HR pros, if you’re noticing a shift in the age distribution of your workforce, you’re not alone. Employees are living longer than ever, which means they’re working longer, too. In fact, Baby Boomers are staying at work well into their 70s, and they make up almost a tenth of the total employee population.
While this demographic shift presents some opportunities for us as employers, it also poses significant challenges. Because most organizations haven’t traditionally employed older populations, we don’t have the structures in place to properly support this group. And as we’ll explore in this post, the aging workforce needs more from their employers regarding their health, finances, ability to work, and overall well-being.
So let’s jump into what the aging workforce looks like, how we can better support them, and why investing in older populations can strengthen our organizations.
What is an aging workforce?
What does the aging workforce look like? For the first time, there are five different generations in the workforce, and older populations are growing by the year:
Today’s employee makeup is a direct reflection of our world overall. With an average life expectancy of 76.1 years, United States workers aren’t retiring as quickly as they used to. And as birth rates fall, the World Health Organization warns that retirement-age and older adults outnumber children under the age of five. In the next 20 years, the number of human beings aged 65+ is set to increase by 600 million, reaching 1.3 billion total (or 22% of the global population).
So, as employers look at long-term staffing needs, we need to shift our views about who we hire. Younger employees are now harder to come by, which means it’s increasingly important to retain older employees and keep them in the running for open roles.
Why is the aging workforce a concern?
Aside from longer life spans that make it possible to keep working, there are many benefits to staying employed past the traditional retirement age. The workplace offers older employees a sense of purpose, opportunities for social connection, and a way to maintain physical and cognitive health.
But there are also some challenges that come with a growing elderly population:
Older generations can’t afford to retire.
One big reason that older folks are still at work? They can’t afford not to. The median 401(K) balance is just $35,345, which isn’t nearly enough to live comfortably through retirement. And with rising costs of living and uncertainty around social security, many aging employees don’t want to risk losing their full-time income.
Medicare is confusing and expensive.
Medicare is a federal health insurance program designed for people who are 65 years of age or older and for younger people who qualify based on a disability. That means your employees might use Medicare for years during their career—not just after retirement.
But employers don’t traditionally offer much guidance on what Medicare is, how to enroll, or how to pay for it. And with lots of confusing (and potentially expensive) options to choose from, older employees lack support when it comes to taking full advantage of their Medicare plans.
Younger generations are affected, too.
Older folks aren’t the only ones who face challenges due to generational shifts in the workforce. Younger employees, nicknamed the “Sandwich Generation,” are often responsible for caring for their elderly parents and young children.
Add a full-time job to the mix? It can often be overwhelming, which is why many Sandwich Generation folks have dropped out of the workforce completely—and unsurprisingly, women are disproportionately the ones who take on caregiving responsibilities and leave their jobs.
Why business leaders can’t afford to ignore aging employees
While it can be tempting to focus hiring and retention efforts on younger employees, organizations can’t afford not to leverage the power of older generations. In a tight labor market, aging populations can offer immense value to your organization—especially when low birth rates mean fewer young folks will enter the workforce.
Tenured employees can offer levels of expertise, experience, and diversity of perspective that only age can bring. And as millennials and Gen Z employees rise in the ranks, Baby Boomers can provide mentorship that will strengthen the longevity of your organization for decades to come.
Data also shows that an investment in older generations is simply financially responsible. For example, we lost $850 billion in GDP in 2018 alone due to older workers being pushed out of the labor force and having a harder time getting back in. As companies continue vying for talent, those are candidates we simply can’t afford to waste.
And when we employ and competitively pay older generations? They contribute to the country’s overall economic growth. In fact, consumers over age 50 contribute about 40% of the total US GDP. In other words, when you give older generations money, they’re going to spend it—and that positively affects all of us.
Ways to support aging employees right now
It’s clear that human resources teams increase their investment in aging employees. How can HR provide older employees the resources and guidance to stay happy, healthy, and engaged at work for as long as possible?
1. Explain Medicare better.
Chances are, you already have employees who are using Medicare. But it’s rare to see Medicare highlighted properly in benefits guides, open enrollment presentations, and other healthcare resources. That means your older employees aren’t receiving the same level of healthcare support as others—which, simply put, is ageism. (Even if it’s not intentional!)
Unfortunately, many HR departments aren’t fully versed in how Medicare works or how employees can use it. (And hey, we don’t blame you—healthcare is complicated already without throwing another plan type into the mix!) And if benefits experts aren’t up to speed on the ins and outs of Medicare, then we can’t expect aging employees to figure it out for themselves.
So as you look for ways to better support your older generations, think about how you can better educate and guide employees toward smarter Medicare decisions.
ALEX can help!
ALEX Medicare gets to know employees through a one-on-one conversation and helps them navigate the intricacies of Medicare (without burdening your team). Available via ALEX Benefits Counselor or ALEX Go, aging employees can access guidance wherever they are, on whatever device they’re most comfortable using.
2. Encourage smarter retirement savings.
Like healthcare, understanding how to save for retirement can be a complicated maze. And as we’ve learned in this post, it shows: older generations don’t have enough saved up for retirement, which means they might be working longer than they’d like.
So start early, empowering your team to take control of their long-term financial planning as young as possible. Make sure they understand which retirement account is right for them, how your employer match works, and how an HSA is a surprisingly smart way to save for retirement, too.
3. Offer a flexible work environment.
Hybrid work arrangements have become the status quo for countless reasons. But especially when it comes to your older populations. Giving employees the option to work remotely to receive services like at-home healthcare or take time off for more frequent doctor visits is crucial.
Flexibility doesn’t just mean remote work, though. Over the past three years, we’ve reenvisioned so much about what it looks like to work together. We’re throwing the 9-5 out the window, prioritizing asynchronous work, and embracing new technologies to make it happen. So it’s time that we applied that level of innovation to how we treat aging employees, too.
Could your organization offer a half-retirement program, where employees have the option to go part-time after reaching a certain age? What about meeting-free Fridays to offer more personal freedom? Could you offer a few months of sabbatical to older employees as a thank you for their many years of service?
Get creative and think about how you can break traditional workplace norms to better support older employees.
4. Don’t forget the Sandwich Generation.
Millennial and Gen X workers are also impacted by the growing number of aging employees because they often care for older relatives themselves. Sandwiched between parents with declining health and young children who need care, this generation often has multiple dependents who need support.
That means millennials and Gen Xers have incredibly challenging healthcare decisions to make and may require multiple plans for different family members. So make sure you’re offering extra support to folks with an especially complicated benefits journey. Give them personalized guidance on which healthcare choices will get them the right coverage for the best possible cost. It’s also important to make your benefits resources available to anyone who may need it—including spouses, parents, adult children, or other relatives who aren’t employees at your company.
ALEX can help!
ALEX Medicare can help Sandwich Generation folks navigate healthcare decisions for their aging family members, with personalized, expert guidance that’s available anytime, anywhere.
Supporting the aging workforce is essential for both employers and employees. As the number of older workers in the labor force continues to grow, employers must recognize and address the unique challenges faced by this demographic. By providing healthcare education and retirement planning resources, offering flexible work arrangements, and promoting an inclusive workplace culture, employers can create a supportive environment that benefits both their aging workers and their bottom line.