By Paul Irving
The demographic age shift is generally
understood by now. In the United States, about 10,000 people turn age 65 each
day; by 2035, Americans of retirement age will for the first time outnumber
those who are younger than age 18. There is an awareness that population aging
will have a profound effect on institutions of all types—none more so than
companies feeling the impacts of shifting workforce and consumer demographics.
American companies are in a war for talent as
they search for advantages in an intensely competitive economy. Workforce
shortages are already a challenge in much of the developed world. One solution
is hiding in plain sight: hire and retain older adults. Not only are they
increasing in numbers, they are a growing source of experience and know-how. Research suggests
that older adults’ contributions and emotional stability enhance work
environments. Their complex problem-solving skills and nuanced thinking lend to
effective
workforce teams.
Discrimination, Ageism Persist
Yet despite their qualifications, older adults
are repeatedly turned away from job opportunities. Companies focus attention
on the recruitment and
retention of younger workers, who, according to recent polling,
often view older counterparts in a negative light. Job postings still reference
a maximum number of years of experience. According to a recent AARP
study, more than 60 percent of respondents older than age 45
reported witnessing or experiencing age-based discrimination in the workplace.
Why does this disconnect remain? There is
still a widely held view that older adults slow economic momentum by remaining
in the workforce too long. Pervasive ageism is exacerbated by age segregation
in business and the broader society. Many still believe that young people
should be in school, middle-age people should be at work and older adults
should be segregated into retirement communities, where they are seen, but not
heard.
The misunderstanding also extends to markets.
In 2016, Americans older than age 50 accounted for $7.6 trillion in direct
consumer spending and related economic activity and controlled more than 80
percent of household wealth, according to Oxford Economics
and AARP. Bank of America Merrill Lynch projects that the global
spending power of those ages 60 and older will reach $15 trillion annually next
year. The McKinsey
Global Institute concludes that the ages 60 and older
population is on track to generate half of all urban consumption growth in the
next decade.
Older adults dominate
spending in consumer goods and grocery stores, purchase more
new cars than any other age group and account for 80 percent of
luxury travel. Still, attitudes in many companies haven’t
changed, and marketers and manufacturers barely pay attention to the facts.
Despite the data, the prevailing view is that
the aging population foreshadows a looming economic crisis. But it is an
ageist narrative, one that ignores the potential of an experienced population
and the promise of the longevity economy. And without changes, it may be a
self-fulfilling prophecy. The economic future could offer dwindling work
opportunities, anemic spending, depressed rates of business formation and
economic stagnation. Widespread financial and health insecurity may be
unavoidable.
There is, however, mounting evidence of
shifting attitudes, and some companies are taking notice. Older adults are
building businesses and planning to work beyond traditional retirement age for
financial reasons and a desire for purposeful engagement. Age integration and
intergenerational teams represent a strategic opportunity to capitalize on
complementary talents. Lifelong learning and re-skilling programs can enhance
productivity across the life course.
Scientific advancements in genomics and the
prevention of chronic disease offer the prospect of healthier and more
fulfilling lives. Mature consumers hunger for products, services and innovations
to meet their needs and aspirations, and companies such as Uber, Best Buy and
Bank of America are answering this call.
How can companies capitalize on the potential
of older workers and consumers? Age diversity must be added to every company’s strategic
priority list. Already experienced with diversity initiatives that recognize
the value and contributions of women, people of color and LGBTQ individuals,
enlightened companies are uniquely positioned to lead in capitalizing on the
talents and contributions of older adults in a similar way, and best practices
are emerging.
Companies can develop phased retirement,
flex-time, family leave and sabbatical programs that accommodate the
inclinations of both their older and younger workers. To address ageist biases
exacerbated by age segregation, employers can connect generations, encouraging
intergenerational mentorships and team-based staffing and reward programs.
Learning and up-skilling programs should be available to workers of all ages.
Ergonomics can be improved to ensure that work environments are age-friendly.
Human resources practices must support equal dignity for workers of all ages.
Older employees should be included in design
and marketing teams, particularly when products and services are targeted to a
mature demographic. Advertising should reflect realistic images of older
people, and avoid stereotypes.
The message is getting through. More than
1,200 employers have taken the AARP Employer Pledge to promote equal opportunity for
all workers, regardless of age. Glassdoor highlights companies such as Kimberly-Clark,
Boise Cascade, Pfizer, General Mills and KPMG for their commitment to recruit
and support an age-diverse workforce.
PWC’s Golden Age Index demonstrates that globally,
countries are making progress toward greater engagement of older people in the
workforce. Mercer and
other consulting firms have noted an upswing in interest about age diversity as
the next frontier in human capital practices.
Twenty-first century companies are subject to
a new success standard. Are they ready?
Paul Irving is chairman of the Center for the
Future of Aging at the Milken Institute, in Santa Monica, Calif.
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