As global populations age, employers are faced with a stark choice: continue as usual and be hit by skills shortages and shrinking returns, or adapt their workplaces and business strategies to welcome, benefit and meet the needs of older workforces.
The world is in the midst of immense demographic change. Advancements in medicine and technology are allowing humans to be healthier, more productive and live longer at older ages than ever before, and fertility rates are lowering as individuals postpone child raising in favour of education and career advancement.
This has rapidly increased old-age dependency ratios – the number of individuals aged 65 and over (generally economically inactive dependents) to people aged 15-64 (working, taxable individuals). In the EU-28, this ratio stood at 30.5 dependents per 100 working persons in 2018, but is projected to rise to 38.7 by 2030, 49.9 by 2050, and 57.3 by 2100.
This shift is already greatly affecting the economy and society, and until recently, the conventional outlook was negative – how can today’s states and societies continue to function with such high numbers of dependents? Thankfully, however, opinion is changing. Older people are proving much more capable and willing to contribute to the creation of wealth compared to previous generations, upending traditional views of dependency.
For a time, increasing the retirement age was a popular solution, however since doing so affects all the same, regardless of need, this approach has fallen out of favour. Today, the private sector is viewed as holding the answer, and by tackling the problem, businesses are already unlocking significant benefits for themselves and wider society.
Many older people want and can work longer than in previous elderly cohorts, but this doesn’t mean they are competing for the same roles as younger workers. Priorities differ, with older workers caring less about advancement and remuneration, instead seeking greater meaning and a sense of purpose lacking from retirement.
What does this mean for employers? A ready, knowledgeable bank of individuals, increasingly technologically experienced, and both willing and able to share their skills and expertise. On top of this, aged workers have also been found more loyal than younger employees, reducing recruitment costs and enabling more reliable forecasting, and are more motivated, satisfied and committed to their work.
Away from the workplace, older people represent a significantly larger consumer cohort than before, owing to being healthy, economically active and technologically savvy. Their numbers are only set to grow: McKinsey projects the number of sixty-plus individuals in developed nations will grow by a third by 2030, but generate 51% of urban consumption growth. On top of this, as a cohort, older people will also hold the most wealth; an excellent opportunity for businesses that successfully pivot towards the aged.
With working environments already accommodating three to four generations, and this number set to increase, it is imperative businesses adapt in order to unlock the potential. Thankfully, the solutions already exist.
There are several ways in which company-facing activities can be altered to assist older workers.
Transformation isn’t just occurring in the workplace – demographic change is affecting markets too, with business shifts needed to leverage this potential.
Demographic change has already begun. Acting quickly is a crucial step towards unlocking the benefits of older societies, namely gaining business advantage from older employees’ value; their priorities, skills and experience. BearingPoint can help you take such forward-thinking action, creating sustainable solutions that don’t just aid your company, but societies across the globe.
Contact BearingPoint today to learn how we can help you transform your people and your business.