There are likely to be 150 million more workers aged over 55 by 2030, according to a new report which is encouraging companies to tap into their unique strengths and motivations.
Older works are likely to be motivated by more “interesting” jobs rather than financial compensation, the study by global consultancy Bain & Company found. It urged companies to provide programmes to support this growing demographic and help them become assets to organisations.
Before the age of 60, the average worker in developed markets is primarily motivated by good compensation. But as a person approaches that age, there's a tipping point: interesting work becomes the top job attribute, while autonomy and flexibility significantly increase in importance, it said.
“Populations are ageing; work lives are lengthening. Fewer young people are entering the workforce, due partly to lower fertility rates, partly to longer education,” wrote Bain analysts in the report, which surveyed 40,000 workers across 19 countries.
“A long-term trend towards earlier retirement is slowly going into reverse.”
In the Group of Seven nations, workers aged 55 or over are projected to make up more than a quarter of the workforce by 2031, Bain said, citing data from the US Bureau of Labour Statistics and the OECD.
Japan – already above that threshold, with older workers making up 28 per cent and 31 per cent of the labour force in 2011 and 2021, respectively – is expected to have the highest rate at 38 per cent in eight years.
Germany is the only other G7 country to have a quarter of its workforce made up of older people, with that exact proportion in 2021. Canada, France and the UK are not projected to pass 25 per cent by 2031, while the US and Italy will have hit 25 per cent and 32 per cent, respectively, by that time, the study showed.
However, this situation is not exclusive to developed countries. In China, the country's elderly population – 65 and older – will double by 2050, while Brazil’s percentage of workers over the age of 55 is creeping up to the mid-teenagers, Bain said.
And while leading companies tend to focus more on recruiting, retaining, reskilling and respecting the strengths of older workers, few of them actually recognise their changing needs and priorities, or invest in them, the report showed.
“Despite the shift, it’s rare to see organisations put programmes in place to integrate older workers into their talent system,” Bain said.
“The good news is that, with the right tool kit and mindset, ageing workforces can help employers get ahead of their talent gaps and create high-quality jobs that turn older workers’ skills into sources of competitive advantage.”
More older people have worked longer over the past 20 years, while the share of young workers has declined quickly, Bain said.
Rapid population ageing is pushing companies towards greater diversification of the age profile of their employees, and this raises questions about the effects of increased age diversity on business performance, according to the Organisation for Economic Co-operation and Development.
A key advantage of a multi-generational workforce is that it enables effective synergies between experienced and less experienced staff to the benefit of employers and employees, the Paris-based organisation said.
“Reaping these benefits will require putting in place tailored support at all ages and strengthening collaboration between generations,” the OECD said.
Its research concluded that age-diverse firms are lower in turnover and higher in productivity than benchmarks.
“Although this won’t sway everyone, we might add that creating roles for older workers, if your business allows for them, also seems like the right thing to do,” Bain said.
Governments are recognising the need to integrate older people into the workforce. In the UK, for instance, the retirement age has increased from 60 for women and 65 for men to 66 for both, with a plan to move up further over time.
In Japan, before a recent increase in the retirement age from 60 to 61, Tokyo struggled to push the official retirement age up, leaving firms to often solve the problem by releasing workers at 60 and rehiring them on new contracts, often at reduced pay rates.
Bain cautioned, however, that for the dynamic to work, both older workers and companies must find common ground.
“The absence of a growth mindset in an older worker might make them a weak candidate for employment extension,” Bain said.
“But companies need to design programmes that appeal. Older workers are motivated to participate when training helps to accelerate their pursuit of interesting work.”