Positive effects of ageing and age diversity in innovative companies – large‐scale empirical evidence on company productivity

Abstract

This article investigates how age diversity within a company's workforce affects company productivity. It introduces a theoretical framework that helps integrate results from a broad disciplinary spectrum of ageing and diversity research to derive empirically testable hypotheses on the effects of age diversity on company productivity. It argues that first the balance between costs and benefits of diversity determines the effect of age diversity on company productivity, and that second the type of task performed acts as a moderator. To test these hypotheses, it uses a large-scale employer-employee panel data set. Results show that increasing age diversity has a positive effect on company productivity if and only if a company engages in creative rather than routine tasks.

Human Resource Approaches to Retirement: Gatekeeping, Improvising, Orchestrating, and Partnering

“…HR managers in partnering provide perhaps the best example of continuous career‐related conversations and interactions between all actors involved, which represents one avenue for joint implementation and crafting of retirement patterns. This further confirms that involvement of mature workers in creating solutions that can be mutually beneficial can lead to innovation and improve productivity (Backes‐Gellner & Veen, ).…”

Population Aging, Marginal Propensity to Consume, and Economic Growth

“…For example, Backes-Gellner and Veen (2013) reported that diversity of labor force would affect companies' productivity and offered two hypotheses: firstly, the balance point of cost and benefit of diversity would determine the effect of diversity of labor on companies; secondly, the type of company mission played the role of arbiter. They drew the conclusion that the diversity of age had positive effect on a company if and only if it is engaged in creative tasks rather than regular tasks.…”

The European Union's aging population: Challenges for human resource management

“…Younger cohorts, for example, may have higher formal academic skills but may be socially inexperienced; whereas older cohorts may have lower formal academic skills but more work experience or social skills (Paullin, ; Reade, ). In their study of company productivity, Backes‐Gellner and Veen () suggest age diversity has positive productivity effects for companies especially in more innovative industries. In these industries, the ideal mix involves a combination of old and young employees, as opposed to only the young.…”

“…A more age‐diverse workforce provides a larger knowledge pool that can offer more creative solutions. Thus, the anticipated demographic changes in most industrialized economies should be seen not only as a threat to companies but also as a potential opportunity (Backes‐Gellner & Veen, ).…”