Listen to: The Making of the Modern Elder Marketplace by Diana Wu David
The world is getting greyer. 10,000 people in the US turn 65 years old every day. By 2025, the population aged 65 or above in China may hit 300 million. The number of Americans aged 50 and above who are working has grown significantly over the past decade, and is expected to keep increasing. In many countries the seasoned worker is also the fastest growing part of the workforce.
This demographic shift is the next tsunami in the future of work – large scale, anticipated in the abstract, but a blind spot for most leaders.
Companies overlook this resource at their peril. Few companies have given serious thought to reimagining the role of the modern elder for competitive advantage. In 2015, PwC conducted a survey of global CEOs and found that 64% had a diversity and inclusion strategy, yet of those, only 8% included age as a dimension of their strategy. Fewer than half of companies worldwide factor longevity into their strategic planning.
The advantages of workers aged fifty and over include their experience, professionalism, work ethic, lower turnover, and knowledge. They continue to be the most engaged age cohort across all generations. 65% of employees aged 55+ are considered to be ‘engaged’ based on survey data, while younger employee engagement averages 58% to 60%. The level of employee engagement has implications for both retention and business results. It takes only a 5% increase in engagement to achieve 3% incremental revenue growth.
Perhaps most interesting is data on the cost of senior workers for those who see the benefits, but fear greater costs. Contrary to common perception, workers over 50 do not cost significantly more than younger workers. Shifting trends in reward and benefit programs have created a more age-neutral distribution of labour costs. The incremental costs of adding talent aged 50 and over results in only minimal increases in total labour costs and may be far outweighed by the value that they add.
Living, Learning and Earning Longer
Companies have been focused on the millennials and incoming Generation Z. Now ‘perennials’ or older workers who have decided to continue working are the new focus for HR policy and management. How do we engage the older worker? How do we take advantage of their wisdom in a way that benefits the company as a whole without alienating younger workers? How should we pay these supposedly expensive resources?
Three emerging trends on the horizon point to promising possibilities:
Redefining the Returnee Programme
Once the province of parents coming back from childcare, returnee or apprenticeship programs are being extended to older workers who want to retrain.
Born out of the success of its returnee programme, one programme at Barclays is dedicated solely to workers over the age of 50. In the UK, the Barclays ‘Bolder’ Apprenticeship is aimed at creating jobs for older people through retraining, regardless of their age or social circumstance. Since its launch in 2015, the programme has recruited over 80 apprentices, growing the bank’s number of older apprentices from 4% to 20%.
Often, just modifying existing policies to make them more age inclusive can better accommodate a multigenerational workforce. Extending a parental leave policy to cover caregiving leave for any loved one – elder, partner or child – can go a long way in ensuring the offering is relevant to your workforce across various life stages.
For those wanting to spread their entrepreneurial wings, start-ups are benefiting from the opportunity to tap into the wisdom of experience, often paired with younger employees just starting out. Priyanka Gothi, founder of the Wise@Work platform that matches seniors with new job opportunities, says that many of her clients looking to hire are attracted by the idea of a part-time person with experience and wisdom to help mentor young teams with more grit than experience. In fact, many seniors are starting new companies themselves. In America those between 55 and 65 are now 65% more likely to start up companies than those between 20 and 34, according to the Kauffman Foundation.
Universities woke up to the promises of adult learning decades ago and mainly focused on filling time for those with the luxury of leisure and income for extended education.
Business schools have sensed an attractive market for this sector with Advanced Management Programs for exiting CEOs and business owners. What can we learn from these programmes that might help us make a broader path for people to continue contributing more, for longer?
One lesson is that there is no end period for learning. As explained by London Business School professors, Lynda Gratton and Andrew Scott, the 100-year life is opening up more oscillations between work and learning, and for longer. People are reskilling throughout their lives and using that knowledge to launch second and third careers.
Second is that companies have a strong role to play in the learn-to-work, work-to-learn process. Aviva realised that a third of their 17,000-strong UK workforce was over the age of 45 and was the fastest growing segment of their employee base. However, anecdotal stories of tapering career development after the age of 50 were common. Sending the message that the company would develop and invest in its employees at 55 in the same way they did at 25, they instituted a check-up on work, wealth and wellness for every employee over 45.
If there are needs to fill, companies with foresight can provide training or partner with universities to collaborate and reskill older workers for longer-term success and competitive advantage.
Return of the Guild
With the current retirement age in most companies and countries leaving workers several decades to continue working, the rise of semi-private networks is helping to organise people and companies to create new value. Author and idea maven, Seth Godin, anticipates, “These entities will become ever more powerful as the economies of the firm begin to fade, replaced by the speed and resiliency of trusted groups.”
For seasoned workers, these ‘guilds’ can be as simple as a network of people with similar interests sharing ideas and projects to groups certified at advanced levels. Future Work Forum is a global think tank with bi-monthly calls to share members’ expertise and collaborate for maximum impact. Critical Eye, in Asia and Europe, is a peer-to-peer board community for information and ideas. Mercer has been evaluating retired employees as a network of potential subcontractors that might take on extra work from time to time, already trained in the style, standards and values of the firm. The opportunity for firms to tap into this kind of senior expertise, once only accessible via personal networks, is now easier than ever.
With widespread disruptions due to the COVID-19 pandemic requiring companies to rethink HR policies, now is the time to rethink standards, policies, and practices to support a well-functioning multigenerational workforce. The opportunity is manifold: retain market-valued intellectual capital, raise the stability and engagement of highly skilled employees and deliver products and services designed by a representative workforce stand to benefit. Companies without strategies to integrate this shift in demographics into their workforce planning will miss out as their competitors move ahead.
Leadership for a better future:
This is one of a series of 13 practical articles on leadership written by the Future Work Forum (FWF) for the European Foundation for Management Development (EFMD), an accreditation body for business schools globally with a membership of 30,000 management professionals. Our partners have contributed to a special edition of their Global Focus magazine.
About the Future Work Forum:
The FWF exists to explore the working world of tomorrow. It is a think tank and network of highly skilled experts who share a passion to create a better, more humanised workplace, inspiring a new generation of leaders.