The U.S. Department of Labor predicts that by 2024, 25 percent of the workforce in the U.S. will be 55 or older. That is more than double the amount in 1994. The rise in population, known as the “baby boom”, is now 54-73 years. This combined with the increase in retirement age results in an older workforce. The implications of an older workforce is a circumstance that a lot of businesses have not prepared for, nor even acknowledged.
There are some hurdles for businesses that have older employees. An older, more experienced worker means higher compensation and benefits. Experience is important for any business, but it makes it hard for younger employees to gain the experience needed to fill roles. This has also been a cause for high job turnover with younger generations.
Companies are trying to find ways to lessen the effect of an aging workforce without discriminating. Age discrimination, outlawed in the Age Discrimination in Employment Act (ADEA), is the discrimination of people who are 40 or older. One way businesses are trying to close the age and experience rift is by providing mentoring programs. This helps bridge the experience gap and prepare a company and its employees for new position openings. Some companies try to help cushion the impact of late retirement by creating different career paths. This helps shape employees into gaining the experience for jobs that are needed or will be needed in the future.
While some businesses are trying to encourage retirement among its older employees, others are embracing it, even scouting for it. There is much to be debated in the value of experience versus the cost. Accounting firm PKF O’Connor Davies finds the value of experience to be worth it. They hire older accountants when other firms are pushing retirement. They incentivize with flexible work schedules including shorter work weeks.
Many companies try to prepare for transitions, but in the case of late retirement, they must prepare for a consistency that differs from past experience. The aging of the workforce is inevitable. Implementation, whether it be of mentorship programs or career differentiation, is key to helping your business prepare.