The Influence of an Aging Workforce on Industries

“Planning on retiring at 65? Most Americans retire far earlier — and not by choice.” That was the headline on CBS Moneywatch’s recent coverage of a disappointing trend. It’s disappointing in several ways: 👉Many older Americans want to work into their late 60s, 70s, or beyond because it provides a sense of connection and purpose. 👉Other Americans simply *need* to work past 65 for financial reasons. 👉Employers in nearly every industry need more, not fewer, workers.  If we were able to satisfy all three of those groups, it would be a win-win-win. So how do we get there? I advocate a two-pronged approach. 1) Employers in white-collar industries and other professions where it’s feasible to work into your 70s and beyond need to adjust their policies and overcome ageist assumptions. Many of these employers fail to account for their older workers who also serve as caregivers, for instance. This is especially true for women in their 50s and 60s who often are forced to step back or out of a job in order to care for an aging parent or spouse. Others aren’t willing to train older workers to help them keep up with younger colleagues’ skills — while retaining the experience, loyalty and other valuable traits older workers tend to possess. And still other employers won’t change their leave policies to accommodate older employees. Many want to stay on, but with a bit more time off as they age, perhaps for a long-anticipated trip. They fear they’ll lose their job even if they take unpaid leave to travel. The bottom line: Many employers don’t realize how older workers’ needs change, nor do they value the significant benefits they bring to the job. That’s ageism. 2) For workers in jobs that are difficult to perform after age 60, we need to create pathways to new careers. I’m talking about older adults who have worked physically taxing jobs for most of their lives. Or those in risk-laden roles like police, fire and the military. Often, these older workers are on the lower side of the income scale. They need to retire, but they can’t afford to. These workers’ plights remind me of a senior living community employer who told me about hiring a former truck driver. The ex-driver moved from a lonely, draining job to one that allowed him to be involved in people’s lives every day. The residents knew him and counted on him, and he felt he made a difference simply by showing up with a smile and a desire to engage. That’s the kind of example we need to follow: Helping older adults move from physically, emotionally and mentally demanding jobs into new lines of work. When employers do that — and when they adjust policies in white-collar industries — they  can offer older adults the chance to work as long as they want or need. And they’ll reap the benefits of a more experienced, loyal and productive workforce, too. (Article: https://lnkd.in/etAvzz2k) cc Paul Irving, Andrew J Scott, Jeanette Leardi

Very excited to share our new McKinsey Global Institute report on demographic challenges (read here: mck.co/demographics)!   What’s known as an “aging” problem is really a problem of “youth scarcity”—and most of that is because of fertility rates have been declining rapidly. In fact, two-thirds of the global population now live in countries with fertility rates below the replacement rate of 2.1. A demographic shift is washing over the world in “waves” and will profoundly impact economic growth, labor markets, public finances, and consumption.   In the "first wave" of advanced economies and China, the share of working-age population peaked in 2009 and is now declining. These economies house two-thirds of the world’s seniors (65+) but only 20% of its young people (under 15). First wave economies could see growth in GDP per capita dip by 0.5 to 1.0 percent each year through 2050, absent other changes. To counteract that effect, they need higher productivity, more workers or workers working longer hours, and potentially an improvement in the age mix of their populations.    Productivity growth would need to accelerate two to four times, or labor force participation rates to rise by 3 to 20 p.p. or hours worked by 1.5 to 14 hours per week. Working lives will have to extend well beyond the 50s. Migration can help, but relying on migration alone is challenging—migration rates would need to rise 1.6 to 6 times to counteract the aging effect.   If nothing else changes, younger generations will inherit a world of diminished growth. They will also need to support an expanding “senior gap” to sustain the consumption of older people beyond what they earn through work.    The "second wave" of economies, including Brazil and India, have their own challenges. Their demographic dividend is waning and they will age to the level of the first wave within roughly one generation. They must get rich before they get old but two-thirds of them are not on track to achieve high-income status by the time they age.   The world of youth scarcity is not without opportunity. The global landscape of consumers and workers is tilting toward the developing world: by 2100, a third of the world’s population will be in sub-Saharan Africa. By 2050, the over-60s consumer segment will swell, accounting for 25 percent of global consumption, up from 12 percent in 1997.   Overall, though, the current economic calculus will not hold. To adapt, businesses must: 1. Double down on productivity 2. Manage an older workforce creatively  3. Update their footprint to align with shifting global populations 4. Tap into the potential of senior consumers

My thought for this Friday: Just read a post from a senior HR individual about the aging workforce for developed countries and pointing to other countries with younger workforce to offset this. While this can be part of the solution, another solution is to look within our borders and confront what I think is a real and growing concern in America's workforce "Ageism" Hiring managers and recruiters should prioritize the value and experience of candidates, avoiding assumptions about overqualification or age. Older workers bring stability, leadership, and mentorship. Their wealth of knowledge and strong work ethic make them invaluable to younger teams, offering a fresh perspective from their extensive experience. We need to engage the narrative as HR professionals and define and value the working-age population, to maximize domestic talent rather than immediately seeking external solutions. Some ideas on tackling this: 1. Reevaluating "working age" 2. Addressing Ageism in recruitment (redefining what is overqualified, shift focus from age-based assumptions to an assessment of skills, experience, culture fit) 3. Cultural shifts in Corporate America - older employees should not be threatened by younger managers rather embraced for the knowledge & mentorship they can bring 4. Coaching & Training - we all have been through these types of classes at our companies. Let's start developing training classes on hiring practices that take ageism into the narratives.

Interesting essay, especially the fact that the media age an employer will not hire an employee is 58. Think about that for a bit. This is true across industries, but it is likely that for tech the age is probably lower. The average person is now living to about 78 (with variability due to gender, race, education level and so forth of perhaps 3 years). Many are capable of working until they are in their early to mid 70s, yet companies have decided that older workers are no longer cost-effective, which is usually weasel words for saying that they are generally harder to exploit. This isn't all that surprising. Experience is no longer valued in this society, neither is expertise. In general, what IS valued is commitment - are you willing to spend 80 hours a week on a project for three or four months, knowing that you will likely be let go when that project is done. If you are young, you have no family to worry about, no distractions, and usually not a lot of experience about the way that companies work. Older workers have all of these, and what's worse, they may very well try to shield the younger workers from burning themselves out giving up the IP that is really their only worthwhile commodity. Most workers want predictability. They want to know that they can make payments on a car or a house, or save up money to go take a vacation every now and then. Working as a consultant, you have to fill every available hour if you want to achieve that, because consulting engagement by their very nature are transitory. This is why consultants charge so much - they have to make up for the times when they're wearing a sales hat or are facing a particularly slow period (summers, the period from late November to mid-January, any time the stock market hiccups and everyone scales back their investments). Yet once you go down that road, you become unhireable as a full-time employee, especially when you are older, because your very presence destabilizes the illusions that "we are all one big happy family". However, there is also a side reality that is very seldom talked about. Companies don't WANT expertise (no matter what their PR or HR department may say) but sometimes they NEED expertise - either because the company can't do what they need to do, or because they need a fall-guy that is not part of the corporate management team. Some people are perfectly happy to play the role of Rent-a-villain, as long as they are WELL compensated for it. I've also found that past a certain point, what companies are really looking for are not employees who can do, but mentors who can teach those employees what they need to know. Most of my engagements of late are training oriented - teach my wet-behind-the-ears employees how to be good programmers, designers ... or managers. Recognise these aren't and never will be full-time jobs. There is too much pride on the line. https://lnkd.in/gppEGADE

When I worked with CEOs of publicly traded companies in Europe, particularly in Germany, one theme came up again and again: The aging workforce as a business continuity risk. It wasn’t just an HR issue — it was front and center in boardroom strategy conversations. Corporate leaders from all types of industries, retail, manufacturing, supply chain, etc. saw the cliff coming and began planning early. I’m not sure we’re doing the same in the U.S. Take welding, for example: 📊 Nearly 50% of current welders are 45 years or older 🔹 21.8% are 45–54 🔹 21.4% are 55+ 🔹 ...And only 9.4% are under 25. 🤯 That’s more than 157,000 welding professionals approaching retirement age — and no clear wave of replacements in sight! That’s not a pipeline. It’s a warning. If you're a manufacturer in the U.S.: ➡️ What are you doing to prepare? ➡️ Who’s responsible for bridging the skilled labor gap — private industry, government, or a mix of both? #Manufacturing #WorkforceDevelopment #SkilledTrades #Welding #Industry40 #Leadership #FutureOfWork #AmericanManufacturing #Operations #Fabrication #Energy #Infrastructure #Defense #USA #Innovation #AI #Robotics #IndustrialAutomation #WeldingRobots

Workers over 55 make up more than 20% of today’s global workforce. By 2031, 150 million MORE people over 55 will be working. But only 4% of global companies have #multigenerational workforce programs that integrate older workers.  Kudos to the #Bain report, “Better with Age: The Rising Importance of Older Workers,” for calling out this gap. The report’s authors don’t mince words, noting that “Too few firms recognize the changing needs and priorities of older workers or invest in integrating older workers into their talent system.”  They urge executives to face up to the demographic and social realities of the 21st century; longevity trends in tandem with longer work lives, coupled with lower birthrates have already shifted the global workforce younger to older workers in the Group of Seven countries. These trends mean that investing in older workers is a business imperative to maintain future growth and productivity.   Better With Age recommends three steps for companies that commit to supporting and empowering their older workers as a growing component of a #multigenerationalworkforce: • Reflect an understanding of what motivates older workers in retention and recruitment policies • Commit to including older workers in reskilling programs for future capability needs • Recognize and respect the strengths of older workers and allow them to do what they do best Refreshingly, the Bain report also discusses the challenges involved in changing organizational culture and integrating the contributions of older workers in ways that reflect their motivations at work and the realities of life after 55.   What will it take to convince the majority of global organizations that are NOT currently investing in programs to integrate older workers? One data point that might penetrate if we repeat it often enough: that additional 150 million people over 55 who will be working by 2031 is just 10 million fewer workers than the TOTAL US workforce today. Companies that don’t invest in the expanding pool of talent and productivity represented by workers over 55 may be out of business sooner than they expect. With thanks to the authors of Better with Age, #JamesRoot #AndrewSchwedel #MikeHaslett and #NicoleBitler And to Mike Mansfield Tim Driver Janine Vanderburg Lucy Standing CPsychol, AFBPS, CPBP, MSc, BSc Ingun Bol 🌍 Doug Dickson Lawrence Kosick Dr. Joe Coughlin Danielle Duplin and so many others who advocate for  #activeaging and #agefriendlyempoyers

Nice piece on the changing economics of retirement in Chief Investment Officer magazine. CIOs have historically worried about Americans' inadequate savings, as well they should. More older workers will want to stay in the workforce due to inadequate savings. Today's job market and America's decaying demographics strongly suggest that employers and the government should facilitate that choice. With the workforce only growing marginally, employers will find it hard to find workers, especially native English language speakers. Retaining older workers interested in staying on is straightforward enough. Employers should innovate by developing new employment models to retain older workers, like seasonal employment or permanent positions that are configured more like gigs. Technology will also change the game materially. As #generative AI changes the composition of jobs, productivity will hinge more on factors like social skills, tactic knowledge, etc. Older workers often do well by those measures. Washington should also abolish FICA for both workers and employers for workers after their 65th birthday-- a strong incentive for workers to stay employed and for employers to retain and hire older workers. #jobs #retirement #FICA

Bain & Co.'s recent report reveals an impending shift: by the next decade, around 25% of the US workforce could be 55 or older, a notable 10% increase from 2011. As the global workforce sees nearly 150 million jobs transitioning to older professionals, the impact of this demographic evolution is undeniable. Companies poised for success will recognize and adapt to this change. Here are strategies outlined by the report: 👉 Recognizing older workers' motivations is paramount. They value meaningful tasks, autonomy, flexibility, and fair pay. Aligning workplace culture with these interests can foster a more engaged senior workforce. 👉 Reskilling is non-negotiable. By updating the skills of older workers, companies can leverage their extensive experience, ensuring an adaptable team that meets future demands. 👉 Respect and recognition of older employees' vast experience and insights will not only enrich the company's knowledge base but also foster a culture of inclusivity and respect. Anticipating these shifts and proactively integrating these strategies will benefit businesses immensely. At The Swan Group, we're advocates for harnessing the strengths of an age-diverse workforce for a more inclusive, innovative, and prosperous future.

#thursday4appraisers The demographic shift no one's talking about (but should be) While we've been fixated on the latest tech trends and market disruptions, a silent revolution has unfolded. It's not as flashy as AI or as trendy as blockchain, but it's arguably more impactful. I'm talking about the massive demographic shifts that are reshaping our world. 𝐓𝐡𝐞𝐬𝐞 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐚𝐫𝐞 𝐚𝐥𝐭𝐞𝐫𝐢𝐧𝐠:  » Who our customers are  » How our workforce looks  » How businesses are valued And even the fundamental structure of our economies. Yet, surprisingly, many valuation experts are overlooking this transformation. So, you might be thinking, What's the deal? Well, our population is getting older, and younger generations are shaking things up. Here's how it's affecting business valuations: 1. 𝐀𝐠𝐢𝐧𝐠 𝐏𝐨𝐩𝐮𝐥𝐚𝐭𝐢𝐨𝐧:  » 𝐑𝐢𝐬𝐢𝐧𝐠 𝐃𝐞𝐦𝐚𝐧𝐝 𝐟𝐨𝐫 𝐇𝐞𝐚𝐥𝐭𝐡𝐜𝐚𝐫𝐞: The medical tech and elder care industries are thriving, making them attractive for valuation and investment.  » 𝐖𝐨𝐫𝐤𝐟𝐨𝐫𝐜𝐞 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬: Physical labor-intensive sectors face operational risks, potentially lowering their valuations. 2. 𝐘𝐨𝐮𝐭𝐡 𝐈𝐧𝐟𝐥𝐮𝐞𝐧𝐜𝐞:  » 𝐃𝐢𝐠𝐢𝐭𝐚𝐥-𝐅𝐢𝐫𝐬𝐭 𝐌𝐢𝐧𝐝𝐬𝐞𝐭: Businesses with a strong online presence see higher valuations by engaging younger customers.  » 𝐄𝐧𝐯𝐢𝐫𝐨𝐧𝐦𝐞𝐧𝐭𝐚𝐥 𝐚𝐧𝐝 𝐒𝐨𝐜𝐢𝐚𝐥 𝐑𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲: Companies with strong ESG practices gain higher market valuations from younger investors. 3. 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐒𝐡𝐢𝐟𝐭𝐬:  » 𝐏𝐫𝐞𝐬𝐬𝐮𝐫𝐞 𝐨𝐧 𝐏𝐞𝐧𝐬𝐢𝐨𝐧𝐬 𝐚𝐧𝐝 𝐇𝐞𝐚𝐥𝐭𝐡𝐜𝐚𝐫𝐞: Financial services and insurance need to adapt, impacting their long-term viability and valuations.  » 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐒𝐩𝐞𝐧𝐝𝐢𝐧𝐠 𝐏𝐨𝐰𝐞𝐫: Companies dependent on discretionary spending may see fluctuating valuations due to changes in disposable incomes. So, what does all this mean for you? As a valuation expert, it's time to put on your thinking cap and get creative. Understanding these demographic shifts can help you provide more accurate and forward-looking valuations. Experts who can roll with these changes are the ones who'll come out on top. What's your take on all this? How is your company adapting to these shifts? Drop your thoughts in the comments. #businessvaluation #syntelligencefintech