The dire demographics have us worry about how the world or the country will look like with a more aged population. I believe that this growing concern mostly explains the success of my “Welcome to the land of the elders “ post where I approached from several angles the paradigm shift that the society and businesses face as populations grow increasingly as birth rates are lower.
One thing is clear. At 65, we will only remotely resemble those who are currently 65, and that for several reasons. The impact that the late 1960s babyboomers turning 65 will have on Romania can be predicted by looking at how the retiring baby boomers, an unusually numerous generation born in the West between 1995 and 1960, affect Western countries.
It is not by chance that people aged between 65 and 75 are called in Japan, a country boasting one of the highest life expectancy, “the yold”, a mix between “young” and “old”. It is, I reckon, a term that reflects extraordinarily well the professional and personal prospects that Romanians who are now in their mid-50s have going forward. The impact of having such a huge number of employed people retire over a short period of time, 15 to 20 years from now, will prove too much for the budget. Not only will it be deprived of their social security contributions, but will also have to pay them pension benefits.
The incumbent Finance Minister actually acknowledged that the public pension system will be unable to financially sustain the retirement of the baby boomers because of the reversal of the population pyramid where the number of those financially supported exceeds the number of those supporting them. But there is a silver lining to all this and to understand it we need to accept the fact that our old age has good reason not to resemble our parents`.
The most relevant change will probably be people`s willingness to continue to work beyond the age of 65. This is good news on several grounds. Firstly, all research suggests that cognitive decline is slower in those who stay in employment for longer periods of time, meaning that the mental health of the elderly will take longer to deteriorate.
Besides the mental health benefits, the financial advantages are not to be ignored. Income in retirement is expected to plummet by 55 – 60%, but that could be partially offset or delayed by staying employed for longer. It will also mean that future sexagenarians` desire to travel, pursue their hobbies and look for new experiences will also have the right funding.
At the macroeconomic level, the shock to the budget will be mitigated by a longer transition at the end of which the baby boomers will turn from social security contributors to recipients.
For that to happen, however, the bias against older people that businesses continue to entertain needs to change. What we are seeing is a paradox. On the one hand, HR or executive managers complain about skilled labor shortages or frivolous younger generations which either fail to show up for job interviews or change jobs only a few months in or, to top it all, are unwilling to consistently work overtime.
On the other hand, the desire to hire older people is low with some recruitment experts even talking about negative discrimination by employers against people approaching their 50s: whether in promoting, recruiting or training them.
I remain an optimist and believe that as time passes employers will be forced to rethink their hiring policy and make them more age-friendly.
The explanation lies in the younger generations` wishes who, ironically are increasingly more like those of older generations. The young employee willing to burn himself/herself out working for 12 hours is about to be gone. Moreover, younger generations of workers don`t seem to put financial benefits first anymore and tend to be more interested in other dimensions that their job has to offer: the quality of relationships with both bosses and colleagues, personal development opportunities, the corporate social mission and so on.
At the same time, companies are more open to flexible working hours. Whether it is the time work starts, working at home or part time, they all perfectly suit the desires and needs of older employees. Given all this I think that the main leap is in terms of employer mindset and bias according to which seniors are associated with lower productivity.
This bias will be harder and harder to hold. Research quoted by The Economist shows that teams of workers from multiple generations tend to be the most productive. Going forward, productivity will no longer rely solely on an excessive number of hours put in at work, but on the quality of work, experience, know-how and the personal/professional web of relations that you can offer, irrespective of age.
All of this will push companies to revisit their current prejudices which keep their more senior fellow citizens outside the labor market in spite of growing demand, a sense of balance, wisdom and experience that they can share with younger coworkers.
This should remind employers the old saying: “Buy a senior if you don`t have one.”
But staying healthy will be crucial. That requires an important change to the way we think and act. To remain attractive on the labor market even in old age, the approach to health will have to be proactive and not reactive.
