A Look at How the Aging Workforce Has Positive Benefits

Older workers bring many valuable skills to the table, however, many are reaching retirement age. Despite this many are continuing to work and are now being viewed positively as a great untapped labor pool that’s increasing in size. A new report from IMSA looks at how the aging workforce can have positive impacts for companies.

June 5, 2024 – It’s a fact, the global workforce is aging. In Lithuania in 2024, for the first time more people will retire than enter the job market. Harvard Business Review found that in Germany, Japan, and Italy, the 55+ cohort accounts for 25 percent or more of the workforce, and according to a Bain & Company study, in just six years 150 million jobs worldwide will shift to workers in that age group. The U.S. Bureau of Labor Statistics projects that by 2032 one in four U.S. workers will be 55 or older, and nearly one in 10 will be 65+.

At the same time, there is a worldwide talent gap, according to recent report from IMSA Search Global PartnersJūratė Kubilienė and Irma Simonkevičienė. “Plus, social pressures in favor of diversity and against ageism are shifting the picture – seniors are now being viewed positively as a great untapped labor pool that’s growing,” the study said.

Useful vs. Youthful – The Benefits of Hiring Older Workers

“Older workers are skilled and experienced, a benefit in industries where skills take years to perfect,” IMSA Search said. “Losing senior workers to retirement means having to invest in younger workers, training to make up for lost proficiency and expertise. Senior employees have depth and breadth of knowledge of a company’s products, services, and processes.”

They know where mistakes are likely to occur and can minimize their frequency, enhancing efficiency and productivity, according to the IMSA Search report. Also, the study explains that whether retaining existing long-term employees or hiring outside to fill talent needs, companies benefit from seniors’ strong relationships with vendors and customers, and networks built over time.

Related: A Look at the Age-Agnostic Workplace

“Older employees can also be a company’s best resource for training the next generation,” the report said. “Post-Covid most companies have returned to the office a few days a week. However, many younger workers have little experience working in an office environment. Having spent most of their careers in person, seniors can mentor younger workers in soft skills such as behavioral norms in office settings and face-to-face communication skills.”

Diversity of Perspective Builds Stronger Teams, Deepens Engagement

A mixed-age workforce, by definition, brings diversity of perspective, experience, and skills. The interaction between age cohorts on teams can broaden dialogue, leading to the exchange of new ideas and sparking innovation, the IMSA Search report said. Age-diverse teams leverage differences to maximize productivity, engagement, and wellbeing.

Jūratė Kubilienė and Irma Simonkevičienė are co-founders of Simple Search and managing partners of IMSA Search Global Partners Lithuania. Both co-founders have been in the consulting industry for more than 20 years and employ their experience gained in international executive search companies, wide contact network among executives, and excellent reputation in the Lithuanian business community. Both partners are strong generalists and have completed numerous searches of c-level employees in different industries, including retail, wholesale, manufacturing, FMCG, IT, finance, and other professional services. Simples Search also provides leadership competency assessment, management audit services, and career transition coaching for management-level employees.

“Older workers whose typical tenure at any one company is much longer than today’s norm, bring a strong sense of commitment and loyalty to their work,” the IMSA Search report said. “These traits, in decline in the younger generation where frequent job-hopping is the norm, are linked with employee engagement which, in turn, is linked to increased productivity. So culturally, seniors bring a lot to the table.”

Combining Competencies is a Win-Win

Combining competencies of younger and older managers can have positive results for the nuanced decision-making required today. The IMSA Search report says that with less accumulated experience, younger managers tend to think conceptually, rely on models, and delve less into nuances. “In organizations with clear processes, such a mindset allows for faster decision-making, creativity, and new opportunities,” the study said. “Older managers have experience, relying on proven practice, they know what works. During crises a seasoned manager appears more reliable than one who has yet to gain such experience.”

Related: Move Over Millennials, There’s a New Workforce in Town

Breaking Stereotypes, Busting Myths

The stereotype of older workers slowing down and longing for retirement no longer rings true. Work provides purpose, and research confirms the senior labor pool is eager to work, to share knowledge and skills, and to learn new ones. A report from Harvard Business Review explained that Covid and the move to remote work closed the generational tech gap, fast forwarding the older generation’s adoption of new technologies, including tools for video conferencing (Zoom, Teams), cloud storage and file sharing (Google Drive, Dropbox), and project management (Workplace, Trello).

“Older adults today have higher education levels than those of past generations. They are healthier and less likely to have a disability,” the IMSA Search report said. “With an established work ethic, they miss fewer days of work, are often the first to arrive, and remain focused on work throughout the day. Of a generation which placed the company’s needs above their own, they are more likely to do work beyond their specific job requirements to better the company.”

Reimagining Retirement

Harvard Business Review reports the majority (68 percent) of workers 50+ prefer gradual retirement, and suggests ways for companies to oblige:

  • Phased reduction of hours and responsibilities
  • “Boomerang sabbatical” – return to work after multi-month break
  • Pairing gradually retiring employees with younger “apprentices”
  • Flextime, part time, hybrid work arrangements
  • Life-stage specific benefits such as retirement planning/family caregiving/health insurance for aging adults/grandparent leave 

In IMSA’s search work, they constantly encounter situations where preconceptions and stereotypes may prevent clients from hiring older individuals with valuable experience that makes them the best professional for the job. “Considering age is important,” the report concluded. “However, it is even more important to not automatically attribute the characteristics typical of a certain age group to a specific individual, to assume that an employee of a certain age will be just like everyone else at that age. Both theory and practice show that the strongest organizations are those that can combine the unique competencies brought by younger and older alike.

IMSA Search Global Partners is an international executive search network with 25-plus member countries and over 50 offices across Europe, the Middle East, Africa, Asia, and the Americas. Members of the IMSA International Executive Search network are all boutique search firms.

Related: Growing and Developing Next Generation Leaders

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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