Why Leaders Need to Value Their Retirement-Age Workforce

CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.

Take a quick guess which age group is the fastest growing segment of the labor force in the United States? If you said millennials or Gen Z, or maybe parents returning to the workforce after a pandemic break, you’d be wrong. By far, it’s people who are 65 and older. In the US alone, around 10,000 people reach this age group each day, and it’s not just an American phenomenon. In Germany, Italy and Japan, already more than a quarter of the workforce is over the age of 55.

Today’s guest warns that if companies don’t watch out, these workers will walk away sooner than they’d like, taking their experience, skills, and social acumen with them. And he argues that organizations should make some bold changes to how they value these workers and create opportunities for them.

Ken Dychtwald is the founder and CEO of Age Wave, an organization that studies the workforce implications of an aging population. With Katy Terveer and Robert Morison, he wrote the HBR article, Redesigning Retirement. Welcome, Ken.

KEN DYCHTWALD: Great to be with you.

CURT NICKISCH: Ken, since the pandemic in the U.S. at least, labor force participation has been going down while the number of jobs has been going up. It’s really pronounced in some fields like healthcare. How have organizations typically viewed their aging workforce when they have challenges kind of bridging this gap?

KEN DYCHTWALD: Well, the story is really quite fascinating and let me back it up a little bit. When Social Security was set in motion in the 1930s and similar programs in other parts of the world, the life expectancy was only 63. But what was a piece of that puzzle that most people aren’t aware of is that the unemployment levels were 25%.

CURT NICKISCH: Yeah, it’s kind of the opposite problem today.

KEN DYCHTWALD: Yeah, and partly what got set in motion was this belief that people over 65 were no longer capable of working. They didn’t really have anything to contribute. Young was good, old was not so good. And so here we are today where we have high demand for all sorts of talents, and we don’t have the people to fill those slots, whether it’s doctors or FBI agents or engineers or pilots or greeters at Walmart.

And we’ve got tens of millions of people over 60 or 65, and that number is growing because of the demography of the baby boom, which I’ve referred to as an age wave. And a lot of those people say they’d like to keep working for another two or five or 10 years. So on the one hand, we’ve got gaps and challenges with regard to how do we find people who can do these jobs. On the other hand, we’re pushing people out the door because of an old notion that they were no longer worthwhile.

CURT NICKISCH: And that behavior hasn’t really changed, it sounds like?

KEN DYCHTWALD: I would have to say that in the last year or two, the subject has gotten hot and it’s almost like we’re entering a new age of aging. So there’s Harrison Ford becoming Indiana Jones again at 81. There’s Jagger, the Rolling Stones in his ninth decade of life back out on tour. There’s Martha Stewart on the cover of Sports Illustrated Swimsuit issue. So all of a sudden we’re scratching our heads and saying, wait a minute, these people are not looking or acting old the way it used to be. What 70 or 80 looks and feels and acts like is very different than it’s ever been throughout history.

There’s a lot of talented people in their 60s and 70s who are doing their best work ever. The highest rate of entrepreneurial success are people over 55 now who’ve got a little bit of life experience and they know how to make things work well. So you would expect that there would be more responsiveness on the part of employers, but they’re moving slowly, but they are beginning to realize that this is a change that they’ve got to undertake. Which is to do a better job of keeping people a little bit longer or recruiting people who might be at an age that they would’ve otherwise disregarded, or finding ways to make age diversity part of their identity.

CURT NICKISCH: Well, you just gave a bunch of examples of people who probably can afford to retire but want to keep working. It sounds like there’s some demographics at play, some changes in society that companies are not keeping up with.

KEN DYCHTWALD: Yeah, on the one hand, so why would people want to work longer? I mean, well, one of them is with rising longevity, should we be in some way tracking how many years we work to how many years we live? And if you’re 65 today, you’ve got another almost 20 years of life expectancy. That’s a long time to be living a life of leisure. So a lot of people are thinking, “I think I would like to work a bit longer.”

The second reason is socialization. You get a chance to have connection with people. And the third reason is that a lot of people have begun to realize, “My goodness, I might need to work a little bit longer just because I’ll need the money to build a bigger nest egg for a longer life.” So what we’re seeing is an awakening on the part of the workforce.

CURT NICKISCH: It’s also interesting hearing about this at a time when AI is the big business conversation today where a lot of companies are thinking that is the solution for job shortages in some areas.

KEN DYCHTWALD: Well, AI is an answer. We’re living in a world where there’s no question that AI will take over more and more of the functions that human intelligence has historically performed. But there are still people jobs, and there are still relationship jobs, and there are still leadership roles to be fulfilled by people. I’m not just talking about labor, I’m talking about talent. There’s a lot of people in their 60s and 70s with a lot of that talent, and we shouldn’t be pushing them out the door and assuming that AI can take the job.

CURT NICKISCH: So we have this wave in the United States. I also mentioned some established industrial economies like Germany, Italy, and Japan. Does this pattern hold globally too?

KEN DYCHTWALD: It’s a fascinating phenomenon because we often think that this is unique to the U.S. phenomenon. It is not. In fact, we are only 40th worldwide with regard to our longevity. There are many, many, many countries in the world that have an older demographic than we do. We hear about Japan, we hear about Germany, we hear about China as going very swiftly towards an aging population. In 1950, the life expectancy in China was only 45 years, and the average woman was having six children. Now they’re down to about 1.2, 1.3 children per family, and the life expectancy is just past ours. So that’s a speed of change. And China will in the years to come become an older population than the world has ever seen. And so this issue is not just for North American employers or leaders to think about, but it’s a global issue as well.

CURT NICKISCH: It’s also interesting that this is coming at a time when the gig economy, the freelance economy has been growing. A lot of people associate that with a young person’s game, but that structural shift in the economy might actually open some doors to companies who want to leverage this workforce.

KEN DYCHTWALD: So one of the interesting things is my company Age Wave has been surveying pre-retirees and retirees all over the world now for 25 years, and many older people, the new 50 and 60-year-olds are saying they want to keep working a few more years, but they don’t want to necessarily work full time and they’re open to trying different things. So that’s kind of amazing because when my grandparents reached their 60s or 70s, they weren’t thinking about a gig economy or reinventing their careers. They were imagining that they’re on the last ending of life and it was time to wind down.

And so the good news is that many of these 60 or 70-year-olds are open to doing gig work. And now whether that’s driving an Uber-type transportation vehicle or whether that’s only coming in two days a week, or whether it might be working on projects or assignments that only have three or six or nine months to them. So there’s a lot more flexibility within the new generation of people who are near or in the retirement stage of their lives to do more gig work or work on flexible projects or maybe put in fewer hours.

CURT NICKISCH: We may have made this point already, but I think it’s good to just underline it. Spell it out for us. What is the business case for companies to look more carefully at this group of workers?

KEN DYCHTWALD: I’m going to make three arguments for what the business case is. And I wouldn’t say that everybody who’s had a 60th or 70th birthday is perfect. It’s just like every other group in every other life stage. There’s some talented people and there’s some less talented people. But I would also tell you that the track records have more on display than a 25-year-old might. If you’re talking to a 60-year-old, you can see if they’re good at sales or not, or you can see if they’re good with people or not. They’ve got a track record that they’ve laid down. Let me give you the three arguments.

One of them is there’s a shortage of workers right now and there’s a shortage of talent right now. And who can think of another time in our lives where that’s been so pronounced when you’re thinking, “How am I going to possibly get this work done? I can’t find the people.” Where I live, every store and every situation I find myself in it says, “Hiring.” So there’s a lot of people looking for talent, but they don’t necessarily look towards older people because they think they’re over the hill. Well remove your blinders and get over that bias and that ageism. There’s a lot of talent there waiting to be hired.

Second point is that older people have a body of emotional intelligence that we’ve never encountered before that they have been through. For example, I was there for when my dad died. I was there when my mom died. My wife and I raised two kids. You know, we’ve even through ups and downs in the economy, ups and downs in the marketplace. So I may not have a higher IQ than I did when I was 25 now that I’m in my 70s, but I surely got a higher EQ. And having some people with a little bit of perspective and vision and big picture is valuable.

Third, more and more of our users, our customers, our clients are 60 and 70 themselves. And so having people on your team who can give voice to the issues, the needs, the worries of empty nesters, of people who are maybe are grieving or maybe have been divorced or widowed or conceivably are just eager to reinvent themselves. I mean, we don’t think of Bill Gates as being an old guy. We think of him that he used to be a CEO and now he’s a philanthropist. So the idea of imagining people with an appetite to reinvent themselves.

I was working with a healthcare system a few years ago and they decided to take a number of the sanitation workers who worked for the system, who were loyal and hardworking and trustworthy and train them to become nurses. And it worked. And so the idea of these are people who are available, you’re looking for talent, there you go. Second, they’re loyal often more than younger people. They have a certain degree of perspective because of the years they’ve lived. That kind of wisdom and emotional intelligence doesn’t come so quickly when you’re in your 20s and 30s. And third, they’re willing to plug and play and they’re willing to try new things. And that was never the case before for people at that stage of life. We are entering a new age of aging, and the folks you might be willing to talk to are open to trying new things more than ever before.

CURT NICKISCH: You have spelled out kind of a five-part strategy for companies to rethink how they approach talent and how they manage this workforce. It’s preserve experience, replenish experience, share experience, offer flexibility and leverage age diversity.

So let’s run through them starting with preserve experience. It sounds like, and you mentioned this already, if you have these workers already, it’s kind of the first place to look to keep them on or find ways to keep them around longer rather than letting them go and then figuring out how to replace them.

KEN DYCHTWALD: Maybe I’m a little bit of a wise guy, but the way this looks to me is like a Three Stooges show where on the one hand you got a hole in the boat and you’re trying to cover it up. On the other hand, you’re trying to row the boat. So companies are always trying to recruit talent while they’re pushing 63-year-olds out the door. Why don’t you work out programs or affiliations so that you can keep people a bit longer? Boom. We have examples in our article like the principal financial group that’s created on ramps to more flexible work and maybe phased retirement, which is what a lot of people say. They want to keep working, they just don’t want to work as hard.

And by the way, I’ve given talks to college students and when they hear that they cheer because they don’t want to work as hard either. Maybe our older workers are giving us an example of what the new balance between work and leisure is going to look like. So keep some of these people, particularly the good ones, particularly the talented ones and the ones that are eager to keep going. And I’ll add to that that sometimes if you’re pushing people out the door but they want to keep working, they’ll go work for your competitor.

CURT NICKISCH: That’s actually the perfect lead-in to replenish experience because if people are leaving, you need to replace those workers. If other companies aren’t hanging onto those workers, you might want to go and hire them and recruit them.

KEN DYCHTWALD: Yes. And think of those workers, and also think of some of your older workers who you may not be pushing out the door. They may need some new learning and experience. And often companies when they think of their training departments or their educational programs, they think of training new recruits or young people, but there might be 60-year-olds that need to better understand the new technologies or understand the new directions in the company or understand what’s going on in the world from a fresh perspective. Replenishing doesn’t only mean finding talent from some of your competition, but it might also mean keeping people but re-educating them, retraining them, giving them kind of a new lease on their work with you.

CURT NICKISCH: Which seems to be one of the desires of older workers is often just to get to do something new or have some variety, be able to basically get a new job without having to change employers.

Now, you had a really interesting takeaway in the article under the strategy of replenish experience, and that was to basically say, don’t put a cap on years of experience when you have a job listing, a job posting. And also try to avoid using phrases like energetic or digitally savvy, which might make people who are applying think that this is only intended for younger workers. You actually say to field test your organization’s career site with a small panel of older employees and retirees, which makes a ton of sense, but it’s just never something I’ve heard before.

KEN DYCHTWALD: I’ve been absolutely mind blown over the decades with how much ageism floats under the surface. And you might not think about it, but your company’s HR department may be looking for young people like they are, and they may be using phrases and words in their ads or their recruitment: “High energy, swift with technology, eager to meet new people.” There’s little buzz phrases that they may not even realize are not going to be quite as captivating to an older person because they can kind of feel that they’re looking for young people here.

So yeah, how do you know that if you’re 32 or 37 or 41 that you may be spewing ageist ideas and ageist recruitment sub-messaging? And the best way to find out is either talk to some of your older workers and have them review that copy or talk to some older people and say, “We’re thinking of hiring and we’re going to use language like this. What do you think?” And you may be surprised to find that hidden within a lot of your messaging, or the pictures that you might have accompanying your report or your website, give somebody the impression who’s older, “They’re not looking for me.”

CURT NICKISCH: Now, another key way that you suggest that organizations can keep that experience around is share experience. What role do you see for seasoned employees and companies to add value by passing on their knowledge? And what kind of opportunity is there that companies aren’t realizing now to be able to take this breadth of experience in this group of older workers and share it with workers of other generations in the company?

KEN DYCHTWALD: The biggest thing has to do with there’s a desire when you turn 50 and 60 and 70 to kind of share your life lessons. So mentoring becomes a role for people to play, and they may not necessarily want to manage a division or a department. They may want to just help the younger people figure out how to do it better and avoid mistakes. So mentoring in all sorts of things. It doesn’t have to be high-tech jobs. It could be working in a grocery store.

The other thing is that older people have probably learned along the way what to avoid and what to do more of in order to be effective. And you can spend decades trying to figure that out when you’re a worker, why not get the shortcuts? If I were going camping and there were some people coming back from where I was heading out, I’d be wise to ask them, were there any beautiful sunrises to be seen? Where’s the fresh water? Is there any place that’s dangerous? It conceivably could make your trip a better trip. So not just mentoring in terms of skills, but mentoring in terms of effectiveness as a worker, as a salesperson, as a school teacher. Why not get that from older people?

CURT NICKISCH: Now the next strategy that you write about is offering flexibility. We’ve talked about this a little bit in just redesigning your retirement to be able to phase it out more, retire at a different age, be able to stay longer when it’s mandated that you leave at a certain age, for instance. What other kind of flexibility do you think that organizations can offer workers in this age group?

KEN DYCHTWALD: So there’s a few different arms and legs to flexibility. One them is timing. Most people when they reach their 50s and 60s, believe it or not, have more free time. We figured it out in the United States, the boomers due to retirement and empty nesting are going to have 3.9 trillion hours of free time over the next 20 years. And because they’re not encumbered by getting their kids to school or caregiving a parent, they’re more freed up. But also they don’t want to work full-time, that the idea of full-time work is only appealing to about 10 or 20% of older workers.

So people say, “Well, we can’t change our rules around how many hours a week you work.” Well, I would remind you of the 1970s when boomer women started applying for jobs, employers said, “We’re not going to offer leaves. We’re not going to care for your kids. Take them to preschool. Sorry, that’s not the way the workforce works.” But that’s all been transformed because these women were so capable and so talented. I think you’re going to see another revolution happening where older workers are going to create more flexible timing.

The second thing is location. People might want to work from home or they may live far away and they can work out of their home a thousand miles away from your office.

Third have to do with benefits. Some people want to keep working longer because there are benefits, particularly until you’re 65 when things like Medicare kicks in. But by the way, that’s an asset because your 65-year-old workers already have a healthcare benefit, and you may want to supplement it, but pushing people at the door, 62 or 63, they’re scratching their head and saying, “Oh my, I all of a sudden have to pick up my healthcare costs.” So those benefits become particularly meaningful for that group.

And then I would say personalized transitions. I imagine once upon a time it was like a light switch. You worked and then you didn’t. Well, there may be people who want to boomerang, maybe they’re retired, but they don’t like being retired. Have you thought of bringing them back? Maybe there’s people who would rather go down to four days a week and then three days a week and then two days a week, and maybe you can work out that personalized transition.

I haven’t seen many employers that offer any courseware on how to make the transition into this new chapter in your life. Yeah, there’s 401(k) discussions and there’s financial workshops, but what about volunteering? What about where might I live? What about who can I be become? What might my new purpose be? And so there’s a lot of room to personalize the transition, but also help your workforce make the most of the chapter that’s in front of them. And so flexibility rather than light switch, I think is the way we need to think about this.

CURT NICKISCH: Now, your article mentioned a couple of specific practices that I thought were really insightful and underscore what you’re talking about here with flexibility. You suggest offering dental insurance because that’s something that Medicare in the United States doesn’t fully cover. So if you are trying to tailor benefits to attract this workforce, that’s something you might want to considering offering if you don’t do it already.

KEN DYCHTWALD: Another thing is offering caregiving benefits, not just for children, but for parents. Could you offer elder care programs or benefits or services? HR department might say never thought of that, but we’ve heard of companies that are even offering long-term care insurance as a benefit, and if that were spread around a larger population, it would be less expensive. And there’s a lot of people who would view that as highly desirable.

And last I want to say that another benefit is just giving people some respect. I mean, you get a little bit older in this country and all of a sudden you start to realize that there’s a lot of ageism. And a benefit, which is not a formal piece of compensation, but showing some respect and letting people think that they’re worthwhile.

CURT NICKISCH: I’m also going to just mention one other benefit that made me raise my eyebrows because I just hadn’t heard of it, but it makes total sense. A few organizations are now offering leaves for grandparents, grandparental leave, which is a reason sometimes people retire. But what if you can actually take time off to spend time with a new grandchild and then return to work when you’re ready? You also talk about offering sabbaticals to older workers. So there is a lot of creativity and a lot of specific policies that you mentioned in the article that I just had not heard of.

The final strategy in your list is leveraging age diversity. We’ve touched on this a little bit. What role does that play in helping organizations address this issue?

KEN DYCHTWALD: First, let me share a perspective. What we’ve been living through is a century where all of a sudden young people have been exalted and then obsessed upon. And the roaring 20s is all about youth. And then when the boomers came along and modern marketing got its bearings, there was the belief that people would be brand loyal for life. And so you should heavy up all your programming, all your shows, all your movies, all your ads to young people because that’s who you wanted to target. Those are the words literally, youth demographic – this was their perception, which is like saying the heck with you if you’re not a young person.

So we now have a age-diverse workforce, and a lot of people are not comfortable putting their older workers in their brochures and their annual reports because they think that people will think they’re losers if they do that. So we’ve got to be more courageous and more futuristic and reinvent our thinking that having young and middle-aged and old working together and contributing each in their own ways as we’ve been discussing, but also that age diversity better aligns with the consumer marketplace, it better aligns with the future, and it is just kind of the sensible and moral and increasingly demanded way that people want their employers to be thinking about them and their older and younger colleagues.

I would say, realize that some of your thinking may be set in the past. You may be all futuristic when it comes to your technology but old-fashioned when it comes to your biases. And then begin to recognize that there’s a lot of talent among 50 and 60 and 70 year olds particularly, that is being pushed out the door.

CURT NICKISCH: Well, Ken, I believe you’ve shown that companies have a lot of room for improvement, and you’ve also shown some specific ways that they can make changes in that regard. Thanks so much for coming on the show to talk about this.

KEN DYCHTWALD: Thank you, Curt.

CURT NICKISCH: That’s Ken Dychtwald, the founder and CEO of Age Wave, and co-author of the HBR article, Redesigning Retirement. You can find it at hbr.org.

And we have nearly 1,000 more episodes plus more podcasts to help you manage your team, your organization, and your career. Find them at hbr.org/podcasts or search HBR in Apple Podcasts, Spotify, or wherever you listen.

Thanks to our team, senior producer Mary Dooe, associate producer Hannah Bates, audio product manager Ian Fox, and senior production specialist Rob Eckhardt. Thank you for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Curt Nickisch.