70 is the new 50: Why companies should embrace aging workforces
Aging populations mean staff that are older and more knowledgeable. Smarter companies are starting to harness this valuable experience.
A city such as Berlin can feel like the land of the young, where everyone seems to be a full-time social media influencer or a blockchain entrepreneur on a skateboard. However, Germany’s demographics are actually pointing in the other direction, as the country’s populace and workforce age.
In fact, according to market research company Statista, the average age in Germany is already 46, a huge leap from just 40 in 2000 and 34 in 1970. Even more sobering is a study by the Bertelsmann Foundation, which revealed that while next year three workers will support every person aged over 65, the ratio will be one-to-one by 2035. It’s part of a trend across Europe. According to U.N. projections, in around a decade Spain, Italy and Portugal will start to hit a median age of 50 or higher. Populations in France, Ireland, the U.K. and Scandinavia will be a bit younger; but even so, by 2060 the average age in those countries will be somewhere in the mid-40s.
Things are just as alarming in America, where the U.S. Department of Labor reckons one in four U.S. workers will be 55 or older by 2024, more than double the rate in 1994. Meanwhile, in Japan, where decades of low birth rates have resulted in one of the world’s oldest and fastest-aging populations, the workforce could shrink by almost 13 million people in the next 20 years, according to the country’s health ministry. Manufacturing employment there could fall by 20%, highlighting the challenge to the country’s industrial competitiveness.
The good news, however, is that employees increasingly want to work for longer, and not necessarily because they need to. “We’re living and staying healthier for longer. Many people, especially at executive level, want to have a purpose,” says Anita Hoffmann, a former senior executive in the chemical industry, and author of “Purpose & Impact: How Executives are Creating Meaningful Second Careers.”
Hoffman is definitely walking the walk. After leaving the chemicals industry, she moved into management consultancy. Following a spell at one of the leading global headhunting firms, she founded her own executive search and coaching company, Executiva. “After the financial crash of 2008, there were a lot of people in their 40s and 50s who didn’t want another well-paid job,” says Hoffman. “They wanted to transition into a second career for the next two or three decades.”
Or as Martin Swain, an independent employment consultant – and former head of global human resources at British pharmaceutical giant GlaxoSmithKline – puts it: “Many people actually enjoy their jobs. Not everyone wants to retire to play golf or watch Netflix, even if they can afford to.”
Although Hoffman says most companies are still ageist, some progressive employers are opening up alternative career routes that feature more flexible assignments and schedules, creating opportunities for older members of staff to mentor younger workers and offering phased retirement. She cites American management firms, such as McKinsey & Company and Bain & Co, as being particularly good at offering part-time work for highly skilled older workers.
In safe hands
According to Swain, it makes complete sense for businesses to ride the wave of this demographic shift and view older staff as an opportunity to bridge the talent gap. During the 2008 economic meltdown, many companies hired cheaper, far less experienced staff. Now that the global economy is more stable, the same companies are starting to appreciate the benefits of those with more management experience.
Those benefits should be obvious, but they bear repeating. In general, older people have better leadership skills, and often have stronger face-to-face communication skills that were honed before people ran their lives via email, texts and social media. Older employees tend to be more engaged with their job, too. According to a survey by the Pew Research Center’s Social & Demographic Trends project, 54% of workers older than 65 are still employed because they want to be – not because they need the money. Perhaps less obviously, older staff are also more in step with the prevailing workplace culture. In a report published by Randstad Work Solutions, 90% of baby boomers say being “ethical” is “extremely or very important” to workplace culture, compared to 83% of Generation X workers and 66% of Generation Y workers.
Research by Harvard Business Review claims diversity unlocks innovation in a business, and that diverse companies are 45% more likely to report growth in market share. No wonder some companies see maturity as a plus point that they can mine and turn to their advantage. In the U.K., energy and services firm Centrica and retailer Marks & Spencer abolished their mandatory retirement ages before the British government scrapped the law which made it compulsory for workers to take retirement at 65. In the U.S., accountancy giant PKF International – which operates in 150 countries – actively hires older accountants when other firms compel them to retire, offering flexible work options including shorter working weeks. And at American adhesive and sealant manufacturer Franklin International, many employees stay on well into their seventies.
Of course, it’s one thing to employ older staff. It’s quite another to use their knowledge to the best effect. To bridge the talent gap successfully, senior skills also have to be passed down to younger workers. This is why Mercedes has recently introduced demographic audits across the company to encourage employees and management to openly discuss the age structure of their teams and address ways to promote cooperation between young and old. Then there is tech giant SAP, which runs a “mature talents” program that promotes two-way mentoring between experienced staff and younger colleagues.
“The workplace of the future may look more multigenerational and a whole lot more fluid,” admits Martin Swain. So welcome to a world where 70 is the new 50: where senior members of staff are valued and venerated rather than tolerated and then put out to grass. Yes, this could be a change – even a shock – for some businesses; but it’s a necessary one if they want to survive and thrive. Because at a time when certain industries are struggling with skills shortages, age isn’t the problem. It’s the solution. — Boyd Farrow, Tony Greenway
Images: Napal Illustration