Are You Prepared for the Coming Silver Tsunami?
Are You Prepared for the Coming Silver Tsunami?
The world’s population, including the United States, is getting older. According to the Centers for Disease Control and Prevention, the life expectancy at birth of the average person in America has increased from 76.7 years in 2000 to 78.7 years in 2018. Across the globe, the number of people aged 60 and older is estimated to double to more than two billion by 2050. Each day in the United States, approximately 10,000 people turn 65, formerly the typical age of retirement (Arlene S. Hirsch, M.A., LCPC, for SHRM). From a labor perspective, these statistics clearly indicate that there is an aging workforce wave…a silver tsunami…bearing down upon us. Whether employers treat this impending occurrence as a challenge to be overcome or an opportunity to be capitalized upon, it will be impactful on the workforce and the workplace.
Prominent decision-makers in both the private and public sectors are already sounding the alarm. Ben Bernanke, the chairman of the U.S. Federal Reserve, recently stated, “in the coming decades, many forces will shape our economy and our society, but in all likelihood no single factor will have as pervasive an effect as the aging of our population.” As early as 2010, Standard and Poor’s predicted that the biggest influence on “the future of national economic health, public finances, and policymaking” will be the “irreversible rate at which the world’s population is aging” (Harvard Business Review article, When No One Retires, 2018).
Not surprisingly, as the population ages, more older people are choosing to remain in the workforce. Their rationale may include the lack of a retirement plan, inadequate savings, inflation trends and the Social Security Administration’s gradual increase of the full retirement age, from 65 to 67. As a result, the workforce will soon include people ranging from teenagers to 80-somethings. According to the Bureau of Labor Statistics, employment of workers over the age of 65 increased by over 6 percentage points between 1995 and 2020. In addition to older employees choosing to work past retirement, employers are finding it more difficult to attract and keep younger workers.
As the workforce ages, companies need to confront not only the reality of increasing retirements but additional associated challenges and complications. For instance, in the U.S. manufacturing industry, 3.2 million more baby boomers retired in the third quarter of 2020 than in the same quarter of 2019. At the same time, there were 500,000 open job positions at the end of the third quarter (Bureau of Labor Statistics). Clearly, the workforce is also experiencing a double-edged dilemma; essentially older workers are retiring, and not enough younger workers are filling the necessary vacancies. However, the complexities are further exacerbated (and contrasted) by the fact that a growing number of older employees are desiring to remain employed but to work less hours, rather than fully retiring at 65 or 67 years of age. As you can see, it’s not an easy fix but it’s not going away and left unaddressed, the implications can become even more challenging.
Here's an objective question for employers: Are you prepared to handle this impending multi-faceted crisis?
Most will answer “no”, even as the growing trend impacts the structure of compensation and benefits, development of products and services, talent recruitment, health and wellness programs, the design of physical plants and offices—the entire fabric of society and economy. Innovation and “out of the box” thinking is immediately required to address these changes. But the message is failing to resonate with corporate executives even in the face of compelling evidence. So far, precious little time and resources have been dedicated to developing adaptive strategies that would address these challenges, whether to minimize the costs, or to capitalize on the opportunities.
Let’s examine some reasons why leaders may be overlooking the opportunities that come with an aging workforce. Government Accountability Groups and The Congressional Budget Office supposedly report that an aging population could bring slower economic growth and possibly indirectly contribute to increasing the federal deficit. However, these reports have been challenged for their accuracy and validity at several levels. Sketchy anecdotal “evidence” may suggest that older employees are typically less healthy, lethargic, cognitively challenged and “burned out” with their jobs. However, it is not at all accurate to paint all senior aged employees with the same negative brush stroke. Far more are healthy, able to stay actively engaged and continue to make meaningful ongoing contributions to their workplace environment. Highly credentialed psychologists such as Laura Carstensen, the founding director of the Stanford Center on Longevity, have shown that employees in their 60’s and beyond are typically healthy, knowledgeable, fully engaged and more loyal to their company than their younger colleagues.
Interestingly, such positive attributes of the aging workforce are often overshadowed by negative stereotypes and worse. Studies done by AARP confirmed that more than 50% of workers in their 40’s to 70’s had experienced age discrimination in their places of employment. In today’s culture which emphasizes diversity, equity and inclusion, the rights of women and the LGBTQ community, senior aged employees should be receiving every bit as much protection against age bias that inappropriately discriminates against older workers. Age is a crucial dimension of diversity that should be recognized and valued.
Some early strides are slowly being made in the public sector to enhance “age friendliness”, improve wellness programs, inhibit the spread of diseases, and imagining new ideas for retirement income. But government-generated changes are historically slow, exceedingly cumbersome and take several years to implement. On the other hand, most companies are nimble and uniquely structured to enact meaningful changes in culture and workplace practices almost immediately. Transformation is not always an easy process but properly and professionally implemented strategies, “beginning with the end in mind”, can produce amazingly positive results.
Companies can push back against the negative stereotypes and embrace the benefits of tapping into the wealth of experience and expertise of their most seasoned workers. The good news is that a litany of proven management tools already exists to effectively mitigate the drawbacks and tap into the opportunities. Companies can up-skill employees, educate their workforce to combat prejudice, implement creative and collaborative mentorship initiatives, re-evaluate the antiquated 9 to 5 Monday thru Friday work week, and instead offer a more flexible or part-time work schedule, perhaps even virtual to match current technological advancements. Also, company-sponsored coaching and counseling sessions, phased retirement programs, allowing the aged workers to formally mentor the younger multigenerational team members, building community good-will through volunteer efforts, and creative think-tank sessions are other meaningful ways to engage the elderly in activities which help maintain their self-esteem and build esprit de corps as an integral part of the company culture.
Numerous companies are already realizing the rewards of similar actions. Here are just a few examples:
“We value multigenerational teams because we know that the best solutions come with diversity of thought and of experiences. When you bridge between generations, you can take that knowledge of the knack of things and then technology to identify the exact problem or improve the solution.”
– Mari Jo Moody, VP of HR at Batesville Casket Company, subsidiary of Hillenbrand, Inc.
“We find that the seasoned employee plays a significant role with the younger generation employee and brings great value on so many levels.”
– Catherine Benavidez, President of Injury Management Organization, Inc.
“We do a lot to train people – one example is unconscious bias training – to help people understand the differences in how people think and behave. We want to be a more inclusive and diverse company because that makes our company better.”
– Richard Calvaruso, Sr. Director, GE Appliances
“We offer part-time work for those toward the end of their career. My philosophy is that it’s better to have more senior employees transition into retirement. That is, it’s better for a worker to do 40 hours a week, then 30, then 15 for a while until they’re really ready, rather than just ‘here’s your watch’ and that person is gone. I think our way is more respectful, and it allows for a more flexible workforce.”
– Dean Burrows, President and CEO, Gear Motions
But as companies explore the opportunities of an aging workforce, it will behoove them to also assess potential risks. Specific to risk-management issues, companies might ask a few questions:
- Are my older better trained employees more or less likely than younger employees to be injured in the workplace?
- Do my older injured employees require longer medical-recovery time that similarly injured younger employees?
- Are my workers’ compensation costs and premiums driven more by older employees than by younger employees?
The answers to these questions may surprise some employers, but even more importantly, they may help guide their internal strategies toward a more cohesive plan that capitalizes on the opportunities while minimizing the risks of their aging workforce and the coming silver tsunami.
As I hope you can glean from reading this article, the impending silver tsunami can be transformed into a golden goblet. A creatively crafted vessel from which to further enjoy the rich rewards unselfishly offered by the aging workforce to ensure that their invaluable knowledge is not lost, but repurposed and transitioned for the betterment of all.
For more information and solutions on measuring these trends and positioning your company for the aging workforce challenges and opportunities ahead, please contact The Lighthouse Resource Group and their team of highly skilled professionals.
AARP (2021, November). Multigenerational Teams in Manufacturing – Industry Trends and Best Practices for Leveraging Age Diversity, a report published by AARP in November 2021 by the Manufacturing Institute https://www.aarp.org/work/employers/manufacturing-multigenerational-teams-research/
Irby, Charlotte M. (2020, August). What to do about our aging workforce – the employer’s response, U.S. Bureau of Statistics https://www.bls.gov/opub/mlr/2020/beyond-bls/what-to-do-about-our-aging-workforce-the-employers-response.htm
Irvin, Paul (2018, November). When No One Retires, Harvard Business Review https://hbr.org/2018/11/when-no-one-retires
Verlinden, Neelie (2022, June). Aging Workforce Challenges: Trends, Statistics and Impact, https://www.aihr.com/blog/aging-workforce-challenges/