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A Critical Success Factor: the average age of your team?

by Andrew White  |  April 11, 2019  |  Comments Off on A Critical Success Factor: the average age of your team?

I was browsing my macroeconomic American Economic Journal (as one does) and I found an interesting article (see Demographic Structure and Macroeconomic Trends, by Yunis Aksoy, Henrique S Basso, Ron P Smith and Tobias Grasl) that explores the impact of demographics on economic performance. It turns out that while there are some relative obvious truisms about an aging population, there is not much research to back them up. One chief reason is that demographic changes generally take place over very long cycles or periods of time, so their impact is hard to determine. Especially since so many other things change over both the short and long term.

Despite these challenges the authors of the paper find some insight in data that suggests an aging population in advanced economies have generated lower growth, through reduced demand (different buying habits and lower spend overall), along with reduced supply (more preference for R&R; perhaps more medical challenges?) and capability. More interesting for me was the point that these same aging populations led to less innovation!  As I am closer to my golden years than my son’s, this is both troubling and concerning from a selfish point of view. Am I really close to being ‘over the hill’?

There are some other highly visible situations that support the fact-base behind the research. Japan has very clearly experienced (and continues to experience) one of the early demographic time-bombs of an aging population. Japan has been in a go-slow, low inflation, low interest rate economic funk for years (see The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession). We know that Europe and the US has their own variant. So the high level observations seem to lean in the same direction as the author’s research. But what about us, what about firms?

Is what is good for the economy good for our organization? Is what is bad for the economy bad for our teams? Should we seek to ensure a balance in the age of our staff? Should we actively hire folks into our teams so that they are younger than our competitors’ team, to give ourselves the best chance for more innovation and greater growth?

Theoretically this maybe true, but what does that do for our diversity goals? In fact, what might appear as good business practice might fly in the face of public regulation that seeks to neuter bias in such hiring practices.  Some strenuous physical work may favor those more physically fit, and presumably younger, and so this might infer an age difference in the worker profile. But is cognitive capability consistently lower in the silver headed workforce? I seem to remember numerous papers that suggest this is the case but with as many arguments why it is not the case.

So I wonder if, after monitoring and reporting profits and losses we should track average age of the workforce, as a leading indicator for possible future performance. It might be an interesting thing to explore. Another might be the role that information, and technology, plays in providing a more equal playing field for the oldies as they compete with the youngsters. This oldy, your blogger, tries to keep up. But I must admit that sometimes I do prefer an early night and some extra shut-eye. I guess the writing is on the wall, or should I say hill.


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Category: competitive-advantage  

Andrew White
Research VP
8 years at Gartner
22 years IT industry

Andrew White is a Distinguished Analyst and VP. His roles include Chief of Research and Content Lead for Data and Analytics. His main research focus is data and analytics strategy, platforms, and governance. Read Full Bio

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