Workforce Age Diversity, Innovation Performance, and the Moderating Effect of Societal Tolerance

Population ageing has resulted in a "new normal" where employees from different generations increasingly interact within organisations. However, the impact of workforce age diversity on organisational outcomes is yet to be fully understood. In this study, we focus on the link between workforce age diversity and innovation performance, owing to the importance of innovation for organisations and society. We argue that the distribution type of workforce age diversity (that is, variety and polarisation) guides when and why workforce age diversity's positive and negative innovation effects materialise. More specifically, the heterogeneity of age groups in age-varying workforces leads to positive innovation effects because it augments the amount of idiosyncratic knowledge, skills, and networks available to organisations. Age differences as a basis for social categorisation and fragmentation are maximised in age-polarised workforces, thus generating negative innovation effects. We also introduce societal tolerance as a force that should switch "on" the positive effects of workforce age variety and "off" the negative effects of workforce age polarisation. Drawing on UK higher education as the empirical setting, we find full support for our theoretical framework. We use our findings in order to devise practical implications.