When no one Retires

You can see the graying of your workforce as a crisis — or an opportunity.

Before our eyes, the world is undergoing a massive demographic transformation. In many countries, the population is getting old. Very old. Globally, the number of people age 60 and over is projected to double to more than 2 billion by 2050 and those 60 and over will outnumber children under the age of 5. In the United States, about 10,000 people turn 65 each day, and one in five Americans will be 65 or older by 2030. By 2035, Americans of retirement age will eclipse the number of people aged 18 and under for the first time in U.S. history.

The reasons for this age shift are many — medical advances that keep people healthier longer, dropping fertility rates, and so on — but the net result is the same: Populations around the world will look very different in the decades ahead.

In the coming decades, many forces will shape our economy and our society, but in all likelihood no single factor will have as pervasive an effect as the aging of our population. Back in 2010, Standard & Poor’s predicted that the biggest influence on “the future of national economic health, public finances, and policymaking” will be “the irreversible rate at which the world’s population is aging.”

This societal shift will undoubtedly change work, too: More and more Americans want to work longer — or have to, given that many aren’t saving adequately for retirement. Soon, the workforce will include people from as many as five generations ranging in age from teenagers to 80-somethings.

Are companies prepared? The short answer is “no.” Aging will affect every aspect of business operations — whether it’s talent recruitment, the structure of compensation and benefits, the development of products and services, how innovation is unlocked, how offices and factories are designed, and even how work is structured — but for some reason, the message just hasn’t gotten through. In general, corporate leaders have yet to invest the time and resources necessary to fully grasp the unprecedented ways that aging will change the rules of the game.

What’s more, those who do think about the impacts of an aging population typically see a looming crisis — not an opportunity. They fail to appreciate the potential that older adults present as workers and consumers. The reality, however, is that increasing longevity contributes to global economic growth. Today’s older adults are generally healthier and more active than those of generations past, and they are changing the nature of retirement as they continue to learn, work, and contribute. In the workplace, they provide emotional stability, complex problem-solving skills, nuanced thinking, and institutional know-how. Their talents complement those of younger workers, and their guidance and support enhance performance and intergenerational collaboration. In encore careers, volunteering, and civic and social settings, their experience and problem-solving abilities contribute to society‘s well-being.

In the public sector, policy makers are beginning to take action. Efforts are under way in the United States to reimagine communities to enhance “Age friendliness,” develop strategies to improve infrastructure, enhance wellness and disease prevention, and design new ways to invest for retirement as traditional income sources like pensions and defined benefit plans.

Companies, by contrast, are uniquely positioned to change practices and attitudes now. Transformation won’t be easy, but companies that move past today’s preconceptions about older employees and respond and adapt to changing demographics will realize significant dividends, generating new possibilities for financial return and enhancing the lives of their employees and customers.

Let’s examine why leaders seem to be overlooking the opportunities of an aging population.

The Ageism Effect

There’s broad consensus that the global population is changing and growing significantly older. There’s also a prevailing opinion that the impacts on society will largely be negative. A Government Accountability office report warns that older populations will bring slower growth, lower productivity, and increasing dependency on society. The World Bank foresees fading potential in economies across the globe, warning in 20018 of “headwinds from ageing populations in both advanced and developing economies, expecting decreased labour supply and productivity growth.” Such predictions serve to further entrench the belief that older workers are an expensive drag on society.

What’s at the heart of this gloomy outlook? Economists often refer to what’s known as the dependency ratio: the number of people not typically in the workforce — those younger than 15 and older than 65 — in a population divided by the number of working-age people. This measure assumes that older adults are generally unproductive and can be expected to do little other than consume benefits in their later years. Serious concerns about the so-called “silver tsunami” are justified if this assumption is correct: The prospect of a massive population of sick, disengaged, lonely, needy, and cognitively impaired people is a dark one indeed.

This picture, however, is simply not accurate. While some older adults do suffer from disabling physical and cognitive conditions or are otherwise unable to maintain an active lifestyle, far more are able and inclined to stay in the game longer, disproving assumptions about their prospects for work and productivity.

Most 60-something workers today are healthy, experienced, and more likely than younger colleagues to be satisfied with their jobs. They have a strong work ethic and loyalty to their employers. They are motivated, knowledgeable, adept at resolving social dilemmas, and care more about meaningful contributions and less about self-advancement. They are more likely than their younger counterparts to build social cohesion and to share information and organizational values.

Approximately two-thirds of workers ages 45 to 74 said they have seen or experienced age discrimination in the workplace. Of those, a remarkable 92% said age discrimination is very common in the workplace. A study involving 40,000 made-up résumés found compelling evidence that older applicants, especially women, suffer consistent age discrimination. A case in point is IBM, which is currently facing allegations of using improper practices to marginalized and terminate older workers.

Today it is socially unacceptable to ignore, ridicule, or stereotype someone based on their gender, race, or sexual orientation, so why is it still acceptable to do this to people based on their age?

Over the past decades, companies have recognized the economic and social benefits of women, people of color, and LGBT individuals in the workforce. These priority initiatives must be continued — obviously, we’re not even close to achieving genuine equality in the corporate world; at the same time, the inclusion of older adults in the business diversity matrix is long overdue.

Redefine the workweek.

To start, you need to reconsider the out-of-date idea that all employees work Monday through Friday, from 9 to 5, in the same office. The notion that everyone retires completely by age 65 should also be jettisoned. Companies instead should invest in opportunities for creative mentorship, part-time work, flex-hour schedules, and sabbatical programs geared to the abilities and inclinations of older workers. Programs that offer pre-retirement and career transition support, coaching, counseling, and encore career pathways can also make employees more engaged and productive.

Many older workers say they are ready to exchange high salaries for flexible schedules and phased retirement. Some companies have already embraced nontraditional work programs for employees, creating a new kind of environment for success. The CVS “Snowbird” program, for example, allows older employees to travel and work seasonally in different CVS pharmacy regions. Home Depot recruits and hires thousands of retired construction workers, making the most of their expertise on the sales floor. Michelin has rehired retirees to oversee projects, foster community relations, and facilitate employee mentoring.

Reimagine the workplace.

Your company should also be prepared to adjust workspaces to improve ergonomics and make environments more age-friendly for older employees. No one should be distracted from their tasks by pain that can be prevented or eased, and even small changes can improve health, safety, and productivity. Xerox, for example, has an ergonomic training program aimed at reducing musculoskeletal disorders in its aging workforce. BMW and Nissan have implemented changes to their manufacturing lines to accommodate older workers, ranging from barbershop-style chairs and better-designed tools to “cobot” (collaborative robot) partners that manage complicated tasks and lift heavier objects. The good news is that programs that improve the lives of older workers can be equally valuable for younger counterparts.

Mind the mix.

Lastly, you need to consider and monitor the age mixes in your departments and teams. Many companies will need to manage as many as five generations of workers in the near future, if they aren’t already. Some pernicious biases can make this difficult. For example, research shows that every generation wants meaningful work — but that each believes everyone else is just in it for the money. Companies should emphasize workers’ shared value. They would be far better served to focus on factors that lead all employees to join, stay, and perform at their best.

By tapping ways that workers of different generations can augment and learn from each other, companies set themselves up for success over the long term. Young workers can benefit from the mentorship of older colleagues, and a promising workforce resource lies in intergenerational collaboration, combining the energy and speed of youth with the wisdom and experience of age.