The New Aging Workforce: A Different Perspective and Implications for Organizations
Updated: May 14, 2021
Prior to the Corona Virus Pandemic or "new normal" as it is has come to be called, a key segment of the workforce, the Baby Boomers experienced a pretty extensive and productive career/professional ride that some see as coming to an end. The baby boomer is known as that generation that was born between 1946 and 1964 or as of 2019 were between the ages of 55 and 73. The reality is the world is aging, but this does not necessarily mean this segment of society and workplace are done working, contributing, living, living for a purpose or for their legacy, and/or looking to park themselves in a rocking chair anytime soon. A segment of this group is looking to continue working for a variety of reasons that will be addressed later.
Before we look deeper at how this segment of society and workplace is changing, adapting, and changing expectations, we need to understand what they have been through while working. While sometimes, biases are associated with the Baby Boomers such as that they are locked in their old ways, perhaps not tech savvy, not as productive, or resistant to change, the truth is they have been through numerous changes during their career and life.
Baby Boomers have experienced downsizing, rightsizing, outsourcing, and have been ranked against their colleagues. Through all of this organizations and its leaders tried to create an environment of empowerment, now engagement, and soon Jacob Morgan writes that organizations will need to embrace a great workplace experience.
While these changes occurred, the expectations from employees of their organizations and leaders have evolved. Employees are looking for more then just a paycheck. They are increasingly looking more so for a purpose; however, many organizations have not adapted to these changing expectations. In order to better understand this segment of work and society we need to understand what is occurring around them. This segment of society is not existing in a vacuum, but has been affected by changes that have occurred and continue taking place.
As we look at the New Aging Workforce, we need to better understand what is going on around them, in society, and workplace with implications for the future. They have faced an enormous amount of change in their careers, experienced technological changes along with everyone else; worked through the increasing skills shortage up close and personal as they've had to take on additional roles and work extra hours due to not enough staff; and have seen the workforce begin to change with a younger and more diverse workforce. The following highlights these changes.
As we address this "New Aging Workforce", we need to understand what they have been through. It is true that they have been through a lot of change that included the above mentioned. But the reality is that many of the organizations they grew up with or around have either disappeared or replaced by new ones that in some cases did not exist before the year 2000. Most grew up with organizations like Montgomery Wards, Blockbuster, and Circuit City to name a few. Circuit City was once published in the book Good to Great as a company for others to look to as a model. The fact that it no longer exists just highlights that greatness today does not guarantee existence tomorrow. Today, there are organizations that did not exists prior to 2000 such as LinkedIn, Amazon, Facebook, Pandora and others. There are business models that did not exist before and taken the Gig economy to a different level with organizations like Uber and AirBnB to name a few. So for a variety of reasons organizations and in turn the Baby Boomers have had to adapt and change.
"Technology is best when it brings people together." Matt Mullenwig
One of the reasons for these changes, is the accelerated growth of technology. To put it in perspective it took the radio 38 years and the TV 13 years respectively to reach 50 million users. Today, there are more mobile devices, 9 billion on the planet then there are people and this is expected to at least double this year.
This is now being enhanced by artificial intelligence (AI). It is expected that AI will outperform humans when it comes to translating languages and driving trucks among other areas by 2030. The concern by some is that AI will create massive unemployment; however, if history is an indicator, when the PC came on the market, it eliminated 3.5 million jobs, but created almost 20 million. Technology continues to change how we work and this has recently been seen now more then ever through the Pandemic and those that have continued to work remotely.
What is also facing organizations as baby boomers consider what to do with their next chapter in their lives, is an increasing skills shortage. Presently, 20 million baby boomers are expected to retire in 2020. There is a 500,000 IT shortage, 700,000 nursing job vacancies, over 350,000 manufacturing jobs shortage, and 200,000 construction jobs going unfilled among others. This has forced organizations like Home Depot, Amazon, AT&T among others to invest in a reskilling initiative estimated at over $1.5 billion.
While some might believe there is a bent up demand for IT skills, this is only partly true. Yes, technology will change how and where we work, it already has and will only continue. But while organizations will need to invest and grow their AI capabilities, they will also need to retool their workforce. Human skills will continue to grow in need and demand, while administrative and redundant type of work will be outsourced to technology. The human skills are something that Baby Boomers have had to hone throughout their work lives. These are the skills needed now and into the future. A recent study highlighted the top ten skills needed for 2020, all of them being interpersonal skills which recent graduating students seem to lack.
"Young people need to be asked what matters, not be told what matters." Jeff Martin, CEO & Founder of Tribal Brands, Inc.
There has been for sometime four generations in the workforce. But the two that have received the most discussions in diversity workshops, graduate classes, and writings are the Baby Boomers and Millennials. One of the reasons for this is that the Millennials has become the largest segment of the workforce. They are in essence are the future of society, organizations, and workforce. Much has been discussed and debated on regarding stereotypes of this segment of the workforce. They come into the workforce, raised by Baby Boomers, with different expectations of work, organizations, and its leaders.
Interestingly, in a past study that consisted of over 6000 Human Resource (HR) professionals and Millennials on how they felt about certain issues. Some of the areas looked at was the use of technology, 35% of Millennials thought they were tech savvy while 86% of HR professionals thought they were, and when it came to loyalty, 82% Millennials felt there were loyal while only 1% of HR professionals believed this.
This is also occurring while the Millennial workforce is increasingly much more diverse. This group's primary make-up is 44% Latino, 35% African American, 30% Asian, and 27% White. So the future of the workforce will be increasingly diverse. These different perspectives highlight the challenge that organizations face as they try to recruit, retain, and develop their Millennial workforce. More importantly it also raises how organizations should position themselves in order to create an inter-generational philosophy, unbiased practices, and organizational culture in order to truly create an inclusive and great work experience.
While many look at the growing Millennial segment of society and workforce, especially in the U.S., this might lead them to believe that there is a large younger world, when in reality the world is aging.
In the year 2000, only a small portion of the world had 20% of its population over the age of 60. This small segment of the world is expected to grow to pretty much most of the world by 2025. Dr. Shervani highlighted in his research that the magic number for the workforce replacement going forward is 2.1. This includes births, deaths, immigration, and emigration. Unfortunately, only two countries in the world have a higher rate, and this is Mexico and India. Others such as China, Japan, Germany, and Spain are way below at 1.4. The U.S. is at 2.0 and what is helping it is ironically not only the growing Millennial workforce (which is more diverse), but immigration. This is further highlighted in a study by the Boston Consulting Group that can be seen in the Ted Talk on 2030 workforce Crisis by Rainer Strack.
In essence, for every two experienced workers leaving the workforce, only one (relatively inexperienced) worker joins it. So what does this mean for the Baby Boomer generation, workforce, this segment of society, and the workplace? What should organizations consider with all that is happening while the Baby Boomer generation ages and becomes a larger consumer base? Lets take a look at this.
As the population ages, organizations of the future will no longer be able to rely just on the younger workers.
As highlighted earlier, the world is aging. Over the next 20 years 80% of the workforce growth will be over the age of 50 with 70% expected to continue to work after retirement. To put things in perspective, one of the main reasons for this is that in the 1900s the average life expectancy was 47 and in 2011 it was 80. Another reason for this is lack of financial preparation for retirement years while many just want to keep busy while they are still healthy. One other reason is for health care, especially in the U.S. An example of this is now during the Coronavirus. Earlier in the pandemic, an estimated 3.5 million Americans lost their health care when they lost their jobs, while for 18 other countries the number was zero. Something for the country and organizations to reconsider as we move forward.
Presently, for every two experienced workers leaving the workforce, one inexperienced worker joins the workplace. This sets up organizations for a dramatic brain drain. What makes matters worse is that only 4% of organizations have a plan to retain the older workers, only 15% of organizations have a strategy focused on the aging workforce, and 72% of HR organizations have indicated this is a problem, but have no plan in place. Why? If organizations see this as a problem or an opportunity, should they not be addressing this? Einstein has been credited with the following quote, "the significant problems we have cannot be solved at the same level of thinking with which we created them.” This is why organizations need to address this proactively, systemically, and comprehensively.
Organizations, its leaders, and their HR departments need to accept the fact that the old retirement work model is no longer a valid model. The traditional work stages of the 20th century usually consisted of early career (around 25-35), mid (36-50) and late career (51 until retirement, usually around 60 or 65) is not relevant today. There is now a new segment known as Legacy Career which spans from 50-75. Bottom line, mid-career has not lengthened, but rather a new career phase has emerged. This is driven by the longer living and aging workforce, changing expectations of work and contributions, financial reasons, changing expectations of work, and a potential brain drain.
There are too many biases against a variety of groups in the workforce. For the baby boomers here are four that seem to be more prevalent.
The older worker costs too much. The research does not back this up. The experience and value that an older worker brings is sometimes difficult to quantify. In addition, from a pragmatic perspective, usually the older worker is enabling and helping the new and younger employee get up to speed within their organization when they first join.
Training an older worker is not a good investment. The usual assumption is, "you can't teach an old dog new tricks" or they will not be around long enough for the organization to get their ROI for the training investment. Lifelong learning does not have a shelf life. And if we consider the skillset shortage highlighted earlier, ongoing learning for all, irrespective of age is going to be a good investment for organizations.
Older workers are less productive. Again little research (if any) to support this. Here is a different expectation that organizations and its leaders need to consider. The baby boomer may not be looking at a 30 year career, but instead at what they can contribute as part of their legacy. They can be tapped into for their expertise, experiences, knowledge sharing, mentoring, and insights gained along their life long career. Boomers have seen a lot of change along the way that include things that worked and did not.
Performance management is different for the older worker. Why and who says so? The older worker is not looking for some special AARP preferential performance management treatment. They want what everyone wants. They want respect, on-going developmental coaching and feedback, and appreciation. Only ineffective managers who are not comfortable with performance management might believe this.
These biases are demonstrated in variety ways in different organizations. An example is the amount of marketing dollars spent on the different generations. Today 500% of the marketing dollars are focused on the younger consumer while only 10% is targeted to the older consumer. Why? The baby boomer, in particular those over 60 are expected to have over $1 trillion spending power, which if they were a country out of 193 countries in the world, they would be 17th in the world GDP wise. Organizations cannot afford to lose out on this consumer and workforce segment.
Recommendations & Considerations
The following are just the tip of iceberg. There is a lot more here to consider, but just planting some seeds for consideration.
Start by assessing your organization. Speak with your aging workforce, conduct focus groups, interviews, and surveys. Find out why they stay, what they are looking for, how they're leaders are treating them, how engaged do they feel, and how are they treated? Gain insights and ideas from them to try to implement in the organization. Try to really create a "great workplace experience" as highlighted earlier.
Reassess and dig into your analytics and find out what your workforce looks like, what skills you have in the organization, and what skills you will need in order to implement your strategies going forward. Don't just only look for how many are eligible for retirement. This is a glass half empty approach. Why not look at what skills do my older workers have and how does this enable our organization for success in the future? How do we take advantage of those skills, retain them, develop them? Bottom line ask new and different questions vs the traditional and past used ones.
Consider other compensation, benefit, and work practices. The HR practices and policies of the past should be just that, of the past. Consider part time health care benefits, part time work options, job-sharing, special assignment, bridge jobs (to retirement), and other creative progressive human capital practices. Remember health care is a priority for all, but especially for the older worker.
Traditional recruitment strategies should be revisited. How are positions marketed, where, and to whom? Ensure your recruiters are trained and held accountable for non-bias practices. Some of the bias behaviors are usually micro-inequities that some don't even notice or really mean. More importantly, your managers need to be trained and held accountable for ensuring their job postings appeal to everyone in the labor market with the needed skills irrespective of age.
Ensure your executive leadership is not only onboard, but has a human capital strategy that addresses how to use the baby boomers going forward as part of our workforce, vs the 20th century perspective of how many do we have ready to retire. Most senior leaders are usually baby boomers (depending on the organization and industry). Create a different strategic dialogue with this group in creating an inclusive workplace that can address the skills shortage and experienced workforce.
Develop organizational/individual accountability and reward metrics for all from senior leadership through front line leaders. This should be done to move the organizational culture in a more diverse and inclusive environment that welcomes and maximizes everyone's potential regardless of age or background.
The pandemic has pushed to the forefront virtual and remote work. Twitter just recently announced that its workforce will work remote permanently. This provides an opportunity for organizations to recruit and retain the best, irregardless of age and location. This means more work-life balance and organizations not having to incur the additional expense of relocation, of which most Baby Boomers would probably rather not have to do at this point in their life anyway. Organizations that take advantage of these changes, will be better positioned than its competition.
Treat this as a cultural change management effort. Communications, communications, and more communications will be key along with transparency. Remember, most resist change (and Boomers are stereotyped of resisting change) for three reasons. They don't understand it, like it, or like the person driving the change. Leaders are crucial here and yet only 8% of them are seen as being effective at listening and communicating. This will need some focus.
Maximize the basics such as appreciation. In the study by the Boston Consulting Group, they found that pay across the globe came out at 8th in what workers were looking for in their future employer. A good relationship with their boss, work-life balance, and good working relationships with their colleagues were in the top four, with appreciation, a "thank you" for a good job being number one which is all about organizational culture. Appreciation, thank you is free. Unfortunately, not enough leaders or organizations practice or provide this.
In summary, the organization, its leadership, and HR need to ensure they are driving a non-ageist and age-neutral philosophy and culture in the organization. Those organizations that truly embark on this journey with progressive policies, practices, transparency, and a comprehensive approach will truly become a "great place to work" for all irrespective of age and background. This is only the tip of the iceberg on a very complex and comprehensive human capital issue that all organizations need to consider. This is not the end, but the beginning.
Consider the following..."The excitement of learning separates youth from old age. As long as you're learning you're not old." Rosalyn S. Yalow
The end or really the beginning.