What may be surprising to hear is that older workers will pick up 150 million jobs by 2031 and comprise 25% of the workforce in the United States, according to Bain & Co. We’ll still see large numbers of baby boomers retiring, but hiring older workers will continue according to Bain partner and co-chair of Bain Futures, James Root, “The demographic trend is clear — older workers are going to rise as a percentage of the workforce in the next 10 to 20 years, as well as rising as a percentage of the population.”
Workers aged 75 and older are the fastest-growing workforce demographic. If the projections are correct and this segment continues to grow, many leaders are concerned about the impact their salaries will have on the bottom line, as well as blocking career advancement for Gen X and older Millennials. However, those fears may not come to fruition.
Currently, workers 55+ comprise about 25% of the US workforce, while Gen Z workers are less than 13% of the workforce. According to Morningstar, one interesting finding from the Bain report is that at age 60, motivation switches from financial to interesting work. According to Root, “White-collar workers probably have an advantage in working later. We can say that the shift from prioritizing compensation to prioritizing flexibility after the age of 60 is especially true among university graduates, and less pronounced among those without a university degree.”
According to a recent article from Korn Ferry, their desire to keep working coincides with a need for skilled workers post-pandemic. And in looking at how we arrived at an expected retirement age, the rationale no longer holds up.
The Social Security Act of 1935 set the age of 65 as the minimum age to receive full retirement benefits. At the time, 65 was the average life expectancy. After the Second World War, most companies adopted this as the retirement age. In the 1960s, early retirement became fashionable, and many people retired even younger. Retirement communities and golf courses began to grow. By the 1980s, people were aspiring to retire early.
As you can guess, most Americans didn’t have jobs that enabled them to retire early. And eventually, the official age in the US shifted to 67. As we prepared to start a new century, this didn’t seem to matter as two-thirds of Americans were tapping into their Social Security benefits before they were 65.
This has more to do with how retirement monies are set aside for employees. Financially dependable pensions were being switched to 401K retirement plans, which are less economically secure. As life expectancy had hit 75 in the 2000s, the financial crisis of 2008 swept away many people’s retirement savings, and their only option was to keep working.
The article notes that it was at this time that researcher Juhani Ilmarinen at the Finnish Institute of Occupational Health created the Work Ability Index, “ which analyzes employees’ attributes (competence, health, family concerns, values, motivations) alongside workplace realities (demands, leadership, and community). This rubric allowed organizations to assess and more clearly identify age-friendly environments. For example, a typical 68-year-old worker might be losing strength and balance, but they might also harbor substantial industry experience and knowledge—qualities that could make them a strong manager…Other, broader assessments were developed, such as the Age Management Index, which takes into account employees’ global experience, including recruitment, lifelong learning, career development, flexibility, healthcare, access to new jobs, and healthy transitions to retirement. Organizations now had a metric for assessing roles for older employees, and a language in which to express it.”
According to Patrick Coll, associate director for geriatrics at the Center on Aging at the University of Connecticut Health Center, “very little affects the ability of a septuagenarian or octogenarian to do their work…many seniors can be very productive and active members of the workforce well into their 80s.” Assuming older workers will have physical or cognitive issues is inaccurate. Per Coll, “The minor memory-related issues that most aging people experience do not substantially affect their ability to work productively.”
Instead of looking at age as a negative, consider the person, not their age. Are they still driven to contribute, learn, and grow? And build multi-generational respect into the company’s culture. Be open about the benefits of working together and learning from one another. There should be zero tolerance for younger workers making fun of older workers for not being as current on technology or for older workers dismissing younger workers’ ideas because of their age.
As companies realize this shift and develop programs for reskilling older workers to recruit and retain them, they can embrace the contributions of older workers. According to Root, this area has plenty of room for innovation.
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