Analyzing the Effectiveness of Contemporary Aging Workforce Management:: The Case of Daimler AG

Abstract

1 The company has been called Daimler AG since the sale of Chrysler in 2007. T he increase in the average age of many developed countries’ populations, evident for many decades, is regarded as a demographic change that will affect societies and organizations alike in the near future. In industrialized countries, stagnating or shrinking fertility rates and a simultaneously growing proportion of citizens approaching retirement age are a potential threat to the sustainability of highly developedwelfare and pension fund systems. Business organizations are facing similar challenges. The demographic change in society is mirrored by the available labor force’s demographic composition. Companies located in countries undergoing such a development have experienced an increase in the average age of their employedworkforce and the labor pool. In many incumbent organizations in Europe and the U.S., the averageworker is already in his or her 40s. A large group of people – the post-Second World War ‘‘baby-boom generation’’ – is rapidly moving towards retirement age. In Germany, for example, the aging organization is nurtured by many companies refraining from hiring new people due to improved production methods and the legal scheme that allows companies to offer workers a government-subsidized early retirement, which expires at the end of 2009. The effect of increasing average age on organizations has many facets: High-tech businesses are concerned with how a growing number of older employees, who will potentially retire soon, will affect their innovativeness, due to the assumed loss of valuable knowledge; companies that require strenuous physical work are worried about their workers’ health and physical performance. In both cases, the organizations are concerned with the potential loss of important knowledge when large cohorts of employees retire. In this article, we focus our attention on the Mercedes-Benz plant in Bremen, which adopted a strong focus on the physical dimension of aging. Although the potential loss of knowledge and innovativeness is not ignored, the Bremen plant is a production facility, with the majority of its workforce working on production lines. Consequently, the company’s main concern regarding its aging employees is the question of how older workers will cope with the physical tasks required of them. We specifically address the five health and human resource measures used at the Bremen plant to manage the aging workforce. Based on a triangulation of the available data, especially more than 30 interviews, we discuss these tools with regard to their impact on age-related challenges, such as health, absenteeism, and the integration of a constrained workforce.