Boomers May Be Key to Future Economic Growth
By Tracy Godfrey, HR Professional and VAN Leadership Group Member
With U.S. unemployment hovering around 8 percent, it is hard to believe that businesses and nonprofits may soon face a shortage of workers. But demographic changes in the coming decades will lead to major changes in the workforce. Older, experienced workers could be the key to fueling continued economic growth. It is becoming increasingly clear that making the most of mature workers is “good for business.”
Last year 30 percent more people turned 65 than the year before. This trend will continue for at least the next twenty years. The U.S. Bureau of Labor Statistics (BLS) projects that from 2010 to 2020 those 65+ will be the fastest growing part of the labor force, up 75 percent. In contrast, the number of workers age 16 to 24 will decrease by 7 percent. By 2020, nearly 25 percent of the workforce will be 55 or older.
As employers compete for workers to fill increasingly demanding needs, those that develop strategies to attract and maximize mature workers will find themselves a step ahead.
Work in Retirement
The pool of mature talent is growing. As Marc Freedman pointed out in his book, “The Big Shift,” a new stage of life has emerged. Those turning 65 today can expect to live another 15 years or more and almost all of those years will be active and healthy. According to a 2011 Sun America poll of adults aged 55 and older, “almost two-thirds (65 percent) say they would ideally like to include some work in retirement.” For employers to take advantage of this growing pool of ready and willing talent, they will need to develop new approaches and think differently.
Understanding What Drives Older Adults to Work
Employers need to understand what drives older adults to continue to work. Financial considerations come into play, of course. According to the 2012 Employee Benefits Research Institute (EBRI) Retirement Confidence Study, boomers have made gains in preparing financially for retirement; but it showed that more than 40 percent of boomers were still at risk of not having adequate retirement income. Working longer and pushing out a decision to retire will be a necessity for some.
But it’s not just about the money. Other factors are also important drivers for older workers. AARP found this in their 2008 Work and Career Study:
“Although workers ages 45 to 74 are most likely to point to the need for income when asked for their single most important reason for working, they tend to mention the intangibles rather than pay or compensation when asked to describe their “ideal job.” Some of the most commonly cited features of the ideal job relate to the nature of the work, relationships in the workplace, and the work environment…. Clearly, when workers visualize their ideal job, non-financial characteristics come to mind most frequently: characteristics such as friendly and respectful relationships, satisfying work, and opportunities for growth and development.”
Many mature workers want to be “working on purpose”—making a difference in what they do. They are seeking environments where they can find social connection and be respected for their contribution. They may want to work hard, but are seeking more flexibility and say in how, when, and where work is done. And they want to be paid fairly for the work they do.
Changing Nature of Work
The nature of work itself is changing, and employers can leverage these changes as they craft strategies to make the most of mature workers. Technology has revolutionized work—from the farm field to the factory to the consultant’s cube to the home office. It has increased productivity and made work less labor intensive. Mass production and uniformity are less the norm now than customized solutions and unique contributions. Dramatic changes in communications technology and the Internet have opened new options for work design, such as telecommuting, virtual teams, and globalization. Work can be redesigned and “modularized,” allowing for more part-time, seasonal, or on-call jobs
Creative employers are finding ways to make these changes work to their advantage. Companies are implementing work options such as job redesign, project assignments, cross-training, job rotations, repositioning to make best use of skills or phased retirement. Deloitte is an example of one employer thinking differently about careers, introducing corporate lattice™, an approach that allows the choice to “dial up,” “dial down,” or move diagonally. This is set up for all employees, but makes particular sense for mature workers.
Flexible scheduling offers real promise. Companies are finding ways to retain older workers and get the most from their skills through compressed work weeks and part-time, on-call, or seasonal positions. Companies are reaching to outside firms to tap the talents of mature workers for short-term assignments, interim leadership or as expert consultants.
A shift in thinking is taking place, and a movement has begun. But more can be done. The June VAN Forum will provide some perspectives on how making the most of the mature workforce is good for business and, hopefully, generate ideas to do more.
Making the most of the mature workforce really is “good for business” in the broadest sense:
- It’s good for employers. They continue to get productivity from experienced and educated workers, fill skills gaps, and benefit from the historical perspective and wisdom older workers bring.
- It’s good for employees. They gain financially by delaying drawing on Social Security and pensions and by boosting retirement income through savings. In addition, those who keep working are likely to be healthier and have a source of social connection.
- It’s good for government. Having mature workers working longer reduces Social Security payouts, generates tax contributions, and may reduce public health care expenditures.
- It’s good for society. Active, engaged mature workers contribute to the local economy, create new enterprises, and make a positive impact on the community.
Additional Resources About Work and Older Adults
Just Add Seasoning: A Business Case for Tapping Mature Talent (pdf)
CAEL, February 2012
Older Workers: Opportunities and Challenges
Urban Institute, Richard W. Johnson, July 2010
Myths and Realities about Working Longer
Working Longer: The Solution to the Retirement Income Challenge
Alicia H. Munnell and Steven Sass
Munnell and Sass are authors of Working Longer: The Solution to the Retirement Income Challenge published by the Brookings Institution Press.
12 Benefits of Hiring Older Workers
Looking for dedicated, focused, loyal employees? Your search is over.
www.entrepreneur.com, September 20, 2006