"Aging workers who opt not to retire present their employers, as well as incoming generations of younger workers, with unprecedented challenges and opportunities."
Life expectancies have risen sharply in recent decades, from an average age of under 53 years in 1960 to 72 years in 2017. And in high-income countries, the average life expectancy is closer to 80 years of age.1
Given longer lives and longer work lives across the globe, fewer people today are adhering to a career model defined by three key phases of professional working life: school, work and retirement. Instead, a multistage life is increasingly common — one in which individuals may go in and out of the workforce, work part time or join the gig economy, and get new training or credentials in midlife or later.
As workforces live longer and delay retirement, employers are struggling to evolve models, practices and policies that align with this new reality. To permit people to extend working life and remain productive into older age, employers must become "age ready" — or risk losing out on the benefits this growing segment has to offer.
Another important factor is ensuring these employees are not victims of age discrimination — a common prejudice that often goes overlooked even in organizations committed to employment equity and that embrace the most comprehensive Diversity & Inclusion strategies.
A Global Workforce of Experienced Employees
Mercer's "Next Stage: Are You Age-Ready" report reveals that, though populations across the world are living and working longer, the Asia Pacific region is feeling the greatest impact from a rapidly emerging generation of experienced employees.
In fact, the report states that there will more than 200 million people age 65 and older between 2015 and 2030. Japan is becoming the world's first "ultra-aged" population, where those over 65 years of age will comprise more than 28% of the population. Hong Kong, South Korea and Taiwan — designated as "super-aged" populations — are not far behind, with more than 21% of their citizens soon becoming 65 and older.
Increasing life expectancies have forced mature employees to face some difficult decisions. While many continue working out of a desire to learn new skills, connect with others or satisfy a desire to contribute to society, some aging workers don't have that choice. Instead, these employees continue working simply to finance the costs of their extended lives.
Getting older is expensive, and weakening pension systems, poor savings habits in a context of inequalities in income growth, and low interest rates have all conspired to undermine the security once taken for granted by those nearing retirement age. Aging workers who opt not to retire present their employers, as well as incoming generations of younger workers, with unprecedented challenges and opportunities.
Dispelling Preconceived Notions and Biases
Though workplaces around the world have greatly improved their efforts to curtail discrimination related to an employee's race, sexual orientation and gender, efforts to address age discrimination are often overlooked.
Here are some of the most entrenched and damaging myths concerning seasoned employees, according to Mercer's Next Stage report:
1. Myth: "Experienced workers are less productive."
Truth: Extensive research dispels the myth that job performance declines with age.
2. Myth: "Experienced workers have difficulties learning new skills and technologies."
Truth: The hurdle here is not that these workers have difficulties learning new skills, but rather they often haven't previously received the training necessary to advance certain skills or knowledge. However, research shows that 85% of workers, including experienced employees, actively seek opportunities for skills development and technical training to enhance their career development possibilities.
3. Myth: "Experienced workers are more costly."
Truth: Pay can be higher for increased age (and responsibility) but older workers can significantly reduce costs for employers in other ways, like through reduced turnover rates. In Mercer's data, some drop off in pay for the same level of job is experienced as workers age.
Mercer's penetrating research and analysis on the productivity levels, learning intent and capacities, and employer expenses related to experienced workers reveals a much more nuanced and complex relationship between older employees and their younger colleagues. Even in study cases where older workers did show lower individual productivity levels, the assessments did not account for key nuances, such as the time dedicated to mentoring, training and guiding others instead of focusing on their individual performances.
Expanding the Value of Experienced Employees
Businesses must learn to capitalize on the talents, skills and potential of mature employees who are postponing retirement. Mercer's Global Talent Trends 2019 report states that the integration of modern technologies into corporate HR systems presents older employees with powerful tools that can teach them new, valuable skills. In addition, these technologies provide them with curated career development paths using specialized learning functionalities and predictive software algorithms.
Corporate learning platforms can be used to shape content relevant to a particular ambition, close a skills gap or build connections among peers who can share expertise. Curated learning programs also allow employees to develop at their own pace and earn credentials based on benchmarks determined by personal career objectives.
Professional development opportunities for experienced employees are also limited by many employers' inability to accurately assess the value and scope of their contributions. Mercer's Next Stage report argues that experienced workers can contribute significantly to organizational performance through their deep institutional knowledge, social capital specific to the business and technical or content expertise honed from years of on-the-job practice.
Also, critical soft skills, such as listening, communicating, collaborating and team building, are commonly undervalued. Businesses that rely on common proxies for performance, such as performance ratings, promotion probability and pay, are likely to under-appreciate the contributions of their experienced workers and miss opportunities to better leverage their work.
By maximizing the value and potential of experienced workers, employers can create new professional development opportunities that leverage these workers' experience, expertise and life-knowledge. With age comes wisdom. When empowered, experienced employees can lead their companies into the future — guided by their invaluable experience with the past.
1. "Life expectancy at birth, total (years)." The World Bank, 2017, https://data.worldbank.org/indicator/sp.dyn.le00.in