The share of the workforce aged 55 or over may be increasing, but that doesn’t mean older Australians are not facing significant barriers and discrimination.
A new national survey has revealed that ageism is on the rise in Australia, with 37 per cent of over-50s now reporting having experienced ageism, which was up from 33 per cent in 2018.
The Council on the Ageing’s (COTA) State of the Older Nation report also revealed 26 per cent of respondents had experienced employment-related discrimination since turning 50 – up from 22 per cent in 2018 when the last survey was conducted.
However, older Australian advocacy group EveryAGE Counts believes the figures from the COTA study show that ageism is becoming a “national crisis”.
EveryAGE Counts campaign director Marlene Krasovitsky said these worrying trends show that ageism is no longer an issue that can be ignored.
“Too many are accustomed to laughing off incidents of ageism as relatively trivial, but we know it’s doing real damage to millions of Australian lives,” Ms Krasovitsky said.
“The fact that 37 per cent of Australians over 50 have been discriminated against should be considered a national crisis. And to see ageism on the rise since 2018 is particularly alarming.
“Most Australians are living longer, healthier lives. Yet ageist attitudes and practices continue to exclude, diminish and marginalise older people. Workforce discrimination, for example, hurts not just older Australians, but the entire community and our economy.”
Ms Krasovitsky said until people started recognising the problem, ageism would continue to rise and that could have a serious impact on people’s health.
“Changing social norms is never easy, but it starts with acknowledging the problem as serious,” Ms Krasovitsky said. “We need to stop shrugging off incidents of ageism and start calling them out.
“The World Health Organization recently found older people who hold negative views about their own ageing will live 7.5 years less, on average, than those with positive attitudes.
“How can you not develop negative attitudes when over a third of Australians over 50 are being discriminated against, and the rest of us are forced to see and hear ageist views on a daily basis?”
While the State of the Older Nation report had some alarming figures on age-based discrimination, it also showed that only 49 per cent of those aged 65 had retired, which was down significantly from 2018 when 60 per cent had retired.
Also, the proportion of people aged 65 to 69 who said they wanted more paid work has doubled from 2018 (15 per cent to 31 per cent)
Those figures may reflect that the Age Pension eligibility age has also changed in that time, but does also demonstrate that older Australians are staying in the workforce longer, but are not getting as much work as they want or need.
According to the survey, 25 per cent of those who are still working do not think that they will ever retire, which was up slightly from 24 per cent in 2018.
It is hard to know exactly how many older Australians plan on returning to work.
As Australia’s vaccination rate heads towards meeting important targets, economists are no clearer on how the shockwaves caused by the COVID-19 pandemic will play out in the months to come.
There are fears that as business slowly starts to pick up around the country, growth will be slowed by a significant labour shortage, with many older workers, who may have lost work, choosing not to return to the workforce.
A CommSec Economic Insight analysing detailed labour force data has found that lockdowns in NSW and Victoria have scrambled the figures, but appear to point to many older Australians not returning to the workforce.
The report explains that prior to the pandemic, one of the major reasons that Aussies were not employed or looking for jobs was that they had retired and were out of the job market.
In April 2018, a record 38.7 per cent of people aged 65 and over said that they were ‘permanently not intending to work’, which was a significant increase from the 33 per cent that answered that way in September 2014.
Prior to COVID-19, the figures showed a reassessment, with the proportion of those not in the workforce because they were retired falling from 38.7 per cent to a three-year low of 35.3 per cent in July 2019.
The effect of COVID hitting shortly after this change has made it impossible to determine if this was the start of a trend, the CommSec economists explain.
That is because more people left the job market over lockdown periods because they were not employed but were not looking for work because they were likely to return to their employer when businesses reopened.
That meant that the proportion of those not in the workforce because they were retired hit a record 39.9 per cent of the total in June 2021 and this has since fallen to a low of 36.4 per cent in September 2021.
CommSec’s chief economist, Craig James, explains that working out why people are not in the job market will be important in the coming months.
“If more people are electing to retire, then there are fewer potential workers to fill positions,” Mr James said. “That may mean the job market tightens more than generally expected, putting upward pressure on wages and prices. And that is especially the case if foreign borders stay closed.
“Older Aussies may see greater health risks in being in the job market in the COVID era. And still others may elect to live large given the experience of the past 18 months.
“At this stage data still shows that older Aussies are active in the job market with record participation levels. However, peak levels may not be far away.”
Mr Elliott explained that ANZ had found older workers more effective in customer service roles and better able to empathise with customers in difficulty due to more life experience than younger workers.
In November last year, a research discussion paper commissioned by Sustainable Population Australia (SPA) said that the proportion of workers over 65 would settle at around 28 to 33 per cent and that over-65s would never outnumber younger adults.
Now, as the dust settles, the economy improves and the breadth of job opportunities increases, people are reflecting on their experiences. The perceived need to be ‘always available’ for work without any additional recognition, respect or reward has many realising that work itself is now a threat to their happiness, health, relationships and mental outlook.
Decompression will send employees out the door, unless work culture changes
This instinctive human response to threats makes room for bold choices that will play out in one of two ways, but both ultimately end with a mass movement of talent in the workforce.
Many workers in Australia feel their relationship with their job is irreparably broken and will flee from what feels like a toxic relationship. For others, the simple desire for change, to say, “it’s not you, it’s me” and draw a line under the past two years will be overwhelming.
Homeschooling and the pandemic have made people reconsider their work/life balance.
In the coming months we’re likely to see an emancipation on a scale we’ve never seen before as people change roles or start entirely new careers.
If this feels like you, be aware that the grass isn’t always greener on the other side. Starting a new role, establishing new networks and developing new skills takes time and energy, of which Aussies have precious little.
On the other hand, others will choose to fight for the life and lifestyle they feel they now deserve. Flexibility, respect and purpose will become the minimum employee demands.
Organisations who do not meet those needs will lose staff. Those willing to embrace radical flexibility, human-centric work design and progressive social causes will become talent magnets.
It’s worth reminding your boss of this if you choose to have a discussion about the future of your role. The best place to start is examining what you need to change about your job and be firm about what you’ll accept as minimum.
It also needs to be said that the luxury to reconsider a job or entire career is reserved predominantly for knowledge workers who enjoy a higher-than-average sense of economic stability. Many lower-paid or frontline workers will not have the luxury to make these decisions.
Rewriting the social contract: the rise of the four-day work week?
When economic conditions swing wildly in the favour of workers, it tends to pave the way for massive societal change. Take the introduction of the 40-hour work week, or how WWII paved the way for women to enter jobs previously reserved only for men.
We’re seeing the same thing in 2021. With the job market heavily favouring jobseekers, the premiums being offered to secure talent make a job change are an alluring prospect for most workers.
Combine that with an increased desire for flexibility in a role and Australians’ willingness to change jobs, and companies will be forced to come up with solutions that don’t involve a pay rise.
Imagine staying on the salary you’re on, but only working four days. Sounds appealing, right?
Whether you choose to flee or to fight for better, the future of Australia’s work practices are in your hands. There’s a once-in-a-lifetime opportunity for Australians to transform how we work and seize the lifestyle we want, but it won’t come from a job-switch alone.
As we enter this new era, it’s important to remember that we work to live, we don’t live to work. Prioritise your wellbeing and be clear with your employer about what you need. After the last two years, we all deserve at least that.
Aaron McEwan is a behavioural scientist, coaching psychologist and vice president for global research and advisory firm, Gartner | @aaronmcewan
New research of Australia’s older workers has found that experiences of age discrimination in the workplace have almost doubled in the last five years.
According to the Australian Seniors Series: Ageing in the Workforce 2021 report, one in five workers (20.7%) aged over 50 has encountered age discrimination in the workplace – twice as many compared to 2016 (9.6%). Just over 40% say they have felt patronised in the workplace because of their age.
Despite the prevalence of ageism, more than three quarters of Australians aged over 50 want to keep working indefinitely and almost 90% of retirees plan to re-enter the workforce. Finance was identified as the biggest reason, followed by missing their job, boredom and a lack of social connection.
Speaking at a recent virtual roundtable, attended by HRD, industry experts discussed the new findings, sharing common misconceptions and ways to address ageism in the workplace. Tai Mavins, social research expert and consulting partner at Mymavins, said the events of the past 18 months have made things even more difficult for older workers.
“Over one in two seniors feel that Covid has made it harder to get work, and close to one in five feel that recent events have impacted their retirement plans, so it’s bringing a lot of uncertainty into their working life,” Mavins said. “In response to this, we actually see that one in four seniors admit to trying to make themselves look younger in the workplace or when they’re applying for jobs. That includes things from dying their hair, wearing the latest fashion, getting the latest haircut and makeup styles.”
Older workers are also becoming increasingly proactive at upskilling to keep up with advancing industry trends, with many branching out into new career paths.
“We found that close to three in five seniors plan to or already have reskilled or sought further training to improve their prospects since turning 50,” Mavins said. “What’s probably most interesting about that is as many as half of those people who are looking to reskill have done that in new areas, so they’re really expanding their horizons and moving beyond past roles.”
The research shows that the appetite to work and to continue learning is there. Like many nations, Australia has an ageing population, and the rising cost of living means people are working till later in life. So how do HR leaders address the causes of age discrimination and foster a truly inclusive workplace?
Humphrey Armstrong, an organisational psychologist at Lifelong Learning, said much of the problem stems back to commonly held misconceptions, like older employees costing more, being more difficult to train, or being resistant to change.
“I think one of the fascinating things is that emotional intelligence, or emotional capabilities actually increase with age well into a person’s 70s,” he said. “In terms of resistance to change, I think if older people know why change is needed and how to change they are prepared to jump on board.”
Armstrong pointed out that twice as many start-ups are initiated by over 50s than people in their twenties. Clearly, there is a huge amount of value in the learned knowledge, intuition and life experience of an older worker. But for a workforce to be inclusive of all ages, ageism needs to be more widely talked about, Armstrong said.
“We hear a lot about gender diversity, especially over the last few months, but in fact, age diversity is often ignored. We’ve got to actually bring that in and really reinforce the issue,” Armstrong said. “Research studies show that diversity is an incredible advantage in organisational life, it increases profitability, creativity, enhances governance, and it also enables better problem solving.
“And as mentioned, emotional intelligence can increase with age so there’s this huge resource where older people are, in fact, very valuable and very skilled at handling tricky interpersonal problems and generally they are better able to cope with ambiguity.”
Lisa Sinclair, editor-in-chief at DARE Magazine, said she’d like to see more organisations introducing policies to support women going through menopause and acknowledge the pressures on the “sandwich generation” who may be supporting both elderly parents and older children. There are also simple measures to improve inclusivity during the recruitment process.
“I would love it if companies in general stopped advertising for unicorns, which are these mythical creatures that have 15 different boxes to tick,” she said. “I mean that’s hard enough for any age but I think it could be particularly confronting for the over 50s who might be put off for applying for jobs just because there’s one element they don’t meet.”
Still not convinced. There are skills older workers have that their younger counterparts may not possess. Older workers have wisdom. Wisdom cannot be learnt from books or virtual learning scenarios. It is acquired over time from life experience, knowledge, and tried and tested judgements. Valuable insights, meaningful contributions, and good decision making are some of the benefits.
Mentoring enhances training programs and represents a valuable and different dynamic for mentees. We have lost some of our formal and traditional structures with changing societal norms and, with that, real role models. Acting as role models based on values and life achievements, they can nurture younger workers and share general and professional knowledge, experience, and life lessons. Mentoring creates trusted relations, increases employee engagement and retention, provides inspiration, encouragement and helps diversity.
Patience and tolerance are not just needed but expected for all workplaces. Learnt patience comes with time and less of a need to prove yourself. Being comfortable in your skin brings confidence, more prevalent in mature workers. Having tolerance in accepting people’s views and differences positively impact the team environment, bringing increased inclusion, cooperation, and collaboration. Patience also leads to better self-regulation skills benefiting team dynamics.
We have all worked with those special, reliable employees who have seen it all before and know how to weather the latest storm. In our current times of increased uncertainty, rapid change and the collective anxiety brought on by COVID, it makes sense to employ stable, mature, wise individuals who can act as emotional anchors and help us navigate turbulent waters.
For the first time, Australia’s workforce includes five different generations. It opens up a learning opportunity and creates better business performance. As a final point, before you continue to dismiss ‘older workers’, according to the Australian Bureau of Statistics (ABS), older workers are those 45-65 years of age. Now, who is an older worker?
Experienced older Australians finding job opportunities are drying up.
Who is going to hire a woman in her 50s?
It’s a question Tracey Ward has been asking herself a lot lately.
The 56-year-old is a self-employed life coach for women, but has seen her income dry up due to the pandemic.
She’s surviving off JobKeeper payments, but when the subsidy is scrapped in March, Ms Ward is afraid she will “really struggle”.
She knows she could get some sort of work – “there are organisations like Bunnings who hire people of all ages”, she said – but she wants something different for herself and fears the lack of attention from the federal government on her age group could signal the end of her career.
While the government has focused on the high levels of youth unemployment borne out of the pandemic, middle-aged, mid-career workers say they have been forgotten.
The unemployment rate for Australians aged over 40 was 3.8 per cent in January 2020 and grew to 5.2 per cent in July before recovering slightly to 4.7 per cent by October.
Some of those stuck unemployed say they are dumbing down their resumes to appear less threatening to potential new employers; others, like Ms Ward, wish funding could be funnelled into upskilling rather than hiring incentives based on age.
‘If you’re 40-plus and a woman you just don’t get a new job’
Sheena Gulati was told many times in 2020 that she was “overqualified” for a role.
The 43-year-old lives in Sydney with her husband and two children.
Before the pandemic hit, she was working as a part-time contractor in accounting and finance.
Of all the reasons to be rejected from a job, being “too experienced” wasn’t something she expected to hear.
“They want someone who is young because I think they think overqualified people will ask more questions and tell them how to do things better,” Ms Gulati said.
She suspects her qualifications have little to do with it.
“It’s your age they’re talking about,” she said.
Ms Gulati felt the competition within the jobs market ramp up, and said she is surrounded by friends and family in their 40s who are struggling to secure work.
It’s become so tough she’s considering a career change.
“I have been thinking about it, but it would be a fresh start. It’s scary. I have been in this line of work for a really long time, my qualifications are in this so it will be hard starting afresh,” she said.
“If you’re 40-plus and a woman you just don’t get a new job.”
Her mortgage, other household bills and the expense of raising two children is beginning to bite and Ms Gulati says she’s frustrated the government appeared to forget about middle-aged Australians.
“Why does the government want to give more benefits to elderly people over 65 but not us? What do you do between 35 and 50? Where do you go? What do you want us to do?
“I think it’s unjust – your partiality is based on age. Why? I have no idea.”
Need a job? Learn to ask
Career practitioner Lois Keay-Smith has been coaching people looking for a new job for years, and primarily helps people aged 30 to 60.
She said, surprisingly, the pandemic appeared to be the last straw for people looking for a career change.
“It’s highlighted aspects of their work they don’t like. It’s given people some freedom to say, ‘I wasn’t happy anyway and with all these changes I want to go and do what I want to do’,” she said.
Ms Keay-Smith said older workers “definitely” faced challenges, like adapting to a new work environment where competition for jobs was high.
“I find some mature work-seekers fall back on what worked for them last time, but it doesn’t work because there are so many more eyeballs on job ads,” she said.
“But an advantage they have is they have good networks; they’ve been in the workforce and often the work I do is help them activate that network.”
Ms Keay-Smith says one of the best pieces of advice she has is: learn to ask.
“I call it the rise of the returnee – going back to a company you used to work for by tapping into those colleagues you used to work with before,” she said.
“There used to be a stigma around that – you never go back – but that’s changed and both of these things around people are more accepting that things change in organisations quite rapidly.”
Ms Keay-Smith also says she’s heard the ‘overqualified’ response quite a lot when it comes to mature workers.
“[The company’s] main concern is that you are using the job as an entry point,” she said.
“They feel you are not going to stay because it’s not fulfilling and you might get bored.”
Her advice for people who do want to scale down their role is to be honest.
“If you know you are going to get the overqualified response, you do have to address the elephant in the room and say why you are attracted to this role.
“It’s about positioning yourself as a stayer or someone who can contribute a lot in a short space of time.”
Ms Keay-Smith’s top career advice is:
Use your networks.
Get comfortable being on camera. Practise interviews on Zoom with a friend.
Don’t be afraid to go back to a company you used to work for.
Get up to speed with the latest interview techniques.
Older workers want to upskill
While Ms Ward believes an incentive to hire young people is great, she says helping people who are mid-career would have a greater benefit overall.
“Younger people have time to try things and fail and learn from it, but it becomes more scary when you’re older and have a mortgage to pay and have no back-up plan,” she said.
“You’re very conscious of your superannuation for retirement.
“I am very proud to be a woman in my 50s, but I know women who don’t let their hair go grey because if their company finds out how old they are they go in the redundancy pile.”
Just like Ms Gulati, Ms Ward has heard employers say they don’t want to hire qualified, older workers because they are afraid they will “make waves”.
She has friends who have pared back their resumes after being told they are “too experienced” for a role.
“It’s desperate and very real for many especially women; grey-haired men are classed as distinguished and experienced whereas grey-haired women aren’t. We are not revered for our wisdom.”
Ms Ward doesn’t just want to be hired, she wants to upskill to remain relevant in the ever-digitising workplace.
“Everything is going online and into a digital space so fast and some older people are being left behind because there’s no time or money to reskill,” she said.
“I have just spent the past hour trying to work out how I record myself whilst I’m recording a presentation on the Mac, so there’s endless [challenges].”
Sometimes she laughs it off. Other times it’s overwhelming.
Ms Ward said an upskilling program where companies provide pro-bono work for older people to learn digital skills would go a long way, and be much more helpful than just being hired by a company because there’s a monetary incentive.
“I’m not talking about someone from Centrelink showing me how to do it for half an hour on video. I’m talking about someone who is at the head of their game getting a tax incentive to help me step up my business,” she said.
“And then I could employ people so it could be a win if other companies were encouraged to help people like me because I don’t have the funds to do it myself.
“I don’t want a free handbag. I want my business to be really successful. I’d happily be the pilot for it.”
Have you been rejected for a job because you are ‘too qualified’? Does the system discriminate against older Australians?
Older unemployed and underemployed workers struggling to find roles due to ageism in recruiting
Answer this question: How easy is it for you to strike up a good conversation with your younger colleagues in the office kitchen?
Older job applicants told they wouldn’t be a “cultural fit” for the role
Young people are being actively preferenced for tech-heavy roles
Recruiter says there is a need for older Australians to work on their job skills, but calls for workplace age diversity targets
It may seem like a strange question, but that’s a benchmark some companies are using to decide who to hire, one Sydney-based recruiter tells us, and the assumption is that older Australians won’t know what to say to their younger colleagues.
When PM spoke to 44-year-old John Allie last month his confidence had begun to take a hit because after more than 100 job applications, and 30 final round interviews, the feedback was always the same.
“You interviewed well, they really liked you, but they didn’t feel you were a cultural fit for the role,” Mr Allie said.
“I mean what does that even mean?”
Mr Allie feared it was a bit of a catch-all comment to imply he wouldn’t get along with his younger co-workers.
So, PM asked those involved in the hiring process if Mr Allie’s fears were well founded.
“The candidate you were talking about saying it’s used as a bit of a catch-all is true,” Mark Smith, the group managing director of recruitment firm people2people, said.
He shared his own example of a middle-aged candidate being passed over for not being the right cultural fit in a call centre.
“We had a more mature guy that went in for the job,” he said.
“That’s the way the client described it to us and that’s how we had to pass it onto him.”
In this example, the company went with a younger candidate.
“The reality is that they asked him how are you going to deal with this particularly stressful job with the inbound calls,” Mr Smith explained.
“He said, ‘well I would engage in some banter in the kitchen with my colleagues’.
“That’s when the [company] turned to us and said, ‘you know what, he’s probably not going to be able to engage in the banter in the kitchen with his colleagues because he really won’t have too much in common with them to talk about.
“So they went with another candidate who happened to be younger.”
Young favoured for tech-heavy roles
But it’s not just navigating office banter that’s tripping up older Australian job candidates, said Kathryn Macmillan, the managing director of 923 Recruitment.
Her team places white-collar workers in finance, administration, sales, marketing and technical roles, from entry level to senior management.
She told PM that, for many admin and tech-heavy roles, companies are actively preferencing younger candidates.
“Perfect example of that is Single Touch Payroll,” she said.
“People in accounts need to be able to navigate a huge amount of software: MyGov ID, Single Touch Payroll, and it’s really quite complex.
“So it’s that ability to be proficient in that technological use.”
PM asked Ms Macmillan if she was seeing a preference from companies for younger people to take on those roles as opposed to older people who perhaps aren’t “digital natives”.
“So for people who are older it’s very important that they address that perception.”
Figures from the partly government-funded Centre of Excellence in Population Ageing Research show 18 per cent of workers aged 55-64 believe their organisation discriminates on the basis of age in recruitment and selection.
This preference for younger candidates is starting to show up in the number of older Australians being forced onto government assistance programs.
Australians aged between 45 and 65 now make up about half of all unemployment support recipients, with more than 330,000 on the welfare payment as of September last year.
‘Pick a footy team to follow’
Recruiter Mark Smith said there was definitely a need for older Australians to work on their job skills, but also called on the Government to establish workplace age diversity targets to combat the problem.
Age discrimination commissioner Kay Patterson told PM a large number of companies were breaching the law by discriminating on the basis of age.
PM asked Dr Patterson if the Government had any plans to set an age diversity target, at least for the public sector.
“I don’t know if setting targets is the way to go about it,” she said.
“My team here have been working on training programs for the NSW State Government to encourage their recruiters to look towards a multi-generational workforce and making sure there’s diversity — not only in terms of gender — but in terms of age as well.
“I think it’s about educating employers that they benefit from having a range of age groups.”
In the meantime, Mark Smith’s advice for underutilised or unemployed older Australians is to be specific when asking for feedback from recruiters.
“Ask the recruiter ‘what particular competencies was I lacking?'” he said.
“‘How would you describe the culture?’ and get them to describe it back to him.”
Oh, and pick a footy team to follow … seriously.
“What that means is that if you’re going to work in an environment where you’ve got a lot of people who are interested in AFL, if you’ve moved to Melbourne, you’ve got to pick up a team.”
“That’s quite a long way from retirement! We know diversity positively impacts innovation, culture and profits, but often age diversity has less focus.”
Eatwell said there are many advantages to employing older adults, particularly in positions where experience and leadership are needed. However, this doesn’t seem to be translating into more opportunities for older Australians.
“I think this has to do with trying to fit workers into traditional organisational structures – by exploring more agile, networked and outcome-oriented structures it can not only improve diversity but also productivity.”
Eatwell offers a few tips for HR professionals who want to boost the number of older Australians amongst their staff.
The starting point should always be a “thorough assessment of the recruitment process” to identify and mitigate where age discrimination could arise.
“One of the key traits we assess is learning agility – in a nutshell, the ability to pick new ideas up quickly,” he said.
“Research suggests that although you can make small improvements to your learning agility, it is more or less fixed and is not dependent on age.”
Consequently, choosing candidates based on learning agility can help add some objectivity to the hiring process.
From there it’s about developing a culture of lifelong learning. Mature employees have a huge amount of experience to share which can be “leveraged to increase overall productivity and morale”.
“Also I’ve seen reverse mentoring work very well, reducing knowledge gaps with both younger and more mature workers, as well as improving organisational culture.”
So what is lost by having nobody senior around?
“Often it’s the times of crisis when calm is needed, or when team morale is affected by a failed project, that age diverse workforces show critical value,” said Eatwell.
“We do a lot of ‘learning by doing’ and that includes what to do when things do not go according to plan.”
Eatwell added that leadership is a quality that is not tied to age, but the “reassurance of someone who has seen a crisis and worked through it to tell the tale” can be invaluable in making sure the right work gets done in these high-pressure moments.
Sometimes, the only senior person on a project is the boss, and employees are reluctant to confess an error that can lead to disaster if unaddressed, he added.
“Having a senior member of the workforce who can act as that neutral-confidant, and know what to do with the information, has considerable value.”
Employees from diverse ages have different experiences, perceptions and approaches when it comes to things like problem-solving, decision making and task handling, he said.
“They can also use various strategies – starting from the way they think, plan and execute tasks, which can influence operations in a more subtle, but still valuable way.”
People are living longer, and organizations are shifting their attitudes toward older workers as a result. Organizations that can turn advancing worker age into an asset could gain a competitive advantage.
Longer lives, older workforces
Rising life expectancies and an aging global workforce present organizations with unprecedented challenges and untapped opportunities. Companies that plan, design, and experiment with workforce strategies, workplace policies, and management approaches for longer working lives can reap a longevity dividend. Those that lag behind face potential liability concerns and skill gaps. Creating ways for people to have meaningful, productive multi-stage and multidimensional careers is a major opportunity to engage workers across generations.
One of modern science’s greatest achievements is longevity: the unprecedented length of human lives today. Average global life expectancy has rocketed from 53 years in 1960 to 72 years in 2015—and it is still climbing,1 with life expectancy projected to grow by 1.5 years per decade.2 Longevity, combined with falling birth rates, is dramatically increasing the share of older people in populations worldwide.3 Looking ahead, the number of retirees per worker globally is expected to decline from 8:1 today to 4:1 in 2050.4
These demographic facts have profound implications for individuals, organizations, and society. In this era of longevity, an individual’s career can last far longer, spanning generations of technologies and businesses. Companies can employ people into their 60s, 70s, and beyond as the pool of traditional “working-age” (20- to 54-year-old) adults shrinks. For their part, many individuals find the need—financially and/or emotionally—to stay in the workforce past “traditional” retirement age.
In our 2018 Global Human Capital Trends survey, 29 percent of the respondents rated longevity as a very important issue, and another 40 percent rated it as important. Respondents in Japan in particular, whose population is rapidly aging, were especially concerned about the issue, with 41 percent saying that it is very important.
The looming impacts of global aging
Population aging poses a workforce dilemma for both economies and organizations. Thirteen countries are expected to have “super-aged” populations—where more than one in five people is 65 or older—by 2020, up from just three in 2014.5 These include major economies such as the United States, the United Kingdom, Japan, Germany, France, and South Korea. China’s 65-and-older population is projected to more than triple from approximately 100 million in 2005 to over 329 million in 2050.6 In fact, analysts have estimated that 60 percent of the world’s population over 65 will live in Asia by 2030.7
Compounding the challenge, almost all developed economies now have birth rates below the replacement rate of 2.1.8 This means that companies in these countries must either attract workers from abroad or tap into the maturing workforce. For a view of the challenges ahead, one needs look no further than Japan—the world’s oldest country—where a shortage of roughly 1 million employees in 2015 and 2016 is estimated to cost nearly $90 billion.9
New research is being conducted to help organizations shape their talent and business strategies for an era of longevity. The MIT AgeLab, for example, works with businesses, government, and other stakeholders to develop solutions and policies aimed at engaging the elderly population. The AgeLab uses consumer-centered thinking to understand the challenges and opportunities of longevity in order to catalyze innovation across business markets.10
Older talent as a competitive advantage
As talent markets grow more competitive, organizations often find it valuable to keep older workers on the job rather than replace them with younger ones. Our research shows that older workers represent a largely untapped opportunity: Only 18 percent of this year’s respondents said that age is viewed as an advantage in their organization. But leading companies are beginning to focus on this talent pool as a competitive advantage.
The older labor pool represents a proven, committed, and diverse set of workers. More than 80 percent of US employers believe that workers aged 50 and more are “a valuable resource for training and mentoring,” “an important source of institutional knowledge,” and offer “more knowledge, wisdom, and life experience.”11 The UK government incentivizes employers to retain, retrain, and recruit older workers, and it is committed to policies that support lifetime learning and training and decrease loneliness and social isolation.12
Proactive organizations are tapping into the older talent pool by extending their career models, creating new development paths, and inventing roles to accommodate workers in their 50s, 60s, and 70s. This year, 16 percent of the respondents we surveyed for this report say their companies are creating special roles for older workers, and 20 percent are partnering with older workers to develop new career models. Organizations could find great value in older workers’ ability to serve as mentors, coaches, or experts. Taking on these kinds of roles allows older workers to “pass the baton” to younger generations, while making room for ambitious younger workers.
Many companies are also experimenting with workplace changes to help older employees remain in the workforce. For instance, BMW increased productivity on an assembly line staffed with older workers by 7 percent in just three months through simple changes such as providing cushioned floors and adjustable work benches.13 Home Depot and other organizations are engaging older workers with flexible scheduling options and part-time positions.14 Further, as many as one-third of retirees are willing to work part-time, offering opportunities to leverage this group on a contingent or gig basis.15
Reskilling also plays a role in successful strategies to utilize older talent. One global telecommunications provider encourages senior workers to reinvent themselves and invests in programs to help them acquire new technical skills.16 Software engineers who have built careers on older technologies such as COBOL or C++ can use this experience to learn mobile computing, AI, and other technologies at a very rapid rate.
An interesting and little-known fact, moreover, is that older people are among the most entrepreneurial of workers across age groups. Between 1996 and 2014, the percentage of older workers (aged 55–64) starting new ventures increased—exceeding (by 68 percent) the rate of entrepreneurship among millennial entrepreneurs (aged 20–34), which actually decreased during the same period.17
The new challenges of an aging workforce
The transition toward older talent can present challenges. Older workers may have specialized workplace needs and can attract resentment from younger workers, and they often enjoy higher salaries because of their tenure. Organizations looking to assimilate an older worker population may face the need to design new wage policies, create more flexible rewards programs, and train young leaders to manage people across generations (including team members who may be their parents’ age).
Pensions are another area where longevity impacts organizations. The World Economic Forum estimates that a $70 trillion global retirement savings gap exists today, highlighting the sharp difference between retirement needs and actual retirement income. Moreover, this gap is projected to grow to $400 trillion by 2050.18 Helping older adults to work longer and manage their retirement savings will be a vital need for companies in order to avoid the negative productivity effects of financial stress.
Our Global Human Capital Trends research shows that many organizations are unprepared to deal with the aging of global workforces. Nearly half of the respondents we surveyed (49 percent) reported that their organizations have done nothing to help older workers find new careers as they age. Rather than seeing opportunity, 20 percent of respondents view older workers as a competitive disadvantage, and in countries such as Singapore, the Netherlands, and Russia, this percentage is far higher. In fact, 15 percent of respondents believed that older employees are “an impediment to rising talent” by getting in the way of up-and-coming younger workers.
Are older workers an advantage or a disadvantage?
Perceptions of workers over 55 years old spanned both extremes, though these perceptions varied significantly by country.
Based on these findings and our anecdotal observations, we believe there may be a significant hidden problem of age bias in the workforce today. Left unaddressed, perceptions that a company’s culture and employment practices suffer from age bias could damage its brand and social capital.
Age discrimination is already becoming a mainstream diversity issue and liability concern. More than 21,000 age discrimination complaints were filed with the US Equal Employment Opportunity Commission in 2016.19 The problem is particularly acute in Silicon Valley’s technology industry, where older software engineers are often pushed to take lower-paying jobs or look for work outside Silicon Valley because of the emphasis on the “youth culture.”20
The demographic math is undeniable: As national populations age, challenges related to engaging and managing the older workforce will intensify. Companies that ignore or resist them may not only incur reputational damage and possible liabilities, but also risk falling behind those organizations that succeed in turning longevity into a competitive advantage.
The bottom line
Staying competitive in a world of unprecedented longevity demands that organizations adopt new strategies to engage with older talent. Traditional assumptions—that learning ends in one’s 20s, career progression ends in the 40s, and work ends in the 60s—are no longer accurate or sustainable. Rethinking workforce strategies across multiple generations to account for longer lives will require open minds and fresh approaches.
What role does the C-suite play in capitalizing on