“Unretirement” and Other Effects of an Aging Global Workforce
Older folks are coming out of retirement and back into the workforce in droves, according to new research from Bain and Company. This is “a massive shift,” according to Andrew Schwedel, a partner at Bain and Company, which predicts that 150 million jobs across the world will shift to older workers by the year 2030.
This trend is largely based on a healthy job market, increasing inflation and the perceived waning of COVID-19 risk in the workplace, according to CNBC.
Most importantly, this shift begs the question—how will this aging workforce affect the labor force at large? In this article, we’ll explore this trend of “unretirement,” discussing what companies are doing to leverage older workers and empower them.
What is driving companies to turn to older workers for help?
Aging workers are valuable assets to companies and can help plug talent gaps and create competitive advantage using the deep skill sets of more experienced workers, but what exactly is causing this trend?
According to Bain and Company, it’s due to a plethora of reasons, including an aging global population, a lack of younger people in the workforce (likely due to Gen Zers choosing to pursue higher education over immediately entering the workforce) and slowing fertility rates. It’s for these reasons and more that countries all over the world have pushed their retirement ages higher in the last few years.
Japan is one such country that has been feeling this labor crunch acutely—and Japanese companies have taken some creative steps to fill the gaps. According to business journal Quartz, some Japanese firms are actively seeking folks above the age of 60 to fill gaps in their workforce, with some firms hiring folks of 70 or older.
In the Group of Seven countries (G7)—which includes the U.S., the United Kingdom, Germany, Japan, France, Italy, and Canada—over 25% of the workforce will be over the age of 55 by 2031. Japan is considered an outlier, projected to have almost 40% of its workforce over the age of 55 by the same year.
But beyond workforce needs, economic concerns and dwindling retirement benefits, some may be surprised to learn that almost half of those who come out of retirement choose to stay in the workforce for positive reasons.
Older workers are happy to keep contributing
The key to making good use of the elderly in the workplace is understanding their motivations for working. While younger folks overwhelmingly want to work because of monetary compensation, older workers come to the table with different motivations.
Some older, experienced workers say they simply desire to do “interesting work” and are motivated by autonomy and flexibility. Laure Falk, a partner at a search firm in New York City, says, “I still really enjoy mentoring people. I don’t feel ready to retire, I feel like I still have things to contribute—it’s not my whole identity but it still brings meaning to my life.”
Andrew Schwedel, partner at Bain and Company and spokesman for their research, told CNBC’s Squawk Box that “bringing older workers’ unique benefits to the workplace can strengthen workplace culture for everyone.”
Another important point to mention is that many folks were pushed out of the workplace during COVID-19, even if they wanted to keep working. The health restrictions kept them out of the workplace for years on end. With those restrictions now eased up, workers who were forced into retirement are now making their way back into the office space.
“Things have opened back up—and some people have realized that not only do they like the financial benefits of working, but the mental stimulation and social benefits as well,” said Judith Ward, who authored a report on “unretirement” for money manager T. Rowe Price.
The report notably cited that 48% of those who are coming out of retirement back into the workforce do so because of financial reasons, while 45% cited emotional and social benefits.
Marc Matsil retired to the bucolic Connecticut hills before realizing he still wanted to work. He returned to work as a teacher in a Connecticut school. “I have a cousin who is 84 and is still a VP at Chase,” Marc Matsil told Carrier Management News. “It’s way less about money than about keeping your mind active and enjoying being there.”
It seems that while labor shortages grip the world, there is no shortage of those who are willing to fill those roles—as long as companies are willing to adapt to the times. Unfortunately, many aren’t yet adequately prepared to empower older employees.
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