The Future of America’s Workforce is...Gray
Retirement is not the same as it was 15 years ago. More and more people are working past the “traditional retirement age” of 65 and some have no plans of retiring at all. With 10,000 baby-boomers turning 65 every day, employers are facing new scenarios and challenges to manage the needs of an older workforce. In fact, the number of older workers is outpacing the overall growth of the labor force. The number of workers aged 75 and above is expected to grow by 6.7% annually between 2016 and 2026, compared to 4.2% annual growth in the number of workers aged 65-74 and just 0.6% growth for the labor force as a whole. Many employers already anticipate the fact that people will be working later, with one survey showing that 72% of employers felt that their employees plan to work past 65 or do not plan to retire. Even further, 4 out of 5 employers support employees working past 65.
With the “Silver Tsunami” nearing its peak, employers will need to find new ways to support this aging workforce and implement new strategies to provide this support.
Why are people working longer?
One of the main reasons why people nearing retirement continue working is financial security. Studies have shown that 58% of Americans are concerned they cannot achieve a financially secure retirement and 65% of people indicated that they will likely work past retirement age to save enough to retire.
The US Senate appointed a special committee to report on the aging workforce in America and both the opportunities and challenges it presents. From the research in this report, experts attribute working longer and financial insecurity in retirement to various factors:
Sweeping changes to the Social Security System.
Rising cost of healthcare in retirement.
Raising of Social Security “retirement age”, meaning that the later you work, the higher your benefits.
A major shift in employer sponsored benefits: Surveys have found that many employers have eliminated Defined Benefit plans (Pensions) and instead offer Defined Contribution plans (401k) where contributions and investment management fall solely on the employee’s shoulders.
Work is generally not as physically demanding as it once was, allowing people to work longer.
A higher concentration of older workers in white collar positions.
What are the challenges of an aging workforce?
Employers recognize that the changing workforce demographic and shift towards employees working past 65 will bring unique challenges. Some of the potential challenges employers will face include:
Creating a more aging-friendly workplace.
Offering education, guidance and support while approaching retirement.
Helping aging workers to continue to be successful in their positions by offering more training opportunities.
Strategizing retention of knowledge. With a larger aging workforce and fewer younger workers, the ability to retain and pass on experience and knowledge is key.
One frequently discussed strategy being considered by employers is phased retirement, or the gradual reduction of hours until full retirement. While this strategy has its own set of challenges to overcome, many view it as a promising and beneficial way to counteract the large aging workforce. The concept of phased retirement is still growing with one survey finding that only 39% of employers offer flexible scheduling and 31% facilitate moving workers from full-time to part time roles. In the coming weeks we’ll explore more trends on phased retirement and opportunities presented by the aging of America’s workforce. If this topic is relevant to you, “follow” us to stay updated!
* * *
About Doctor’s Choice:
Doctor’s Choice is the premier service advocate for Medicare, making healthcare transitions easy for employers and their employees. Founded by a Brown University-trained Physician, they deliver best-in-class service to seniors before, during and after their transition to Medicare. Offering coverage across the country and tech-enabled personalized guidance through their Turbo Medicare Roadmap, Doctor’s Choice provides concierge-level service and healthcare advocacy to our members for life. For more insights on retirement trends and employer strategies for an aging workforce, follow Doctor’s Choice on LinkedIn @DoctorsChoice, Twitter @DoctorsChoiceU, and Facebook @DoctorsChoiceUSA.