Last week, as I wrapped up a speaking engagement, I found myself conversing with a small business owner who proudly declared that one of his key strategies was to “attract young workers.” This statement immediately prompted a question in my mind – why the focus on the younger workforce when the potential of individuals aged 50 and above often goes unrecognized? I’ve spoken with numerous business owners on this exact matter.  Today, we will dive into the current workforce landscape, particularly the phenomenon known as Peak 65, and explore the untapped potential of older employees.

The Shifting Dynamics of the Workforce

Across various industries, the shortage of hourly and front-line workers is a constant topic in the news. Foodservice, airlines, home health, gyms, office staff, and senior care companies grapple with the absence of essential workers. The ongoing challenge of finding, hiring, and retaining staff has proven to be a significant struggle for business owners. The initial term coined for this phenomenon right around the Covid years, “The Great Resignation,” is now transforming into what some call “The Great Reshuffle.” This transformation is driven by a growing number of young and middle-aged workers seeking jobs that not only offer fair wages but also align with their vision of a fulfilling work experience.  It also aligns with approximately 4 million Baby Boomers turning 65 this year.

Peak 65: A Demographic Turning Point
In 2024, 2025, and 2026, a staggering 11,200 individuals will turn 65 daily, marking the tail end of the baby boomer generation. This is being called the era of Peak 65. By 2030, every baby boomer will have crossed the threshold into their 60s or 70s. While discussions around Peak 65 have often focused on financial challenges, it also holds significant implications for employers, older workers, and the very concept of retirement.

Cyrus Bamji, Chief Strategy and Communications Officer for the Alliance for Lifetime Income, emphasizes the potential opportunities that Peak 65 offers. He notes, “Peak 65 provides potentially more of an opportunity to get the message out that older workers are good for business and that employers are missing out on opportunities if they don’t tap into Peak 65.” However, studies indicate there is an internal struggle many individuals face as they approach 65. In the worker’s mind, you turn 65 and can’t help but think, ‘Should I continue working?’ It’s a touchstone for this period of self-evaluation. Despite the average retirement age being 62, the trend of working at 65, either part-time or full-time, is rising. This shift can be attributed to longer life expectancies, with many 65-year-olds anticipating living well into their 80s and 90s. Plus, this generation realizes they still have so much to offer in the workplace!

Implications for Companies
A significant shift is underway, with roughly one in five Americans aged 65 and older (19%) still being employed in 2023. This marks a nearly twofold increase from 35 years ago, as highlighted in the Pew Research Center report, “Older Workers Are Growing in Number and Earning Higher Wages.” The U.S. Bureau of Labor Statistics projects this figure to increase to 21% by 2032.

Several factors contribute to the rising employment rate among those aged 65 and older. Richard Fry, the senior researcher for the Pew study, points to increased education levels and better overall health among today’s older adults. The shift in Social Security’s Full Retirement Age from 65 to 67 in 1983 also played a role, encouraging some individuals to continue working. Additionally, the decline in traditional pension plans, which often mandated retirement around age 62, eliminated a disincentive for employees to continue working.

Despite these positive trends, challenges persist. Many individuals approaching 65 may decide to leave full-time positions due to eligibility for Medicare at age 65. Some continue working solely for employer-sponsored health insurance until reaching Medicare eligibility. The labor force dynamics are evolving, opening up opportunities for part-time work in what has been termed “unretirement.”

Adapting to the New Workforce Realities
While older workers are finding new pathways to employment, employers have been slow to adapt their policies and benefits to accommodate the changing needs of this demographic. Approximately 52% of retirees surveyed feel their employers do not understand their needs as they transition toward retirement.

Chris Littlefield, President of Retirement and Income Solutions at Principal, acknowledges the need for flexibility in addressing the tectonic shifts in workforce demographics. He emphasizes that employers must find ways to work with their employee population to manage knowledge transfer and succession planning effectively. Littlefield urges businesses to adopt more flexible work policies and personalized benefits to meet the diverse needs of the Peak 65 workforce.

A paradigm shift is needed in how businesses view and manage their workforce. Bradley Schurman, author of “The Super Age,” notes, “The big story is not just the number of people getting older. It’s the number of younger people coming into the workforce; there’s fewer of them.” Schurman emphasizes the importance of businesses addressing age bias and altering their policies to foster inclusivity.

The World Economic Forum advocates for inclusive working environments for all generations in a January 2024 report on the longevity of the economy. One of the key principles highlighted is the need for companies to evolve job designs for flexibility, allowing older individuals who wish to continue working the ability to do so. As the working-age population declines, creating inclusive workplaces becomes imperative for sustained economic growth.

There is a distinct absence of attention on older workers, specifically those aged 55-90. Many individuals in this demographic, supposedly in retirement, actively seek additional income to supplement their social security, savings, and, if they’re fortunate, a pension. As they face longer, healthier lives, these older adults are also confronted with soaring food and gas prices, reaching unprecedented levels. This juxtaposition leaves many older workers anxious about aligning their shrinking income with escalating consumer prices. It’s crucial to recognize that older workers differ significantly from their younger counterparts in the 25-50 age range. Employers grappling with the challenge of securing reliable personnel would be wise to consider the unique attributes of older workers.

What Can Companies Do?
Creating an inclusive and supportive workplace for older workers involves a thoughtful approach encompassing various aspects.

1. Design Purposeful Roles: Start by crafting roles that go beyond mere job descriptions. Tailor positions that resonate with the company’s mission allow employees to see the direct link between their tasks and the organization’s broader goals. Recognize the importance of making individuals feel indispensable, fostering a sense of purpose by enabling them to contribute to customer service in a meaningful way. This acknowledgment holds particular significance for older workers, many of whom have spent their lives discerning between jobs that held such qualities and those that did not.

2. Arrange Flexible Schedules: Acknowledge the unique needs of older workers by embracing flexibility in scheduling. Understand that the late-life work experience is enriched when individuals can manage shifts and leaves of absence. While industries may have distinct requirements, adopting innovative scheduling solutions allows employees to attend to personal matters, ultimately contributing to increased loyalty and a willingness to go above and beyond when the company requires their support.

3. Pay for the Job, Not for the Tenure: Shift the focus from compensating based on years of service to valuing the contribution and equity of the work performed. According to research by Josh Bersin and Thomas Chamorro-Premuzic, emphasizing job and level equity over tenure is a key factor in the recruitment and retention of older workers. This approach underscores the significance of recognizing the value of their contributions over time.

4. Adapt to Physical Challenges: Consider making modest adjustments to the work environment to accommodate the physical needs of older workers. This might involve offering more frequent opportunities to sit, especially for those who experience discomfort when standing for extended periods. Engage with employees to understand their specific needs, recognizing that individual preferences vary. Such accommodations not only enhance the working experience for older employees but may also contribute to increased efficiency compared to their younger counterparts.

5. Build Community and Camaraderie: Beyond the professional aspects, fostering a vibrant and enjoyable workplace is crucial. If the first principles are in place, it sets the stage for cultivating a sense of community. Consider organizing events such as picnics, costume contests, or seasonal activities to infuse a sense of fun into the workplace. Simultaneously, recognize the importance of compassion by allowing additional time off during personal crises and celebrating life events, creating a workplace where individuals genuinely care for one another.

6. Tackle Ageism: Stand as a beacon against ageism by recognizing and celebrating the talent and contributions of workers, irrespective of their age. Showcase older employees as role models, demonstrating a commitment to anti-ageism principles. Stay vigilant for subtle ageist tendencies and establish a zero-tolerance environment within the company. By fostering a workplace that values individuals based on their abilities rather than their age, you contribute to a more inclusive and enlightened corporate culture.

Of course, our work here at Steople revolves around making workplaces the best ones possible for all stakeholders…as research suggests, this absolutely includes looking at the diversity within a company. Many often overlook the age demographic as a viable option for the talent issue present in so many companies. How have you seen any of this play out in your company? Is this something you need to leverage? We would love to hear from you!