“Life starts at 66,” sang Udo Jürgens in his popular 1970s tune about retirement. While he would probably have to revise the age upwards by a few years now, the lyric title still seems relevant.
Many developed economies are facing an inverted age pyramid: people are living longer and the number of older people increasingly outweighs the size of younger generations. As a result, retirement ages are rising. Reaching 50 used to be a milestone, marking the sunset of your working life. Now, it’s more of a halfway point.
A growing portion of society is continuing to work for many years after clocking up half a century of life. In the United Kingdom and the United States, the biggest increases in overall employment are among people in their mid-60s and beyond.
Fighting over talent
According to the UK Government Office for Science, more than 12 million people will leave their jobs to retire between 2012 and 2022, but only 7 million will start work. With birth rates staying low, talent pools are shrinking across the globe. According to a new survey by ManpowerGroup, 40% of global employers are struggling with talent shortages, and more than half are looking to train and develop internal candidates as a solution to filling their vacancies.
Employers in the Asia-Pacific region have the greatest problems with recruitment. In Japan, 86% of companies are struggling to fill positions. It may be coincidental, but Japan is also the country with the highest life expectancy, according to the World Health Organization.
Stretching the talent pool
One approach is to hire extremely experienced people, as some companies in the UK have realized. They are actively developing older staff to cover skills gaps, as the Guardian reports. As a result, workers tend to keep working well beyond their official retirement date.
For some, it's an opportunity to move into roles with more responsibility. As the Wall Street Journal reports, fewer older people are falling into low-income jobs such as bus driving or cleaning. With a similar standard of education as younger generations, these baby boomers have the advantage of experience, and this is increasingly winning them jobs despite their age, according to research undertaken in the US. Furthermore, people over the age of 50 now enjoy better pay, work-related benefits and working conditions than previous generations of older workers. They are no longer seen as cheap labour.
While there can be professional prejudice towards older people, academic studies show that there is virtually no link between age and job-related performance. Rather than being seen as forgetful, slow or out of touch, generalizations often internalized by older employees themselves, older people are forging reputations as reliable and productive.
The fact that 50 is still the prime of a person’s career is also reflected in the growing share of older entrepreneurs. Starting a new business may have become virtually synonymous with bright young things straight out of university. However, in 2015, nearly a quarter of entrepreneurs who launched new businesses in the US were aged between 55 and 64; nearly 10% more than in 1996.
These are people like William Agush. In 2012, having worked in the technology sector for over 30 years, he was told that the enterprise he was contracting for would no longer need his services. So, in his late 50s, he decided to launch his own start-up, raising more than $2 million in venture funding.
Given the changing demographic make-up of many developed economies, we may well see a new form of retirement emerge: one that starts later, is a great deal less sedentary and by no means rings in the sunset of life. However, businesses and policy-makers will need to adapt employment frameworks more proactively to reap the benefits of this trend.