FACULTY OF BUSINESS ECONOMICS AND POLICY STUDIES
UNIVERSITI BRUNEI DARUSSALAM

BB-5112
Human Resource Management

Global Ageing Crisis- The Challenges in an Organisation

Prepared by:
Jacelyn Lee Sze Wei 11M0009
Hj Shril Hj Matsawali 11M0030
Mohd Samardi Samat 12M1432
Siti Afshah Abu Bakar 12M1417
Yvonne Yeo Chui Ping 11M0032

With Due Respect We the Group Members Submit

This Case Study Assignment to Our Lecturer

Dr Zahidul Islam

Date of submission: 14th March 2013

Introduction:

Trends in Human Resource Management (HRM) are changing. One of the factors that concern the HRM area is the workforce demographics. In 1980s, baby boomers enter the workforce and started to operate in the job market. This boosts influence not only the organization, but also a country’s economy. Today, most countries in the world are facing population ageing due to the fact that now those baby boomers are approaching their golden age. In Wikipedia, population ageing is defined as a phenomenon that occurs when the median age of a country or region rises due to rising life expectancy and/or declining of birth rates. These occurs because of several factors such as reduction in the mortality and fertility rates, increased in life expectancy, migration of foreigners to a country and most of the time because demographically the population shifted towards aged population. This phenomenon will not only bring major implications to the social, economy and financial but also affect the HR function in a country(in general) and in an organisation (in specific).

Global Ageing:

Global Ageing has created some anxiety and concern to some countries and below states some of the proclamation picked as follows:

China – “…In 2010, there were 110 million people 65 and above in China; by 2030, the number will increase by more than 100 million, according to the United Nations. By 2050, more than a quarter of the population will be over 65…” (CNBC, Oct 2012)

Japan – “… Japan's overall population fell by a record quarter-million to 127.8 million last year, and by 2060, the population is expected to fall by an additional one-third to as few as 87 million. And 40 per cent of those remaining will be over 65 years old…” (Aljazeera, Nov 2012)

ARTICLE 4:
“…A recent UN report showed those aged 60 or over will account for 39 per cent of the South’s population by 2050, up from 17 per cent last year, while the size of its youth population will be halved by 2060.…”
(Sources: Workaholic culture under scrutiny, Borneo Bulletin, Thursday, 14 February 2013)

ARTICLE 2:
“…The number of young workers had plunged from 55 per cent in 1991 to nearly 21 per cent of the total labour force in 2010……And the number of older workers rose to 20 per cent of total labourers in 2010 from 12 per cent 20 years ago..”
(Sources: Ageing workforce hits industrial-sector productivity, The Nation, Tuesday, 21 May 2012 http://www.nationmultimedia.com/business/Ageing-workforce-hits-industrial-sector-productivi-30182422.html

[pic]
The graph in Fig. 1 shows the trends for the ratio of population over 65 to total population is increasing towards 2030.

Reality of Ageing in Brunei
Although globally, countries are facing the challenge in the ageing of the workforce, Brunei is yet to face this situation and its implications. However, the trends can be seen to go towards the same issue as Brunei has experience the decrease in its population growth rate. In fact, Brunei’s annual population growth rate has decreased to 1.7 per cent in 2011, down from 2.5 per cent in 2001…” (Brunei Times, April 2012).
Furthermore, although Brunei as a nation has not sense the impact, but some organisation has perceive the issue beforehand. For BSP, they had forecasted that “..In 10 years time, over 1,000 or 45 per cent of BSP's local staff are due to retire, which in turn will create a massive brain drain at the company and affect all functions across the business…” (Brunei Times, Dec 2007)

[pic]
It is important to also reflect this issue in Brunei perspective because of changing trends in the country. Some of the trend which may lead to Brunei to experience the same issue is the fact that nowadays Bruneian married couple tend to have in average of 4 kids per family where if compare way back 20 years ago during this baby bust generation they tend to have 8 kids in average. The other factors which would contribute is the sense that nowadays it can viewed that Brunei women are career oriented and tend to marry at a later age where back in those days women tend to get married at the age of 20's. Thus base on these two factors Brunei will eventually experience aging population.

Ageing Workforce – HR Dilemma
As mentioned earlier, the population ageing will bring major impact to various areas including HR, as nation or as organization. The main issue that contribute to HR with respect to demographic shifts is the inadequate supply of labour. With the new trends now, it is actually difficult for HR to employ people due to the competitions with other organization as well as the impact from the baby boomers. But in this coming years this baby boomers who was born in 1945-1960 will retire and the baby bust generation who was born between 1960-1980 will attempt to replace them but will not be able to completely since they are only a few.

However, this will also lead to other HR related issue such as high labour cost and turnover (due to great competition to acquire the available labour in the market), depleted pool talent (brain drain), problem of minimizing gap.

Recommendation
Changing role of HRM Company expects HR functions to be more strategic
Strategic Human Resource Management - Formulating and executing HR policies and practices that produce the employee competencies and behaviours that company needs to achieve its strategic aims -
Development and implementation (not limited to) the following strategies:

Recruitment Strategy ✓ Attracting mature workers in the market by offering opportunities to acquire new skills ✓ Attractive compensation and remunerations ✓ Find advertising channels and an image that appeal to mature workers;

Retention Strategy ✓ Offering flexible work arrangements ✓ Offering part-time positions to attract older workers

Talent Strategy (including Succession Planning) ✓ Hiring retired employees as consultant or temporary workers ✓ Mentoring & Coaching

Recommendation
Thus, HR needs to develop new / review existing policies and practices TO ENSURE COMPANY ACHIEVE ITS STRATEGIC AIMS regardless of the AGEING WORKFORCE
The need to develop / review policies and practices in terms of:

[pic]

(Sources: China's Aging Population Threatens Its Manufacturing Might, CNBC Wednesday, 24 Oct 2012http://www.cnbc.com/id/49498720/China039s_Aging_Population_Threatens_Its_Manufacturing_Might)
(Sources: Ageing Japan - How can the worlds most elderly society overcome its demo crisis?, Aljazeera, Friday, 09 Nov 2012 http://www.aljazeera.com/programmes/101east/2012/11/2012115114958294318.html)
ARTICLES :
“…Brunei's annual population growth rate (Sources: Let’s talk about population growth, Brunei Times, Sunday, 29 April 2012)
(Sources: Oil industry faces task of replacing ageing skilled staff, Brunei Times, Tuesday, 18 December 2007)