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!
Last week marked a memorable event at Steople as we came together for our annual holiday celebration. The festivities included visits to pop-up shops, a fantastic lunch paired with a movie, and a private room reservation at a local restaurant. As I walked in the door and saw the “Steople Team Dinner” sign, I thought about all the lost time over the last few years when we could not get together. The atmosphere was festive with Christmas music, trees, garlands, holiday drinks, and plenty of people buzzing about. It was just formal enough to be special but also laid back and relaxed. It was evident how much the team needed this casual time together. Amidst the joyous occasion, reflections on the past challenging months prompted a realization – why don’t we engage in these gatherings more frequently?
Looking around the table, to my left was my dear friend of 25 years from graduate school, and seated at my right was one of my closest friends. As I looked around the table at the entire team, it struck me that these moments were not just about celebration; they served as a powerful reset. For me, this evening rekindled the profound importance of placing people at the forefront of everything we do. Are our business goals important? Of course, but amid the daily hustle to accomplish our tasks, it’s easy to forget how crucial these relationships are to our professional and personal well-being. We must get back to what makes us strong – having quality interactions. According to a Harvard Business Review study, a staggering 61% of employees report feeling lonely at work, highlighting the need for time together.
So, What, Now What?
Amidst a global “loneliness epidemic” intensified by the isolation of remote work, businesses find themselves grappling with the imperative task of alleviating the pervasive sense of isolation among their workforce. Addressing these feelings of disconnectedness enhances individual team members’ well-being and emerges as a fundamental factor in shaping a resilient and thriving company culture. In this blog, I will explore practical steps for leaders to support their teams during these challenging times. This is especially compelling right now during the holiday hustle and bustle when people can be in a crowded room full of festive people and still feel very alone. These are some initial steps you can take:
1. Champion Vulnerability
Loneliness poses a significant threat to workplace culture. Leaders can combat this by fostering a culture of connection through vulnerability. As advocated by thought leaders like Brené Brown, vulnerability involves opening up and sharing one’s authentic self, including fears and uncertainties. When leaders demonstrate vulnerability, it fosters psychological safety and trust within a team. This, in turn, helps combat feelings of isolation and loneliness.
2. Incorporate Team-Building Initiatives
Loneliness negatively impacts productivity, with 79% of employees reporting declining work performance due to feelings of isolation. Leaders can counteract this by organizing team-building activities and promoting deeper connections among team members. Integrating mandatory “5-minute icebreakers” before meetings is an effective strategy, enhancing personal interactions and fostering collaboration.
3. Prioritize Social Team Gatherings and Well-being Checks
Engaged employees are more productive, with Forbes reporting a 21% increase in profitability for companies with high levels of employee engagement. Recognizing humans as social beings, leaders can combat loneliness by facilitating meaningful social interactions. Promoting social team gatherings and scheduling well-being checks contribute to a positive work environment and heightened productivity.
4. Encourage Connections Outside of Work
Beyond work, employees need to foster connections in various aspects of life. Encouraging employees to reconnect with personal interests, family, and friends is crucial. Overworking exacerbates loneliness, with a survey by Harvard Business Review revealing that 40% of remote workers feel burnt out due to longer working hours. Encourage a culture that values personal connections beyond the professional sphere.
5. Establish ERGs or Hobby Groups
Employee Resource Groups (ERGs) and hobby-focused groups can be instrumental in combating isolation. Gallup reports that employees who have a best friend at work are seven times more likely to be engaged. Leaders can create a sense of belonging by emphasizing engagement around common interests, fostering camaraderie, and instilling a shared sense of purpose.
6. Cultivate Norms, Routines, and Traditions
Company culture plays a vital role in mitigating loneliness, as indicated by a Harvard Business Review study showing that 48% of employees consider a strong company culture essential. Establishing team norms, routines, and traditions creates a sense of community, reducing the risk of loneliness or silos within departments. Teams that feel connected experience higher engagement, positively influencing employee retention rates.
7. Create Opportunities for Regular Interactions
Regular interactions contribute significantly to relationship building. SHRM reports that 50% of employees feel more connected when they have strong relationships with their colleagues. Leaders should provide opportunities for teams to interact frequently, fostering social connections among coworkers and contributing to overall job satisfaction.
8. Equip Managers with Connection-building Skills
Managers play a pivotal role in shaping the employee experience. According to Deloitte, 87% of employees rate professional development and growth opportunities as important to them. Providing managers with the skills to cultivate social ties within teams not only combats burnout and turnover but also boosts engagement and overall performance.
9. Prioritize Individual One-on-Ones
Gallup reports that employees who feel their opinions count at work are more engaged. Leaders should initiate one-on-one check-in meetings to demonstrate genuine concern. Being fully present in these interactions allows leaders to discern nuances like body language and tone, establishing a regular cadence of individual meetings to connect with the team.
10. Adopt a Holistic Approach
Holistic well-being contributes to overall employee satisfaction and engagement. The Harvard Business Review found that 89% of organizations see improved retention due to well-being programs. Leaders should encourage having fun together, organize enjoyable bonding activities, and create an environment that supports employees personally and professionally.
11. Encourage Communication and Recognition
Communication is vital in reducing feelings of isolation. Gallup reports that 51% of employees are not engaged at work due to insufficient communication from leadership. Leaders should promote diverse communication channels to facilitate easy connection and collaboration. Regular recognition of employee contributions and positive feedback nurtures a sense of value and connection within the team.
12. Facilitate Non-Work-Related Conversations
Personal connections at work significantly impact job satisfaction. Recent research found that 57% of employees who have friends at work say they love their job. Leaders should engage in intentional, non-work-related conversations regularly, fostering a supportive environment where employees feel they belong and are well-supported.
Steople’s recent holiday celebration served as a powerful catalyst for recognizing the crucial role of human connections in the workplace. As leaders, this is a great reminder to combat workplace loneliness, emphasizing vulnerability, team-building initiatives, social gatherings, and various strategies to foster a people-centric culture. Amidst the holiday rush, these insights offer a concise roadmap for businesses to prioritize meaningful interactions, contributing to both personal and professional fulfillment.
Standing outside on the balcony, feeling the hot rays of sun on my face, and catching the breeze coming from the north, I could see the Pacific Ocean just a block away. As each wave rolled in, I saw figures bobbing in the water – easily flowing back and forth. I realized they were surfers out to catch a wave before they started their day. It was at that moment that I gained clarity on my North Star. “Why am I doing what I am do every day?” It’s because one day I want to be on the water with my kids trying to catch the perfect morning wave!
The Steople team gathered in sunny California to enjoy time together and gain alignment on our goals and rallying cry moving into the end of the fiscal year. Our annual strategic planning offsite event was booked several months ago, and we were all excited to spend time together. We started out the day with air travel. Not surprising to say that everyone’s travel was eventful with cancellations and delays. Nonetheless, we all got to Los Angeles in one piece and met for a late lunch at a restaurant on the beach. We enjoyed a team building activity that night talking about what drives us and what drains us as individuals and as a team. This provided much needed insight to the team and how to work better together. Even though most of us have worked together for a while, this activity helped us realign on each individual value. Apparently, my drainer is “enjoyment.” Of course, the team found this revelation quite funny! However, it wasn’t a big surprise to me. When I am tasked with work, all I want to do is put my head down and get it done. Go ahead and think it… Layla’s the buzz killer (smile)!
We spent the entire next day aligning around goals and reviewing Steople’s core ideology consisting of our core purpose, core values, mission/vision statement, and SWOT analysis. In reviewing our core values, we provided examples of how we “walk the talk” every day in our behaviors and work product with our clients and our own team members. These core values provide guidelines for us of how we want to behave in our own Steople culture. By knowing your core values, it allows you to get you through challenging times because the strong foundation is set and clear for all. This sets the culture in an organization. Talking about our vision statement enables each of us to see how our roles guide us collectively into the envisioned future. We asked ourselves, “Why are we doing what we do?” Client meetings often take us away from our families and, sometimes, we even have to face the challenges of working across global time zones. Indeed… why do we do this kind of work? Simply put – we love our team, the work we do, and the clients with whom we do it!
I gained the most clarity during our talks of core ideology, metrics, feedback/recognition session, and strategy discussion. As a team, we strategized around how we will achieve our BHAG (Big Hairy Audacious Goal) during our session on our one big commitment. Before I reported out on my own One Big Commitment to the team, I walked back to the balcony, looked out to the ocean, and asked myself again, “Why do I get up every day and get excited about the work that I do?” Because one day, my kids and I will be on the beach at sunrise to “catch the perfect wave.” How do I achieve that? I need to be aligned with my teammates and on the same page with my vision for the upcoming year. Getting alignment may require difficult conversations; this is where the turning point was for our team. Being able to have healthy conflict on a team enables the team to gain trust and become more open to innovation and creativity instead of being reactive to a situation or person.
As we faced the last day in sunny California, we packed our bags and piled into a Jeep laughing about funny moments from our time here. We broke bread together one more time at a restaurant on the pier before heading back to the airport. As a reminder of the clarity I achieved, my mentor – who happens to by the CEO of Steople – gave me a ”Surfing the Wave” sticker that I have in front my computer as a daily reminder of my WHY.
Remember to invest in your business and your people by ensuring your strategic planning offsite happens so you can realign around your core ideology. Make it a priority as this will help guide individual team members through challenging times and help them find the focus and desire to work as one team. Allow Steople to be your compass as you find your North Star.