on their date of birth, as captured in a personal data table in an HRIS.
Analysis
Employers may find it useful to analyse Age Staffing Breakdown by various organisational groups and units to understand differing employee preferences among those groups and to understand any potential retiree knowledge loss issues in key areas. Dimensions for such analysis may include organisational unit, occupation, job function, location, job family, managerial level and employment level.
Limitations
Age Staffing Breakdown does not indicate the age profile of those leaving and entering the organisation; it indicates only the resulting age composition of the workforce.
The measure does not provide information about the cost of past or future retirements to the organisation, and it does not directly indicate the skill, knowledge or tenure levels of employees in various age groups.
Any interventions designed to address an organisation’s age profile must not have a discriminatory impact on protected age groups.
Targets
As this measure is a breakdown measure, any targets would need to be set for the individual components of the breakdown. Generally, many organisations desire to target a relatively even age distribution that is not very heavily weighted toward any one age group.
However, targets must be set with care to avoid creating any discriminatory impact on protected age classes.