Right now, the workforce consists of more generations than ever before. You have Gen Z, the latest addition, sandwiched between Millennials, Gen Xers, Baby Boomers, and The Silent Generation.
This indicates that the US has an aging workforce right now because a giant part of the group consists of early-Gen Xers, Baby Boomers, and some from The Silent Generation. The sad thing is that when people hear the term ‘aging workforce’ they jump to conclusions.
Well, to put it simply, it’s because it’s a lot easier to be ageist than it is to understand the value older workers bring to the table. These individuals have years and years of experience and leadership development under their belts, providing them with a vast pool of knowledge about their organization and life in general.
Also, the ‘aging workforce’ is changing drastically, which is what we are going to cover here today. Basically, everything we thought we knew about retirement, later-life career changes, and much more has changed over the years, yet our thinking on the matter stays in the past.
Before we jump into the changes, though, let’s explore this ageist mindset to see how older workers, and the aging workforce as a whole, has been viewed.
The Silver Tsunami: The Aging Workforce Storm That Never Made Landfall
You know you can sometimes check the weather report on TV and all of the meteorologists are freaking out because there is a storm on a horizon, which is supposed to hit sometime later in the week.
You heed their advice. You go grab milk and bread from the store and get ready to batten down the hatches. Except, when the day finally comes, it only drizzles.
This is because predicting the weather is hard work and not always accurate, leaving some forecasts to be completely - or at least partially - wrong.
The same thing happened with the aging workforce. A few years ago, countless headlines emerged saying that the end times were near because Baby Boomers were starting to hit retirement age (65-years-old).
Most of these reports were saying that a whopping 10,000 Baby Boomers are retiring every day, a statistic that is - for lack of a better word - is hard to prove, though it made sense on paper. According to The Washington Post, yes, around 10,000 Baby Boomers reach retirement age every day, a rate that is supposed to continue for about 10 years or so. Given that stat, it makes sense that many of them will retire shortly after. Except they didn’t and they aren’t.
Basically, the weather prediction for the aging workforce was wrong. Baby Boomers didn’t reach age 65 and suddenly, without warning, transition out of organizations en masse. Instead, many of them stayed on, wanting to work more. In fact, many of those that do - or did - leave at 65 took other jobs, pursued hobbies, explored new careers, or started small businesses or nonprofits.
Many reasons, though the most prominent and logical is that 65-year-olds are better off today than 65-year-olds in the past. We have better healthcare systems, better diets, more activity, and - not to mention - the internet, which allows people to work in new, exciting ways.
What this false prediction did, though, was strange. It encouraged workforce leaders to start transitioning older workers out of the organization, a move that was egged on by antiquated ideas that these older workers were dead weight, costing more in health insurance, clogging up turnover rates, and impeding technological progress in senior roles.
While those issues do exist on occasion, the thought that all Baby Boomers and Silent Generation members - there are still some working - fall into these categories is dangerous. Senior staff members should be valued after working so long, especially at one organization. They are now leaders and experts in their field, regardless of how old they are on a calendar.
So, the real question should be: how do we retain members of the aging workforce? How do we make it so that these individuals can thrive in the workplace and beyond past 65?
Now that that primer is out of the way, let’s explore some of these issues in detail:
The Changing World of Retirement
Back in the day, people yearned to retire for many reasons.
Sure, some of it was simply to stop working and spend more time fishing, but most of it was due to declining health.
In fact, the idea of making 65 the standard retirement age was first set forth back in the late-1800s by Otto von Bismarck of Germany.
“Germany became the first nation in the world to adopt an old-age social insurance program in 1889, designed by Germany's Chancellor, Otto von Bismarck. The idea was first put forward, at Bismarck's behest, in 1881 by Germany's Emperor, William the First, in a ground-breaking letter to the German Parliament. William wrote: ‘. . . those who are disabled from work by age and invalidity have a well-grounded claim to care from the state.’”
In other words, it was all about how long a person could physically work the job. If they managed to live to the ripe age of 65, they got a reward: retirement.
The SSA, who was influenced by Bismarck only slightly, came to the same conclusion back in the 1930s. The SSA is adminant, though, that they came to the 65 rule without the help of Bismarck’s ideas, making it seem that 65 was just the right age - no matter where you lived - back in the late-1800s and early-1900s.
Here’s what the SSA has to say about it:
“The studies showed that using age 65 produced a manageable system that could easily be made self-sustaining with only modest levels of payroll taxation. So these two factors, a kind of pragmatic judgment about prevailing retirement standards and the favorable actuarial outcome of using age 65, combined to be the real basis on which age 65 was chosen as the age for retirement under Social Security.”
Given that retirement is all about how able the body is to go to work, it stands to reason that this is now an outdated system. Let’s face it, “work” in those days was likely in dangerous conditions in a factory, a mine or on a farm. Work took its toll on the body.
We only have to look at the facts.
Back in 1935, the average life expectancy was 61-years-old, meaning that most would never receive SSA benefits for retirement. In 2017, the average life expectancy is 79. That’s a near 20-year increase, and the rate has no signs of stopping there.
This makes the age of 65 a lot younger than it was back in the day. If retirement age was adjusted for the average life expectancy of 2017, it would be something like the age 81-85 since that is when the average person today feels the true impact of age.
What this means for today is that older workers can work longer. The retirement age of 65 is too young to have the same impact it did years ago, allowing workers to have two careers, work later at their current role, and many other things.
Technology has also improved, allowing workers to work in new ways, such as remotely, flexibly, and others.
All of this means that the retirement age is almost ignorable besides the fact that 65 is when SSA benefits kick in.
Speaking of technology, let’s take a deeper look there:
Technology: The Best Tool for an Aging Workforce
Technology has changed almost every aspect of life from how we find information to how we shop, from how we connect to how we watch TV. It makes sense that technology has also changed how we work.
Specifically, technological improvements have enabled us to work smarter not harder by providing us opportunities to work anywhere with an internet connection.
While this change has had an impact on just about everyone in the business world, one of it’s biggest benefits is that it allows older workers to keep working much longer than before, providing them a flexible option.
“The next-generation retiree will have an unprecedented array of technologies and tech-enabled services to invent a new future for working part time, remaining social, having fun, living at home, staying healthy and arranging care,” reported Joseph F. Coughlin for The Washington Post back in 2015.
Since that article, even more technologies have appeared. Things like Slack, a better Google Suite, and others have made working for almost anywhere a lot easier.
So, to put this into perspective, older workers today are healthier because healthcare has improved and they also now have the tech to help them stay connected to work, too. These two aspects compound and we are left with an older workforce that has more power than ever to keep working long after the traditional retirement age.
This is good news, too! While some companies have discriminated against older workers by trying to force them out to make way for younger staff, many other organizations are concerned that their aging workforce will vanish, leaving a ton of knowledge lost and gaps in their upper management. This is what spurred on ‘The Silver Tsunami’ panic after all. It just turned out that many people were ignoring how much easier it is to work later in life nowadays compared to even a mere decade ago.
“Now technology is offering new options and flexibility. Telecommuting isn’t a new idea, but it’s crucial for retirees who want the freedom to accept whatever opportunities suit them without disrupting their lifestyle,” Coughlin continues.
“With smartphones and tablets, the newly retired can be productive from home, beachfront or grandchild’s playground.”
The Power of the Gig Economy
Besides offering a new way to make work more flexible, technology has also led to a thriving gig economy.
Sites like Uber, AirBnb, Grubhub, and more have allowed workers of any age to make an income based around their own schedules. Older workers are no exception despite the fact that the gig economy is considered a Millennial endeavor.
“More than 400,000 seniors are now doing gig work through such online platforms, according to a recent study by the JPMorgan Chase Institute,” reports Eleanor Laise from Kiplinger.
“Although the gig economy is often seen as the province of millennials, older on-demand workers are getting a greater share of their income from these platforms than younger people, the study found. On many gig platforms, the ranks of older workers are growing fast. A November report from Airbnb, for example, notes that the number of U.S. hosts age 60 and older climbed more than 100% over the previous 12 months, making them the fastest-growing host age group on the home-sharing platform.”
The gig economy is a great place for workers to turn after they have taken a retirement package or on the side at their current role to save more money for retirement.
"The gig economy is just another step further removed from the three-legged stool, the traditional way of planning for retirement, which has become almost obsolete," Jadon Newman, CEO of Noble Capital, told Business News Daily.
"It makes the margin of error even smaller with fewer fallback vehicles like 401(k)s and pensions."
Older workers can also use the gig economy to support new ventures. Many retirees nowadays are looking at their hobbies and wondering if it’s possible to make a living pursuing their passion. In today’s world, that’s never been easier with the gig economy there to provide a decent income with ultra-flexibility, possibly paying for the startup costs of an Etsy store or non-profit.
This brings us to the final point - something that is painfully obvious but under reported:
Baby Boomers and Millennial's Want the Same Thing
A cursory look around the internet can provide you with fodder against both Baby Boomers and Millennials. Baby Boomers call Millennials lazy and entitled, for example, while Millennials blame Baby Boomers for all of their problems.
This is ageist on both ends, by the way. But that’s not the point.
The point is that if these groups would take a step back, they’d quickly realize that they both want the exact thing out of life: meaning and personal fulfillment. They just went about it - generally speaking - in a different way.
Millennials are known to only work places that give them meaning, taking only jobs that align with their personalities and personal goals. Instead of looking for a high paycheck, Millennials opt to look for purpose.
“Fulfillment at work, fulfillment at home... Millennials want it all and they want it fast. Unlike many Moderns, Millennials want to be home for dinner, and want to feel like their 9-5 job has a real purpose,” reports Karl Moore for Forbes.
“They are constantly seeking purpose in what they do for a living and at the same time want to know how their job is helping them get to the top. They're constantly questioning where they are going next and why. That is, which position they will hold next. If your organization can’t tell them that, they’ll seek out another firm that will.”
The funny thing is that it seems like Baby Boomers want the exact same thing, which makes sense because who doesn’t want their day job to give them a sense of purpose? That’s a human thing - not a generational one.
After all, many Millennials have Baby Boomer parents. I wonder where Millennials learned to want all this purpose to begin with? Hmm.
“Purpose is universal and generations that are on the way out of the workforce, this time Boomers, always struggle with purpose. As Generation X takes over leadership roles they see their window to carve out direction closing. Millennials, now the largest age demographic, require a lot of focus from talent departments,” reports Jeff Barrett from Inc.
Baby Boomers have put off fulfilling that basic need because they were taught to go into work, make decent money, rise to the top, and retire. This retirement stage - the promised land - is where the fun happens. Where you can do what you want because you made it.
The bad news is that it’s increasingly harder and harder to fully retire. This leaves Baby Boomers with a problem: they still need to work, but they also want to be fulfilled while doing that work.
You know what this sounds like? A Millennial problem.
So what’s the answer, though? Well, given that Millennials have been looking for purpose-driven work for years now, it stands to reason that these two generations, which feel so apart from one another, should come together to give each other a boost.
Baby Boomers can learn a lot from Millennials, and Millennials can learn a lot from Baby Boomers. For example, Baby Boomers are well-versed on business, career growth, and leadership. They have a ton of practical experience that Millennials can lean on.
On the other hand, Millennials have grown up in this digital world, but they also remember a time before it. Unlike Gen Z, Millennials have seen technology rise from the days of floppy discs and AOL, to what it is today, and they have used that technology to create careers that have purpose built in.
Millennials can teach Baby Boomers all of these hard-earned tricks to make it easier for them to find new, meaningful work after a retirement package has been taken or even as a part-time gig on the side. At the same time, Baby Boomers can impart their knowledge on Millennials. It should be a win-win instead of this weird competition that has been mostly made up by the media.
The Final Say
We covered a ton here. In the end, though, the point is that retirement isn’t what it used to be. The age of 65 isn’t what it used to be. Neither is technology, the generational gap, the way we work, why we work, and more.
It’s time that our thinking about retirement changes, too. Taking a step back and looking at how things have progressed is always a good thing to do. Too bad our policies and practices generally take longer to catch up.
Want to learn more about the ever-changing landscape of retirement? Check out our Evergreen guide here: