The opportunities of an older workforce
Ageing is often seen as a burden for economies. While it is true that changing demographics pose a challenge, they are also a source of opportunity.
Older workers can make important contributions to productivity and growth if employers recognise their value, adopt the right policies and establish a supportive culture in their organisations. In such an economy, growth will be sustainable and broadly inclusive and older individuals, and those who depend on them, will enjoy greater financial security. Companies will be stronger due to the maturity, stability, skill and institutional knowledge of long-time employees. We all will benefit.
It is not hard to understand why some of my fellow economists are worried about the ageing of the workforce. People over 65 currently represent 8% of the world population. By mid-century, that figure will more than double to about 17%.
Countries around the world are experiencing a significant change in the ratio of workers to retirees, putting pressure on national retirement systems. In addition, millions of adult workers–many of them women–are struggling to balance their duties on the job with efforts at home to care for elderly parents. In many cases, these same workers are part of a “sandwich generation” that still supports dependent children (some in their 20s but unemployed).
Yet the notion that ageing will derail future growth is a fallacy. There is a great deal we can do to optimise the potential of an older workforce. Three policy areas are available to steer the economy through the demographic challenge that is now unfolding.
First, provide support for employee caregivers. Millions of workers face competing demands to care for loved ones while attending to their duties on the job. Time needed for caregiving can conflict with tasks required by an employer. It also undermines individual financial security (a study found that caregivers who leave the workforce after age 50 lose more than US$300 000 in income and benefits on average). Caregiving responsibilities are one reason that workers may retire sooner than they planned. Workplace rules that make room for caregiving, including leave policies, can help caregivers hold on to their jobs and contribute to the broader economy.
Flexible workplace policies are a second policy area. Older workers may face various pressures that affect their ability and desire to stay on the job, including personal health issues. Flexible scheduling, telecommuting, phased retirement, wellness programmes, family leave and paid sick days can add years to a worker’s tenure. Employers benefit from reduced turnover, lower absenteeism and the know-how that is often possessed by experienced workers.
Training and education are the third policy area. Employers have a legitimate need to make sure their workforce is up to date on technology and best practices. And employees have a duty to keep their skills competitive, and to recognise that change is inevitable if not always easy. But most employers can do a great deal more to keep their workers up to date by providing training and development opportunities to workers of all ages.
Unfortunately, these types of policies will not be implemented on the scale required until employers–and the public–recognise the value of older workers. We should address more firmly the problem of age discrimination, which is harmful and widespread. Strict enforcement of fair employment rules is critical, but we also need to transform the culture of the workplace.
Education and advocacy to dispel unwarranted concerns and stereotypes about older people are needed to establish a culture that enables workers of all ages to thrive. AARP plays a leading role in this effort, both in the US and to some extent in other countries. For example, we sponsor an awards programme called “Best Employers for Workers over 50”, and cite companies around the world. These are employers that recognise the value of their older workers. They make an effort to retain, train and recruit them. Winners have included a German automaker, a British retailer, a Japanese industrial equipment manufacturer, a Malaysian consumer products company and an Australian bank.
We also are circulating an employers’ “pledge” in which companies vow to be fair to older workers and job applicants. This effort now has 260 signatories and continues to grow. The pledge is part of a broader effort called Life Reimagined for Work, which supports older job seekers with guidance, tips, contacts and tools to get ahead.
One way national economies prosper is through the entrepreneurship of citizens, and this is yet another area in which older individuals have a great deal to offer. Individuals between 55 and 64 were responsible for almost one in four US business starts in 2011. AARP works with the US Small Business Administration to provide counselling, mentoring and other resources to older entrepreneurs, an effort that has reached more than 119 000 people.
While different societies may need different strategies, all countries with ageing populations will benefit by investing in efforts that help keep older workers productive. It is vital that countries embrace this opportunity. The longer individuals are able to stay in the workforce and contribute to the economy, the greater the benefits for everyone.
Debra B. Whitman, Executive Vice-President for Policy, Strategy and International Affairs, American Association for Retired Persons (AARP)