Conference Presentation, Panel
The Business of Aging: Capitalizing on the Demographic Shift
Milken InstitutePatricia (Pat) Milligan, Kirsten Axelsen, Laura Carstensen, Camilla Cavendish, Scott Frisch, Pat Milligan
- Panelists identify key challenges including myths regarding older workers' costs, technology skills, and work ethics, which contribute to age discrimination and the belief that older employees have weaker work ethics.
- Survey data indicates that fewer than 25% of 100 Mercer clients possess specific workforce strategies for retaining older workers, despite talent shortages in Germany, the UK, the U.S., and Canada.
- Health and longevity trends show a 13-year divergence in life expectancy in the developed world based on education and income, with healthy life expectancy growing slower than overall life expectancy, leading to more years spent with chronic conditions like diabetes and dementia.
- Economic projections suggest that if everyone in developed nations worked one extra year, GDP could increase by 1%, offsetting unsustainable burdens on pension and healthcare entitlements, while U.S. employment rates for older workers have risen significantly since the financial crisis, unlike in Europe where retirement remains early.
- Demographic shifts will drive the aging workforce conversation, with 10,000 people turning 65 daily in the U.S., a trend expected to continue for 12 to 13 years.
- Research suggests older workers increase team productivity despite potential individual performance rating biases, often displaying greater emotional stability, better mental health, and higher concern for colleagues, though 75% of those aged 75 to 84 have no disabilities.
- Employers face solvable financial challenges regarding health insurance costs for older workers, which could be addressed by policies allowing Medicare to serve as a primary insurer, while wellness programs that foster social connection can reduce long-term costs by 8% to 21%.
- Flexibility and caregiving support are emerging as intergenerational priorities, with companies offering caregiving leave noting equal utilization across age groups and millennials showing increased demand for flexible work arrangements.
- Barriers to workforce participation include lack of savings for high-deductible health plans, limited access to preventive care or healthy food for low-income populations, and HR systems that have not been reinvented to manage older workers effectively.
- Future economic outlooks express optimism regarding adaptation to changes like the Internet and AI over the next 25 years, with a belief that focusing on the 50-plus population drives productivity and share prices, though some companies still face the need to manage out ineffective workers.
- Cultural and perception issues persist, with self-fulfilling prophecies emerging where unemployment beyond two years makes individuals untouchable, and affinity groups failing to attract older workers who do not identify as "old."
- Organizations are expected to benefit from recruiting high-quality workers through healthy workplace initiatives and from aligning financial incentives to encourage proper disease treatment, while governments must improve health and well-being to support extended work lives.