By 2026, nearly one in four workers will be 55 and older. That's compared to about one in five today, according to the U.S. Bureau of Labor Statistics.
So, the proportion of younger workers in the overall labor pool will shrink. Does that mean your business will have to settle for workers that are less capable in some ways?
Research suggests that this isn't the case. As workers age, their levels of agility and skills is unlikely to diminish, according to the Gerontological Society of America (GSA). In fact, the GSA estimates that 85% of the U.S. population in the 65 to 69 age bracket has no health-related impediments to work. That proportion only drops to 81% for the 70 to74 age bracket. And the majority (56%) of Americans aged 85 and over have no such limitations — although that percentage might be smaller for heavy manual labor.
"Longevity Economics"
The GSA recently published a report entitled, "Longevity Economics: Leveraging the Advantages of an Aging Society." It offers some insight about the working world through the eyes of older employees. The report states, "While previous generations may have viewed their 50s and early 60s as their most productive and financially rewarding years, older Americans view their 70s or 80s as ages for making some of their greatest contributions."
The report highlights a series of "myths" (with some underlying elements of truth) concerning older workers, while also offering tips on making the most out of this growing workforce sector. Here are some examples:
Myth: Older workers expect to earn more.
Reality: Many older workers have already paid for their homes and other major life expenses, such as children's education. So, they're often content to take jobs with less responsibility and, accordingly, lower pay.
Myth: The cost of health benefits for older workers is higher than for younger ones.
Reality: While older workers may individually incur more health claims, they typically don't use family coverage. And they also may qualify for Medicare coverage. So, they may be less expensive to cover than younger employees.
Myth: Older workers are harder to motivate because they aren't as financially ambitious or as interested in getting a promotion as younger workers are.
Reality: Compared to their younger counterparts, older workers might be less motivated by financial rewards. But they might find nonfinancial benefits, such as flexible work hours or extra vacation time, more rewarding — and employers can satisfy these needs at little or no cost.
Different Motivations
According to GSA research, "Older workers are more motivated to exceed expectations than younger workers" and are more deeply engaged in their work than their younger colleagues. In addition, the report highlights older workers for their "willingness to contribute to company success through discretionary activities such as working longer hours, being dedicated to the company, and putting more energy into their jobs correlated with lower staff turnover and better company performance."
So, what inspires older employees to become engaged? A survey of job seekers over age 50 performed by RetirementJobs.com shows that older workers aren't indifferent to what they are paid in salary and benefits. But they are particularly interested in flexibility, security and stability, independence, autonomy and pure challenge. Even the term "retirement jobs" suggests that, while some people call themselves retired, they may view working as more of a retirement activity than a job.
Just as employers have had to learn how to maximize the productivity of new generations of workers, with policies such as "casual Fridays," they must do the same for older workers. "Employers just need to recognize the differences in motivators at various points across the years of employment," the report states. "HR innovations can be very effective in supporting longer working lives."
The Long View
One "innovation" is simply taking a long-term view of your company's workforce needs. Don't try to precisely forecast specific jobs from year to year. Instead, focus on your long-term goals over the next five or ten years. It's nearly impossible to predict specific job skills that will be required in the future. Also, think in terms of how you'll fill and retain workers in broad "job families" and where older workers will fit into the big picture.
The GSA report suggests these tactical approaches to consider:
- Invest in older workers today to maintain their productivity through training, workplace adaptations and internal transfers.
- Recognize the shift of careers from upward to horizontal, such as into an advisory capacity, or downward as people want to contribute in less demanding positions.
- Create performance-based compensation structures that are independent of age.
The GSA concludes, "By leveraging an aging population in the 'longevity era,' economic growth can be enhanced now and continued into the future." Contact your HR and payroll advisors to help your business capitalize on today's older (and possibly wiser) workforce.