Featuring key discussions and research, this latest piece debates the age of longevity as we look at current statistics and hear from industry experts about the future of older workers.
The age of longevity means we need to radically rethink our approach to working lives. With one in five babies born today likely to live to be 100 and average life expectancy in the UK already touching 80, the idea of a three-stage life of education, work and retirement at 65 is increasingly outdated.
This means we all need to rethink how we will support ourselves financially as we live longer. According to research by wealth management firm Investec, nearly half (48%) of people in the UK fear running out of money during their retirement.
At the same time, the UK’s productivity is lagging behind its international neighbours. According to the Office for National Statistics, the UK’s productivity sits behind the US, Germany and France and is growing at the slowest rate of all G7 countries, excluding Japan. Skills shortages are affecting the speed at which firms can grow, with a ‘talent war’ underway in different sectors.
A seemingly obvious solution would be to tap into the growing cohort of older workers, or ‘mid-lifers’ as some have dubbed them. By 2050, one in six workers will be aged over 65, according to the OECD. Surely, businesses are missing a trick by not looking into this talent pool?
“Being longevity ready is one of the top strategic issues that all businesses have to deal with. I really think it’s up there with climate change and AI as one of our biggest challenges,” says Julia Randell-Khan, longevity expert and Director of Partnerships at edtech start-up the Purpose Xchange.
“Older workers are a pool of talent that can help your economic productivity and your bottom line. It is critical for people’s financial and emotional wellbeing that we have these conversations. But it’s a big societal mindset shift that we all have a responsibility for. Businesses have a part to play and it needs to part of their strategic thinking, but individuals need to understand that we’re going to have this longer working life,” she adds.
Missed opportunities
The problem is that we haven’t been doing a good job of hiring, retaining and engaging midlifers. PwC’s Golden Age Index looks at how different economies are attracting and utilising over-55s in the workforce, ranking performance against seven key indicators that reflect the labour market impact of this demographic. It placed the UK in 21st out of 35 countries, underperforming relative to the OECD average.
The employment rate of 55-64 year olds in the UK is a full 13 percentage points lower than top ranking New Zealand, with relative pay compared to younger workers and upskilling challenges other areas the UK lags behind in. And things could get worse before they get better – while employment rates for 55-64 year olds improved across most OECD economies between 2021 and 2022, they actually fell slightly in the UK.
“Understanding the cause of these labour force trends is crucial for the UK, as convincing older workers to return to work could help businesses deal with labour shortages fast with experienced staff, ultimately helping to alleviate domestic inflationary pressures,” said PwC chief economist Barret Kupelian on the release of the report.
“It’s vital, therefore, that businesses and policymakers focus on designing policies to support those who want to continue to work, as well as help to incentivise older workers to return to work they want to,” he added.
This is exactly what the top-ranked nations in the report have done. In Japan (ranked 3rd), the government raised retirement ages to retain its older labour force and provided guidance to the private sector allowing employees to work until 70. In Sweden (ranked 4th), policymakers set up a Delegation for Senior Labour programme in 2018, which promotes inclusive work opportunities for mid-lifers and protects older job-seekers from age-based discrimination. And in top-ranked New Zealand, the Older Workers Employment Action Plan helps jobseekers aged over 50 to develop skills to meet current job market requirements.
“Some countries are way ahead. Places like New Zealand and Japan introduced longevity policies years ago. There are countries like Spain that have faster ageing populations than us who have to address that quicker,” agrees Randell-Khan.
Unconscious bias
For Randell-Khan, there are many practical steps firms can take to tap into the potential – or ‘experience dividend’ as she calls it – of older workers.
“One of the big things is around recruiting and hiring practices. There is still a huge amount of unconscious bias and ageism in recruiting. The Golden Age Index report suggests that 40% of managers will not hire someone in the 50-64 age bracket. We have to help hiring managers – who are often at the younger level – to understand the value older workers can bring,” she says.
One way organisations can do this is to publish data on age as part of their DEI practices, in the same way they are now doing with gender and ethnicity. Another is to be aware of the growing number of age discrimination lawsuits businesses are facing, such as Google paying $11m to 200 jobseekers aged over 40 to settle a lawsuit alleging age discrimination and IKEA’s ongoing cases.
Another is to empower older workers to learn new skills and adapt to new jobs. With lifelong learning part of our new working reality, it’s time to dispel the myth that older people can’t learn new skills and transition into new roles later in life. In fact, it’s going to become increasingly common.
Career transitions
Randell-Khan has personal experience of such a shift. After a career as a finance lawyer at Norton Rose Fulbright and Freshfields, she found herself wanting a new experience in her early fifties.
“I began to notice my inner voice coming through. I was using words like ‘freedom’ as my password on my computer and I was taking longer to get to work, getting off the tube earlier and earlier to give myself more thinking time,” she says.
After researching career changes and how to shift roles in midlife, she set herself a deadline to exit her legal career, with 18 months to prepare.
“There were feeling around loss of identity and change. I really wanted to understand what the triggers are of how you work through this liminal state of change. So, I set myself the target of talking to one person once a week about ideas for what to do next.”
After thinking through her options, Randell-Khan opted to return to studying and did a mid-life transition programme at Stanford University before moving into entrepreneurship, academia and her current work with Purpose Xchange.
“Changing careers took planning, self-diagnostics and discipline. I think there were three things – trying things out, being curious about it and talking to people. That mix of three things served me well in terms of working out my ‘what next’. Above all, it was owning up to that inner voice that was key. It didn’t feel right to invest my next ten years in something similar. I wanted to do something different,” she smiles.
Honest conversations
For Randell-Khan, having that space to talk through options is vital – both for individuals looking to transition careers and businesses looking to support older workers.
“As an individual, you have to change networks. Your whole identity group will shift, which can be scary if you’re senior and your identity comes from a status and position in an organisation. To move on from that can be a big step,” she says.
At the same time, organisations shouldn’t be fearful of talking to older workers about their aspirations. Often, it’s about understanding the different motivations mid-lifers have. Rather than money or salary, it might be about feeling valued or being able to transfer knowledge. It might be about offering flexibility or different working patterns. Ultimately, it’s about engaging your workforce and personalising your approach.
“Be creative and brave enough to have that conversation. Don’t ignore that demographic and wait for them to exit. Harness their skillsets before it’s too late,” advises Randell-Khan.
According to the OECD, extending working lives beyond our current retirement age could add trillions to GDP. However, beyond the pure economic value, there is an ethical and societal imperative to harnessing the potential of mid-life workers.
As we all live and work longer, change will become an inevitable part of life. The 50 year career at one organisation is over, with people taking on different roles and positions, sometimes all at the same time. Whether we like it or not, older workers have a key role to play in future workforces.
“Everyone has to understand that in a longevity society, it’s about being very skilled at transitions as we live these long, multi-stage lives. It’s a mindset shift that we all have to go through in terms of realising that longer, healthier, more productive lives require a rethink in how we work and live,” says Randell-Khan.
To further discuss the information in this article contact Totum’s Head of Marketing & Projects; Sarah Broad, [email protected]