Aging is one of the ultimate facts of life. Everyone ages, but not all companies leverage the opportunities and potential that workers over a certain age offer them.
Across advanced countries, including the United States and Japan, the number of people reaching retirement age is rapidly increasing. Globally, Japan has the highest percentage of people ages 60+ and one of the highest life expectancy rates in the world. Although aging is often viewed as a cause for concern, I believe it presents a great opportunity for the world of business and work. Japan is often cited as an example of a country that can show the path ahead for other countries in this regard.
As the CEO of Mitsubishi Heavy Industries Group (MHI), one of the world’s leading industrial firms, I count as among my most pressing concerns the impending skills gap that employers will face in the coming years. As increasing numbers of workers reach retirement age, many companies will face a loss of skills and experience. This gap is particularly alarming in the manufacturing sector: a recent study suggests that in the next 10 years, some 2 million US manufacturing jobs will be left unfilled due to a lack of skilled candidates. Japan faces similar shortages. MHI is a significant player in the US manufacturing market. We have $7.5 billion in annual revenues and 7,300 employees across 30 states, making the United States our single largest market outside Japan. Given MHI’s strong presence in Japan and the United States, worker shortage is certainly an issue we must address promptly.
Right now, we are rapidly expanding the scale of our global business and as we do, we anticipate tackling large-scale engineering projects around the world that pose complex challenges and demand increasing levels of expertise. Naturally, we need to ensure the availability of the necessary skills and expertise to undertake such projects in future. In particular, we see an urgent need for people with experience in such fields as project planning and risk management.
As a solution, MHI is working to build on the vast experience and expertise that senior workers and retirees can provide. Expertise is the future of our company, and leveraging older skilled workers is good for both business and society.
To this end, MHI has established MHI Executive Experts, a new company specifically for workers who are at or above retirement age. It was launched in July 2016 with an initial base of 300 employees, which we hope will grow in the coming years. The new company recruits various veteran MHI employees, including engineers, managers, and executives. It then dispatches these specialists to provide support and advice on our current projects and businesses.
MHI Executive Experts is still in its initial stages. We are presently arranging for older workers to leverage their expertise for engineering, procurement, and construction project management. This is a major part of our business, as it ranges from the construction of power plants to the building of transportation systems. In the future we plan to expand the scope of MHI Executive Experts’ activities to include the sales, legal, and ICT fields. Our senior experts will provide a wide variety of different services—from consultation to monitoring, training, and development.
Much of our work is not about mass manufacturing but rather the production of a single large-scale product. Whether we are delivering turbines or commercial ships, our products require high levels of expertise and craftsmanship. Managing the delivery of such large-scale products is no easy feat; it requires people who have considerable experience and a proven track record.
In particular, it is notoriously difficult to train people for project leadership roles, where one person must oversee every step of a venture, from purchasing the necessary parts to ensuring the product is delivered on time. When people without this experience are asked to take on such leadership roles, it can increase the risks for the project and put unfair pressure on those team members with less experience. By providing a competent pair of hands, our senior experts can significantly reduce risk and strengthen our management structure.
MHI’s older experts not only provide much needed expertise and know-how, they also give on-the-job training and guidance to newer recruits, helping foster the next generation of specialists. In this way, essential manufacturing skills and craftsmanship can be retained, bringing vitality to the future of manufacturing.
In attempting to utilize the skills and expertise of senior employees we are keen to avoid a “one-size-fits-all” approach, we also seek to ensure that people are able to choose their level of involvement. For this reason we have established a structure that allows for both full- and part-time work, as well as provisions for those who are unable to work on a full-time basis or move to different locations.
Participants can also be selective about the nature of the work they do, with options ranging from training younger workers to more proactive project management and coordination on both large- and small-scale projects. We are also putting measures in place to ensure that there is a smooth transition process for those nearing retirement age who might consider joining this team of specialists.
Working on this initiative has convinced me of the strong business case for taking on older workers and people of retirement age. The benefits have been far ranging and sometimes unexpected. For example, by bringing in such experts, we have been able to significantly improve communication and cross-functionality within the company. Senior experts often serve as a bridge between departments, joint ventures, and business areas, bringing together different strengths and experience and creating a whole that is larger than the sum of its parts.
We are exploring how to expand these efforts to go beyond MHI and benefit the wider society and communities we work in. For example, we are now considering how we can bring in senior experts from other businesses and industries to provide benefits for our company. We are also aware that many of our retired workers have invaluable experience working in specific countries, regions, and industries. By using this knowledge base, we hope to improve the communication and understanding we have with our customers globally.
In rapidly aging Japan, there is still a strong wish to maintain active lifestyles after retirement. In our work for MHI Executive Experts it has become clear that retired employees want their skills to be put to good use, and they want to be able to share their experience with the next generation of employees. This can be an empowering and motivating process for all concerned, creating a win–win scenario for younger and older workers alike.
With our experience through MHI Executive Experts we hope to show the significant benefits older workers bring. Looking ahead, it will be essential for all companies—in Japan and elsewhere—to establish an effective system for managing the processes of retirement and skills transfer. MHI will seek to become more actively involved in the conversation about aging and knowledge transfer, and will look for guidance and partnership from companies and organizations worldwide to help better leverage older workers, address skills gaps, improve knowledge transfer at global and local levels, and ultimately move the world forward.
about the author
Shunichi Miyanaga is President and CEO of Mitsubishi Heavy Industries, Ltd. (MHI), where he leads one of the largest manufacturing and engineering companies in the world with over 80,000 employees worldwide, consolidated sales of $40 billion, and products ranging from power systems, chemical plants, aircraft, ships, to industrial machinery.