In the mid-2010s, Robert De Niro played opposite Anne Hathaway as the titular role in “The Intern,” depicting a retiree rejoining the workforce. His character’s career choice might have seemed like an anomaly at the time, but new data shows it may not be all that unique in seven years. There will be 150 million more workers over age 55 by the end of the decade, Bain & Company predicts in a new report. The company—one of the Big Three strategy consulting groups that includes McKinsey & Company and Boston Consulting Group—analyzed 40,000 workers across 19 countries.
It found that by 2031, older workers will account for more than a quarter of the workforce across seven countries, a 10% hike since 2011: Canada, Germany, the U.K., Japan, the U.S., France, and Italy. It’s not just happening in these countries, the report points out—even China and Brazil are seeing a growing number of older workers.
This shift is due to a conglomeration of factors. There are fewer younger individuals in the workforce, which Bain & Co. Attributes to the rise of young adults spending more time in higher education as well as lower fertility rates. Meanwhile, people are living longer globally as medicine becomes more advanced (WHO predicts the number of individuals over 60 will practically double from 12% to 22% between 2015 and 2050). And, in today’s economy, many older workers are returning to work because they can no longer afford their retirement, or simply because they got bored. As work lives (and lives in general) get extended, more countries are extending the retirement age, reversing the long-term trend of early retirement.
“We’ve seen a bounce back in people returning to the workforce since the initial wave of pandemic resignations, mainly for economic reasons,” Andrew Schwedel, partner at Bain & Company, tells Coins2Day. “In addition to increased inflation and a tapering of stimulus programs, people also have a need for greater income as they live longer.”
The effects will be most drastic in Japan, which has long been deemed a demographic time bomb due to its rapidly aging population and declining fertility rate; the issue has become so striking that the government offered to pay families one million yen per child to relocate outside of Tokyo in an attempt to distribute its younger citizens more evenly across the country. Older workers will amount to 38% of the country’s workforce in 2031, Bain predicts.
Over in Europe, Italy faces a similar dilemma of a declining birth rate and an aging population. Unsurprisingly, it will have the next biggest share of older workers by the end of the decade—32%. In the U.S., where many older Americans retired during the early pandemic only to find their savings fading away faster in a world of high inflation, the share of workers over 55 is projected to reach 25% by 2031; it was 20% in 2011.
Workplaces are ill-equipped to meet senior employees’ needs
The seniors that the study estimates to still be working will largely be Gen Xers and baby boomers. The former has faced more of an uphill battle due to student loans and the rising cost of caregiving for both their own children and aging parents. They worry more about how much they think they need to save for retirement—$1.56 million on average compared to Americans’ overall expectations of $1.27 million—which might make them more likely to work longer.
But both generations will likely want different things than their younger counterparts, per Bain’s analysis. It found that older workers were more likely to be motivated by interesting work and autonomy as well as jobs centered around helping others, while workers younger than them were more likely to take jobs focused on status and compensation and that helped them make something of themselves. While high-pay mattered for all groups, it became relatively less important as one ages. Employees also start to look for self-employment and part-time work as they get older.
Workforces across the globe remain ill-prepared to address the needs of their aging employees. Bain points to a 2020 study from AARP that finds less than 4% of companies have programs meant to help integrate older workers. But just under a third claimed they were “very likely” to look into providing these services. This lack of assistance and unchecked ageism hits women in the U.S. Especially hard.
Companies are slowly responding to their employees’ desires, though, as the workforce and population ages. “Far-sighted companies are waking up to the need and opportunity to recruit and retain older workers,” Schwedel says. “And they’re starting to do this more, especially given the tight labor market.”
Bain suggests a three step solution to empowering senior employees, including examining their motivations to better retain and recruit staff, reskilling them to meet company needs, and respecting their strengths (like loyalty, mentorship, and general higher life and job satisfaction).
Perhaps it’s finally time to meet our De Niro interns and employees where they’re at. It’s not like we’re getting any younger, after all.
