There was a time when getting older meant being able to retire if one so desired. For many people, a defined benefit pension was available for potentially the rest of their lives. As we will discuss in this article, those days are gone and many individuals over the age of 65 are staying in the workforce. More and more attention is being made to mature workers now but the writing has been on the wall for more than two decades. In both developed and developing countries, people are living longer and fertility rates are declining.
Labor force participation rates have been increasing steadily among people in the 65-and-over age groups since 1996. It is projected that the participation rate for workers between the ages of 65 and 74 will reach 30.2 percent in 2026. In 1996, the rate stood at 17.5 percent. Even workers age 75 and older are expected to be working more. Their labor force participation rate is anticipated to reach 10.8 percent in 2026 up from 4.7 percent in 1996.
An aging workforce has implications for almost every aspect of society and both businesses and younger workers need to change the way they see mature talent. While younger workers are preferred by most hiring managers, 50-plus employees still have a valued contribution to make to the workplace. Embracing them and supporting collaboration among workers of all ages has proven to be a challenge for more organizations. Fortunately, WiseForce Advisors was created specifically to help organizations manage the realities presented by having more mature workers in the workplace.
How Retirement Has Changed
People over the age of 55 can’t be assumed to be retirees. Millions of Americans work on either a full-time or part-time basis well past that age. Some adopt an RV lifestyle in which they move around seeking seasonal jobs. There are many reasons why older people continue working. Some want to stay active and contribute to society for as long as they can. However, for others, it’s the only way to survive, due to a confluence of factors.
Firstly, people no longer work for one or two companies over their entire working lives and receive a fixed amount at retirement age. Most private businesses have switched from defined benefit pension plans to 401(k)-type funds. Both the employer and employee put in a fixed amount and the money is invested in the stock market.
Unfortunately, many people don’t understand how these retirement funds work. Some opt not to contribute while others contribute too little. Others withdraw from the fund at the wrong time and therefore, incur large fees. Also, since 401(k) accounts lost significant value during the last recession, some retirees had to change course.
Retirees Don’t Have Enough to Live On
Some baby boomers are also forced to return to the workforce because they didn’t anticipate just how much money they would need to survive during their retirement. Others worked for private sector employers who didn’t offer a pension plan at all. To compound matters, one study indicates that around half of older Americans have had to withdraw from their retirement savings to help their adult children.
These parents are potentially jeopardizing their own futures by doing so. This reflects an ongoing concern that as the responsibility for post-retirement security shifts from employers to employees, many older people are struggling. With all these issues in play, aging increasingly means competing with younger workers in the job market. The situation presents additional challenges for both mature talent and the organizations in need of workers.
Ageism in the Workplace: The Challenge of Returning to Work
Mature workers who want to remain in the workforce or return after taking a break often don’t have an easy time. Both employers and younger workers tend to have negative attitudes toward 50-plus employees. Many of these attitudes are unfounded since older employees aren’t inherently less skilled, educated or competent.
The human resource professionals and hiring managers in most organizations would reject the suggestion that ageism affects their hiring practices. However, it’s possible that this type of discrimination goes unnoticed by organizations while mature workers feel the system is stacked against them. This is why Wise-Force Advisors offers a range of services to help organizations identify ageism, challenge stereotypes and implement strategies to embrace mature workers and build intergenerational teams.
Age discrimination can involve:
- Leaving 50-plus employees out of company activities or client meetings
- Offering training and development opportunities only to younger workers
- Overlooking mature employees for challenging assignments or only giving them unpleasant tasks
- Assuming that mature talent isn’t entitled to time off because they don’t have young children to care for
Ensuring Your Organization Embraces Mature Workers
It’s clear that businesses will be faced with an aging workforce for some time to come. If managers and business owners can come to appreciate the experience and skills that mature workers offer, they can begin to motivate and encourage them. Given the changing environment, this benefits older workers, organizations, and society at large.