Employers are grappling with a myriad of workforce-related issues ranging from productivity to attracting and retaining talent, but many may be overlooking some seismic shifts that are reshaping the future of work: longevity, population aging, and the multigenerational workforce.
People have the potential to live longer than ever before, which is prompting workers to rethink their time in the workforce relative to retirement. Many workers — whether by choice or by necessity — now seek to extend their working lives beyond the traditional retirement age. An individual’s working years can now span six or more decades.
Due in large measure to the aging U.S. population and increases in longevity, older workers who have been historically overlooked by employers and recruiters are becoming a driving force behind workforce expansion. The U.S. Bureau of Labor Statistics estimates that almost one in four workers will be age 55 or older by 2031 and that age 65-plus workers represent the fastest-growing segment of the workforce.
These societal shifts have given rise to the multigenerational workforce. Now and in the future, we will have four to five generations in the workforce at any given time. This unprecedented diversity brings an exciting array of skills and expertise, perspectives, and life experience that can enhance an organization’s innovation, productivity, and overall performance.
How can employers align themselves with these new realities and unleash the potential of the multigenerational workforce? By becoming an age-friendly employer.
At Transamerica Institute* and the Global Coalition on Aging, our teams have conducted extensive research over the past decade and have identified win-win opportunities for employers, their employees, and across society.
The following five best practices are intended to be a source of inspiration for catalyzing age-friendliness, engaging the multigenerational workforce, and activating age-inclusive cultures. They are illustrated by survey findings from Transamerica Institute’s reports: Stepping into the Future: Employers, Workers, and the Multigenerational Workforce and Post-Pandemic Realities: The Retirement Outlook of the Multigenerational Workforce.
1. Cultivate lifelong learning.
A worker’s career can span 40, 50, or 60 or more years, which requires that they keep their job skills up to date through continuing education and on-the-job experience.
However, only a small majority of employers (54%) indicate that they place a significant emphasis on professional growth and development among employees of all ages, including those 50 and older.
When asked what they have in place to promote lifelong learning and foster a multigenerational workforce, employers most often cite programs such as job training (46%), mentorships (36%), and professional development programs (32%). Fewer than three in 10 employers offer specific training programs that address generational differences and help prevent age discrimination (28%), reverse or mutual mentorships (23%), internships for individuals getting started in their careers (23%), internships for individuals reentering the workforce (23%), tuition reimbursement for continuing education (21%), or a multigenerational employee resource group (19%).
2. Offer flexible work arrangements.
Employees have priorities beyond the workplace. Many employers may be overestimating their support of work-life balance, a blind spot that could undermine their employee recruiting and retention efforts. Ninety-six percent of employers believe they are helpful in supporting their employees achieve work-life balance, but only 75% of workers feel that way about their employers.
By offering flexible work arrangements, employers can promote work-life balance and help their employees maintain their employment, job performance, and productivity when navigating life phases such as starting a family, caregiving, going back to school, or transitioning into retirement.
While more than nine in 10 employers offer at least one type of alternative work arrangement, relatively few offer a wide variety of options. Innovative employers that are adapting with the times offer flexible work schedules (58%), the ability to adjust work hours (51%), and hybrid work arrangements (44%). Less common offerings include the ability to take an unpaid leave of absence (43%), the ability to work somewhere on-site (e.g., office, company location, WeWork) (38%), and the ability to exclusively work remotely (36%). Only 35% of employers allow employees to switch from full-time to part-time and vice versa, and just one in four offer the opportunity to take a sabbatical.
Flexible work arrangements bring an added advantage to employers because they enable expansion of their talent pool of workers who may otherwise be unavailable due to geographic, transportation, scheduling, or other constraints.
3. Support caregiving employees.
Many workers will be called upon to serve as a caregiver for an aging or ill parent or loved one. In fact, 36% of workers are currently serving and/or have served as a caregiver in the past for a relative or friend during their career (excluding parenting). Caregiving responsibilities are shared among workers across generations with Millennials (40%) being most likely to be caregivers. Almost nine in 10 caregiving workers have made adjustments to their employment ranging from missing days of work to quitting a job altogether.
By supporting their caregiving employees, employers can preserve productivity and generate goodwill among all employees. The caregiving support programs most frequently offered by employers include unpaid leave of absence (40%), paid leave of absence (34%), online resources and/or tools (24%), an employee assistance program with counseling and referral services (24%), and referrals to backup care (21%). About one in five employers offer training for employees and managers on how to handle caregiving situations (23%, 21%, respectively).
With the aging of the population, the demand for unpaid family caregivers and professional caregivers will undoubtedly increase. According to a report by the Global Coalition on Aging, employers of professional caregivers in the healthcare industry can further elevate public perceptions of the care workforce through public awareness campaigns on the value of caregivers and by transforming the care sector itself. Such campaigns coupled with recruitment incentives can help to attract more workers into the sector. The industry can also develop more standards around training and quality, and it can improve working conditions by addressing worker health, work-life balance, better scheduling, autonomy, worker pay, and career pathing.
4. Facilitate longer working lives by offering flexible retirement.
Today’s workers envision working longer and fully retiring at an older age for financial and healthy aging-related reasons. Fifty-two percent of workers expect to retire at age 65 or older or do not plan to retire, and many workers envision a flexible transition into retirement. However, many employers do not yet have robust options in place to support them.
It may seem counterintuitive, but offering flexible retirement options can be a powerful employee retention tool. If work and retirement are an all-or-nothing proposition, employers could lose valuable workers who seek to transition but are not ready to fully retire.
Fewer than one in three employers have a formal phased retirement program with specific provisions and requirements for employees who want to transition into retirement (32%). Absent a formal program, seven in 10 employers offer one or more work-related transition programs including flexible work schedules and arrangements (46%), enabling employees to reduce hours and shift from full-time to part-time (41%), and enabling employees to take on jobs which are less stressful or demanding (35%).
Employers are also missing an opportunity to facilitate seamless transitions. Fewer than one in three employers encourage retiring employees to participate in succession planning, training, and mentoring (32%), and even fewer provide information about encore career opportunities (26%).
5. Offer comprehensive health, welfare, and retirement benefits.
Employers can help workers of all ages enhance their health and well-being, save for the future, and protect their finances. In today’s tight labor market, a competitive benefits package can help an employer recruit and retain talent.
Employers may be underestimating the value workers place on employee benefits. For example, 95% of workers value health insurance as an important benefit, but only 63% of employers offer it to their employees. Ninety-one percent of workers value a 401(k) or similar plan, but only 52% of employers offer one. Competitive benefit offerings also include life insurance, disability insurance, a cash balance pension plan, a workplace wellness program, an employee assistance program, a financial wellness program, and a host of other voluntary benefits.
Employers also play a vital role in promoting healthy aging and taking on longevity through innovation. They can foster a happier, healthier, and more productive workforce by encouraging employees to safeguard their physical and mental health through preventative strategies, recommended screenings, and seeking care when needed.
By adopting best practices and addressing the needs of employees across the age spectrum, employers can help their employees thrive and, at the same time, improve their own business results, strengthen talent recruitment and retention, and pave the way for future generations.
Employers that do not lean into the age-friendly imperative will face the risk of getting left behind.
* Transamerica Institute is a nonprofit, private foundation that is funded by contributions from Transamerica Corporation. It is not affiliated with the Global Coalition on Aging, High Lantern Group, or Oxford University.
Source: Harvard Business Review