Some of the most productive workers today are those 55 and older. Gen Xers and Baby Boomers provide deep subject matter expertise and tribal knowledge important to an organization’s culture, performance and cohesiveness. With talent scarcity a chronic challenge for the global economy, retaining those nearing retirement should be a priority for most businesses.
Companies have plentiful reasons to encourage experienced talent to remain in the workforce: older workers are less likely to job hop than Gen Z and Millennials. Those 55 and older are also important contributors to a diverse, multigenerational workforce, which a majority of companies say is a key to growth and long-term success. But, managers also have a role to play in reducing bias in the workforce against older colleagues. Recent research from Randstad in Belgium suggests that 1 in 3 people think older workers need more time to learn new things, yet older workers feel more motivated and less bored than their younger colleagues.
Organizations benefit from a diverse workforce
Society’s need for older workers
Randstad’s 2023 Workmonitor survey of more than 35,000 workers around the world found that rising prices are forcing some to reconsider retirement. This reaction was shared across all generations with those 55 and older feeling it the most with 26.4% not able to retire when they’d like. Even so, the majority of respondents believe they can still retire before 65, with a plurality figuring they will step away between the ages of 65 and 69. An overwhelming majority say their financial situation will dictate their decision.
While many prefer to retire earlier than they can, the global workforce needs them. According to the OECD, not only do older workers help mitigate growing talent scarcity, but their experience, skill sets and organizational knowledge contribute to business performance. Companies that have a 10% higher share of workers aged 50 and over than the average are 1.1% more productive, research has shown. The OECD also found building a multigenerational workforce also yields a stronger pipeline of talent, increases resilience and improves workforce continuity, stability and the retention of knowledge.
Across the world, people are living longer even as birth rates have declined for the past two decades, according to the International Monetary Fund. This is leading to a set of economic and social challenges that necessitates longer careers. More retirees means a greater social burden for those who are working. At the same time, talent scarcity will grow and restrict growth.
By encouraging more people to stay in the labor market, even by a year or two, economies stand to reap a myriad of social and economic benefits. For example, at its current spending level, Social Security won’t be able to fully pay benefits by 2033. Some estimates suggest raising the retirement age in the US to 70 could reduce the deficit by a third.
There are gains for employees as well. Working longer provides an opportunity to grow their retirement savings while utilizing private healthcare services instead of Medicare or other government-provided programs. Moreover, meaningful work and constant learning can help reduce depression, loneliness and instill purpose. In fact, Randstad research shows that about 2% of those surveyed said they prefer not to retire at all.
How can employers help?
While policymakers can enact changes to the retirement age, it may not have to come to this if employers incentivize their people to stay longer. By catering to their lifestyle, providing resources specific to their needs and offering rewards commensurate with their talent and experience, companies can persuade many Baby Boomers and Gen Xers to delay retirement.
For instance, offering accommodating hours and remote work are appealing to those who want their jobs to flex around their lives rather than the other way around. Shorter work shifts, options to switch to part-time and temporary arrangements are a few effective options. Most importantly, companies should always foster an inclusive work environment that appreciates and values the contributions of all workers. Doing so ensures each individual, regardless of age, is part of a diverse and rich culture that is the hallmark of a high-performing organization.
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