3 ways organizations can empower older workers amid an ageing global workforce

It’s no secret that the global workforce is ageing along with populations. Fewer young people are entering the workforce due partly to lower fertility rates and partly to more extended education.

According to OECD data, a long-term trend toward earlier retirement is slowly going into reverse. The United Kingdom, for example, increased its retirement age from 60 (for women) and 65 (for men), first by equalizing genders, then pushing both up to 66 with a plan to move up further over time. In Japan, before a recent increase in the retirement age from 60 to 61 and higher in future years, the government struggled to push the official retirement age up, leaving firms to often solve the problem by releasing workers at 60 and rehiring them on new contracts, often at reduced pay rates.

Some 150 million more older workers by 2030

In the G7 countries, workers age 55 and older will exceed 25% of the workforce by 2031, nearly 10 percentage points higher than in 2011. Japan is the extreme case: by 2031, Japanese workers 55 and older will approach 40% of the workforce. According to Gallup, 41% of American workers expect to work beyond age 65. Thirty years ago, it was 12%. Even the spike in retirements during the peak-Covid Great Resignation now looks more like a Great Sabbatical, a blip in the long-term trend, with a higher percentage of retirees reentering the workforce than in February 2019.

This issue extends beyond developed markets. China’s elderly population (65 and older) will double by 2050. Brazil’s proportion of workers over age 55 is creeping up to the mid-teens. Globally, approximately 150 million jobs will shift to workers 55 and older by the end of the decade. That’s not far short of the entire working population of the US.

Despite the shift, it’s rare to see organizations implement programmes to integrate older workers into their talent system. In a global employer survey from 2020, AARP found fewer than 4% of firms were already committed to such programmes, with only a further 27% saying they were “very likely” to explore this path in the future.

The good news is that, with the right tool kit and mindset, ageing workforces can help employers get ahead of their talent gaps and create high-quality jobs that turn older workers’ skills into sources of competitive advantage. There’s persuasive OECD research concluding that age-diverse firms are lower in turnover and higher in productivity than benchmarks. Although this won’t sway everyone, we might add that creating roles for older workers, if your business allows for them, also seems like the right thing to do.

Let’s acknowledge three challenges before getting to the “how”:

Not all jobs are equal when it comes to age diversity. It’s easy to picture an academic or a store greeter working deep into their seventies, but it’s harder to imagine a roof repairer or delivery van driver.

Not all career changes can be made quickly or easily. After a 30-year career as an accountant, few will become research scientists.

Not all older workers are the same. Their motivations are their own, so we must not assume older workers fit a single profile. Archetypes of older workers

In our continuing programme of research into worker motivations (The Working Future: More Human, Not Less and Working Women and the War for Talent), we’ve heard from over 40,000 workers in 19 countries—across all economic sectors, income groups, educational backgrounds, age cohorts, and job types—about what motivates them to go to work and what helps them thrive when they get there.

The most striking insight from this research is that practically all of us fall into one of six worker archetypes that reflect our differing motivations at work (take our quiz to find which you are).

In the language of archetypes, there are far more Artisans and Givers in older age groups. Artisans are primarily motivated by mastering their craft. They want to do work that interests them, and they value autonomy. For Givers, work is about service. They feel rewarded by seeing their actions make a positive impact in the lives of others.

Three steps to empower older workers

By understanding older workers’ motivations, both individually and more generally, firms can design their way to success.

The approach focuses on three clear steps:

1) Retain and recruit older workers by understanding what motivates them at work;

2) Reskill them for your next 10 years of capability needs; and

3) Respect their strengths and allow them to do what they do best.

Step 1: Retain and recruit

Before age 60, the average worker in developed markets is primarily motivated by good compensation, according to Bain research. Averages are often misleading, but not in this case. In nearly all developed markets, good compensation is the top priority across archetypes.

Around 60, there’s a tipping point. Interesting work becomes the No. 1 job attribute, and both autonomy and flexibility significantly increase in importance.

The increasing desire for autonomy and flexibility at work is often expressed in efforts to control hours. Far more older workers now say they plan to reduce their working hours in preparation for retirement than a generation ago.

Managing the transition to fewer hours might come through working part-time, self-employment, or freelance work. Our research shows a significant increase in these forms of employment among the 55-and-over age group compared with those in mid-career.

Step 2: Reskill

Older workers attach surprisingly little importance to learning and growth. Just 3% of those aged 55 and over rate learning as their top motivator, compared with 8% for 18- to 24-year-olds. Some believe they’re already fit for the work, with 29% of the 55-to-64 group saying they don’t need new skills. However, 22% of people in this age group say they need more tech skills.

It’s true that older workers don’t get invited to training programmes as much as younger colleagues, but in the United States, at least, more than half are offered training every year.

Both workers and employers need to shift their thinking around retraining. An older worker’s absence of a growth mindset might make them a weak candidate for employment extension. But companies need to design programs that appeal.

Older workers are motivated to participate when training helps to accelerate their pursuit of interesting work. Encouraging supervisors can also be an important motivator of participation of older workers (and workers of all ages).

Step 3: Respect their strengths

Older workers tend to be more loyal to their employers and more satisfied at work and with life in general.

The Givers like to mentor. The Artisans set high standards of mastery for those around them. Giving space to older workers to bring their unique benefits to the workplace can strengthen your culture for everyone.

Investing in age diversity

The uncomfortable truth is that age-related work discrimination is widespread.

Demographic reality will catch up with that attitude soon enough. And when it does, those firms that invest in recruiting, reskilling, and respecting the strengths of older workers will not just solve a part of their talent gap problem, they’ll create a workforce that’s more productive, more balanced, more diverse, and more loyal than the one they have today.

Source: World Economic forum