Jobs and the Future of Work

Could the era of longevity be a powerful source for growth?

Beyond the 'traditional' retirement age: A report from the global insurer Allianz has stated that 30% of the global workforce will be aged 50 and older by 2050.

Beyond the 'traditional' retirement age: A report from the global insurer Allianz has stated that 30% of the global workforce will be aged 50 and older by 2050. Image: Unsplash/Ave Calvar

Delphine Bourrilly
President and Managing Partner, Kearney
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Future of Work

This article is part of: World Economic Forum Annual Meeting
  • We’re moving into an era of longevity in which more people stay active in the workforce beyond the 'traditional' retirement age.
  • In response, governments around the world have been raising retirement ages and taking other measures that mean more employees will remain active for longer.
  • A report from the global insurer Allianz has stated that 30% of the global workforce will be aged 50 and older by 2050.

How are your retirement plans coming along? Perhaps you're counting down to 'R' day or even planning to exit the workforce early. If so, you might soon be in the minority.

We're gradually moving into an era of longevity in which more people stay active in the workforce beyond the 'traditional' retirement age – because they still want to create value and because they have the health and energy to do so.

Retirement and retention are going to become more prominent considerations for all organizations. The United Nations (UN) has predicted that the number of over-65s will more than double from 2021 levels by 2050. Moreover, birth rates are trending down as life expectancy increases. A report from the global insurer Allianz has stated that 30% of the global workforce will be aged 50 and older by 2050.

Global workforce population is aging.
Global workforce population is aging.

In response, governments around the world have been raising retirement ages and taking other measures that mean more employees will remain active for longer. In France, for example, the state age for retirement has increased from 62 to 64. At the same time, the rules around access to unemployment insurance are being changed to incentivise corporations to keep people employed for longer.

A new tension over tenure

The net result of these changes is that many early career workers today will fall into the 30% cohort by 2050. And, with fewer younger colleagues following them, they face a longer employment future in which voluntarily retiring at 55, 60 or even 65 is increasingly rare.

This presents leaders with a new tension over tenure and several challenges that they must overcome, such as:

New career paths that reflect changing demographics and decisions. The traditional professional route of ascending the ranks until there is no 'N+1' to step into will no longer provide enough flexibility. Entering a job or profession and staying put until retirement age is an equally unlikely proposition. Rather than the career ladder, we'll be talking about the career lattice, in which individuals move in multiple directions – up, down and sideways. General Motors and Boeing already have 'returnship' programmes that allow retired workers to engage in productive but less demanding activities.

• Different working patterns, where career breaks, pauses and restarts are more commonplace. Organizations could learn from sectors where fixed work-leave schedules mean not everyone is required to be on the job at the same time, like the emergency services, healthcare and airline industries. The current 'gigification' of work could also work in employers' favour by progressively bedding in a core of freelancers who are used to staffing ad-hoc, task-based projects as needed.

• Expectations around knowledge management and knowledge transfer will have to change if organizations are to keep building crucial skills, experience and practical abilities. Lifelong learning will take on new meaning as workers continually refresh their capabilities and pass on their own experiences to others. A 'licence to operate' via credited training hours, similar to what exists in the medical profession, and a rotational approach to jobs could both become more familiar.

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Broader considerations for businesses

Employers will also have to wrestle with challenges ranging from managing a new generational culture mix to which health and wellbeing provisions and adaptations are needed for an ageing workforce, how the employee value proposition needs to evolve, and the ever-thorny issue of inclusion.

Then there’s the real brass-tacks question of who bears the burden (financial and otherwise) of making all this happen. Because we are not talking about a few surface-level changes, it’s a profound transformation of work.

Legal and fiscal frameworks also have to evolve. For example, governments cannot arbitrarily continue to raise the pension age and expect corporates to absorb the cost. It’s the old trade-off between accepting a level of inefficiency in the workplace to avoid the societal consequences of poverty and unemployment. This will require an even more delicate balancing act in the future, with investors and shareholders also playing their part.

We must also remember that ageism remains a real problem, both within and beyond the labour market. Negative stereotypes about older workers persist, meaning they find it more difficult to find new jobs or to return to the workplace after a break – perhaps to raise a family or look after relatives in need. Paradoxically, just as they have more time for work, many find they have less choice over what that means.

Older workforce: drain on resources or a powerful source for growth?

But will having an older workforce hold all organizations back by default? Not necessarily. For one thing, better healthcare and nutrition have not only added to the average lifespan but have also extended the average health span – or how long we can expect to live without the chronic diseases and disabilities typically associated with ageing. There’s also an economic incentive. One study found that building age-diverse workforces and giving older workers more opportunities to work could boost GDP per capita by almost 19% over three decades.

Another benefit is really knowing your audience. Because an older population doesn’t only mean more elderly employees, it means more elderly consumers – and who will understand their needs and desires better than people in the same age bracket? Imagine a world with more origin stories like OXO’s. The firm’s founder, Sam Farber, was inspired (aged 66) to create a new range of kitchen utensils when he saw his wife struggling to hold a vegetable peeler because of her arthritis.

Getting to grips with an entirely new age profile in the workforce might be a much bigger and more daunting endeavour. But leaders needn’t think they must set off from a standing start. Initiatives such as Living, Learning, Earning Longer, the World Economic Forum’s collaboration with AARP and the OECD, are ready to point the way.

As AARP says on its website, age inclusion could be “a powerful source for growth” – so long as companies are willing to overcome ageism. Given adequate attention, and the right mindset, we could just make it happen.

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