THE

BIG
IDEA
REPRINT BG1806
PUBLISHED ON HBR.ORG
NOVEMBER 2018

THE AGING
WORKFORCE
YOUR WORKFORCE WILL KEEP GETTING OLDER.
DO YOU HAVE A STRATEGY?
BY PAUL IRVING
 THE AGING WORKFORCE

03 ARTICLE
WHEN NO ONE RETIRES
09 ARTICLE
THE LONGEVITY
OPPORTUNITY
11 ARTICLE
RETHINKING RETRAINING
16 A
 RTICLE
CARING FOR YOUR
COMPANY’S CAREGIVERS
20 ARTICLE
RETIREMENT-PROOF YOUR
COMPANY
23 DATA
JUST HOW OLD ARE WE
GETTING?
29 ARTICLE
WHAT HAPPENS TO
YOUNGER WORKERS
WHEN OLDER WORKERS
DON’T RETIRE
ILLUSTRATIONS BY MARK SMITH

 HBR.ORG THE BIG IDEA 2

 THE AGING WORKFORCE

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WHEN NO
ONE RETIRES
YOU CAN SEE THE GRAYING OF YOUR WORKFORCE AS A CRISIS — OR
AN OPPORTUNITY.
BY PAUL IRVING
Before our eyes, the world is undergoing a massive demographic
transformation. In many countries, the population is getting old.
Very old. Globally, the number of people age 60 and over is projected
to double to more than 2 billion by 2050 and those 60 and over will
outnumber children under the age of 5. In the United States, about
10,000 people turn 65 each day, and one in five Americans will be 65
or older by 2030. By 2035, Americans of retirement age will eclipse the
number of people aged 18 and under for the first time in U.S. history.
The reasons for this age shift are many — medical biggest influence on “the future of national economic
advances that keep people healthier longer, dropping health, public finances, and policymaking” will be
fertility rates, and so on — but the net result is the “the irreversible rate at which the world’s population is
same: Populations around the world will look very aging.”
different in the decades ahead. This societal shift will undoubtedly change work,
Some in the public and private sector are already too: More and more Americans want to work longer —
taking note — and sounding the alarm. In his first term or have to, given that many aren’t saving adequately
as chairman of the U.S. Federal Reserve, with the Great for retirement. Soon, the workforce will include people
Recession looming, Ben Bernanke remarked, “in the from as many as five generations ranging in age from
coming decades, many forces will shape our economy teenagers to 80-somethings.
and our society, but in all likelihood no single factor will Are companies prepared? The short answer is
have as pervasive an effect as the aging of our popula- “no.” Aging will affect every aspect of business opera-
tion.” Back in 2010, Standard & Poor’s predicted that the tions — whether it’s talent recruitment, the structure

©2018 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.

 THE AGING WORKFORCE
THE AUTHOR
PAUL IRVING
of compensation and benefits, the development of Paul Irving says he became
products and services, how innovation is unlocked, seriously interested in the
issues of aging and longevity
how offices and factories are designed, and even how almost serendipitously.
work is structured — but for some reason, the message “When I began my work at
just hasn’t gotten through. In general, corporate lead- the Milken Institute, I fell
ers have yet to invest the time and resources necessary into a project focused on
to fully grasp the unprecedented ways that aging will urban adaptations for an
change the rules of the game. aging population. I realized
that this unprecedented
What’s more, those who do think about the im- demographic shift would
pacts of an aging population typically see a looming change everything —
crisis — not an opportunity. They fail to appreciate societies, communities,
the potential that older adults present as workers businesses, families, and
and consumers. The reality, however, is that increas- institutions of all types
ing longevity contributes to global economic growth. in incredible ways,” he
says. “But understanding,
Today’s older adults are generally healthier and more planning, action, and
active than those of generations past, and they are urgency were lacking.”
changing the nature of retirement as they continue Formerly a corporate
to learn, work, and contribute. In the workplace, they lawyer, a law firm CEO,
provide emotional stability, complex problem-solving and the president of the
skills, nuanced thinking, and institutional know-how. Milken Institute, Irving is
now the chairman of the
Their talents complement those of younger workers, Milken Institute Center
and their guidance and support enhance performance for the Future of Aging.
and intergenerational collaboration. In encore careers, He’s also a distinguished
volunteering, and civic and social settings, their ex- scholar in residence at
perience and problem-solving abilities contribute to the USC Leonard Davis
society’s well-being. School of Gerontology and
In the public sector, policy makers are beginning to
take action. Efforts are under way in the United States
to reimagine communities to enhance “age friendli- new ways to invest for retirement as traditional in-
ness,” develop strategies to improve infrastructure, come sources like pensions and defined benefit plans
enhance wellness and disease prevention, and design dry up. But such efforts are still early stage, and given
 HBR.ORG THE BIG IDEA 4
the chairman of Encore.
org. Irving’s work involves
conveying to the public the
urgency of our changing
age demography. He
regularly writes for major
media outlets, speaks to
government and corporate
groups, and is involved in
initiatives at the National
Academy of Medicine and
the Bipartisan Policy Center.
He was also a participant
in the 2015 White House
Conference on Aging.
While Irving acknowledges
that an older society will
bring both financial and
health challenges, he’s also
optimistic that we’ll gain
more from this demographic
shift than we’ll lose (his
book, after all, is titled The
Upside of Aging). He’s also
well aware that these issues
aren’t on most leaders’
radar. “Many do understand
that we’re undergoing an
age shift,” he notes. “But too
few recognize the potential
impacts on their businesses,
anticipate what’s needed,
and act as they would
facing other fundamental,
disruptive, and structural
shifts.”
In his writing, Irving raises
the alarm by explaining
where we’re headed — and
what businesses should do
to capitalize on an older
workforce that’s rich with
skill and talent. He also
covers how companies
can design, develop, and
market innovative products
and services to a fast-
growing population of older
customers. What leaders
do today will undoubtedly
affect millions of people
going forward. “This is not
just about improving lives
and opportunities for the
Baby Boomer generation,”
Irving adds. “This is about
the ways life can and will
change for Generations X,
Y, and Z, and those that will
follow.”

the slow pace of governmental change they will likely
take years to evolve.
Companies, by contrast, are uniquely positioned to
change practices and attitudes now. Transformation
won’t be easy, but companies that move past today’s
preconceptions about older employees and respond
and adapt to changing demographics will realize signif-
icant dividends, generating new possibilities for finan-
cial return and enhancing the lives of their employees
and customers. I spent many years in executive man-
agement, corporate law, and board service. Based on
this experience, along with research conducted with
Arielle Burstein, Kevin Proff, and other members of
our staff at the Milken Institute Center for the Future
of Aging, I have developed a framework for building a
“longevity strategy” that companies can use to create
a vibrant multigenerational workforce. Broadly, a lon-
gevity strategy should include two key elements: inter-
nal-facing activities (hiring, retention, and mining the
talents of workers of all ages) and external-facing ones
(how your company positions itself and its products
and services to customers and stakeholders). In this
article, I’ll address the internal activities companies
should be engaging in. I’ll discuss the external-facing
activities in “The Longevity Opportunity,” on page 9.
But first, let’s examine why leaders seem to be over-
looking the opportunities of an aging population.
THE AGEISM EFFECT
There’s broad consensus that the global population
is changing and growing significantly older. There’s
Original: Old World
The Global Aging Phenomenon
Breakdown of world population, by region
Northern Latin America
Europe America and Caribbean
100%
Projected
75
50
65+
25
World
0
2000 ’15 ’30 ’50 ’00 ’15 ’30 ’50 ’00 ’15 ’30
Note: Northern America consists of Canada and the United States.
Source: United Nations, “World Population Prospects: The 2015 Revision”
THE AGING WORKFORCE
also a prevailing opinion that the impacts on society
will largely be negative. A Government Accountability
Office report warns that older populations will bring
slower growth, lower productivity, and increasing de-
pendency on society. A report from the Congressional
Budget Office projects that higher entitlement costs
associated with an aging population will drive up
expenses relative to revenues, increasing the federal
deficit. The World Bank foresees fading potential in
economies across the globe, warning in 2018 of “head-
winds from ageing populations in both advanced and
developing economies, expecting decreased labour
supply and productivity growth.” Such predictions
serve to further entrench the belief that older workers
are an expensive drag on society.
What’s at the heart of this gloomy outlook?
Economists often refer to what’s known as the depen-
dency ratio: the number of people not typically in the
workforce — those younger than 15 and older than 65 —
in a population divided by the number of working-age
people. This measure assumes that older adults are
generally unproductive and can be expected to do
little other than consume benefits in their later years.
Serious concerns about the so-called “silver tsunami”
are justified if this assumption is correct: The prospect
of a massive population of sick, disengaged, lonely,
needy, and cognitively impaired people is a dark one
indeed.
This picture, however, is simply not accurate.
While some older adults do suffer from disabling
physical and cognitive conditions or are otherwise
Asia Oceania Africa
’50 ’00 ’15 ’30 ’50 ’00 ’15 ’30 ’50 ’00 ’15 ’30 ’50
 HBR.ORG THE BIG IDEA 5
 THE AGING WORKFORCE

unable to maintain an active lifestyle, far more are Some companies are pushing back: In a recent
able and inclined to stay in the game longer, dis- video, T-Mobile’s John Legere took on the topic of
proving assumptions about their prospects for work ageist stereotypes while promoting a T-Mobile ser-
and productivity. The work of Laura Carstensen and vice for adults age 55-plus. He chided competitors
her colleagues at the Stanford Center on Longevity for what he called their belittling treatment of older
shows that typical 60-something workers today are adults in marketing campaigns that emphasize large-
healthy, experienced, and more likely than younger size phone buttons and imply that boomers are tech
colleagues to be satisfied with their jobs. They have idiots. “Degrading at the highest level,” Legere calls it.
a strong work ethic and loyalty to their employers. “The carriers assume boomers are a bunch of old peo-
They are motivated, knowledgeable, adept at resolv- ple stuck in the past who can’t figure out how the in-
ing social dilemmas, and care more about meaningful ternet works. Newsflash, carriers: Boomers invented
contributions and less about self-advancement. They the internet.”
are more likely than their younger counterparts to Yet for the most part, employers continue to invest
build social cohesion and to share information and far more in young employees and generally do not
organizational values. train workers over 50. In fact, many companies would
Yet the flawed perceptions persist, a byproduct of rather not think about existence of older workers all.
stubborn and pervasive ageism. Positive attributes of “Today it is socially unacceptable to ignore, ridicule,
older workers are crowded out by negative stereotypes or stereotype someone based on their gender, race,
that infect work settings and devalue older adults in or sexual orientation,” points out Jo Ann Jenkins, the
a youth-oriented culture. Older adults regularly find CEO of AARP. “So why is it still acceptable to do this to
themselves on the losing end of hiring decisions, pro- people based on their age?”
motions, and even volunteer opportunities. Research Over the past decades, companies have recognized
from AARP found that approxi­mately two-thirds of the economic and social benefits of women, people of
workers ages 45 to 74 said they have seen or experi- color, and LGBT individuals in the workforce. These
enced age discrimina­tion in the workplace. Of those, priority initiatives must be continued — obviously,
a remarkable 92% said age discrimination is very, or we’re not even close to achieving genuine equality in
somewhat, common. Research for the Federal Reserve the corporate world; at the same time, the inclusion
Bank of San Francisco backs this up. A study involving of older adults in the business diversity matrix is long
40,000 made-up résumés found compelling evidence overdue. Patricia Milligan, senior partner and global
that older applicants, especially women, suffer consis- leader for Mercer’s Multinational Client Group ob-
tent age discrimination. A case in point is IBM, which serves, “[a]t the most respected multinational compa-
is currently facing allegations of using improper prac- nies, the single class not represented from a diversity
tices to marginalize and terminate older workers. and inclusion perspective is older workers. LGBT, ra-
There’s more: Deloitte’s 2018 Global Human Capital cial and ethnic diversity, women, people with physical
Trends study found that 20% of business and HR lead- disabilities, veterans — you can find an affinity group in
ers surveyed viewed older workers as a competitive a corporation for everything, except an older worker.”
disadvantage and an impediment to the progress of
younger workers. The report concludes that “there MANAGING A MULTIGENERATIONAL WORKFORCE
may be a significant hidden problem of age bias in the How can companies push past stereotypes and other
workforce today.” It also warns that “Left unaddressed, organizational impediments to tap into a thriving and
perceptions that a company’s culture and employ- talented population of older workers? Best practices
ment practices suffer from age bias could damage its have been emerging and some companies are making
brand and social capital.” real progress. Each points to specific changes compa-
The negative cultural overlay about aging is rein- nies should be considering as they develop their own
forced by media and advertising that often portray strategies.
older adults in clichéd, patronizing ways. A classic Redefine the workweek. To start, you need to re-
example is Life Alert’s ad from the 1980s for its med- consider the out-of-date idea that all employees work
ical alert necklace, immortalizing the phrase “I’ve Monday through Friday, from 9 to 5, in the same of-
fallen, and I can’t get up!” Recent ads by E*TRADE and fice. The notion that everyone retires completely by
Postmates have also drawn criticism as ageist. A more age 65 should also be jettisoned. Companies instead
subtle, but just as damaging example is the trumpet- should invest in opportunities for creative mentorship,
ing of “anti-aging” benefits on beauty products as a part-time work, flex-hour schedules, and sabbatical
marketing tool, suggesting that growing older is, by programs geared to the abilities and inclinations of
definition, a negative process. older workers. Programs that offer pre-retirement

 HBR.ORG THE BIG IDEA 6


Original: Working Older
The U.S. Labor Force Is Getting Older, Too
Projected average annual growth rate
by age group, 2014 to 2024
–2% –1 0 1 2 3 4 5 6 7
75 and older
65–74
55–64
45–54
35–44
25–34
16–24
Source: U.S. Bureau of Labor Statistics
and career transition support, coaching, counseling,
and encore career pathways can also make employees
more engaged and productive. Many older workers
say they are ready to exchange high salaries for flexible
schedules and phased retirements. Some companies
have already embraced nontraditional work programs
for employees, creating a new kind of environment for
success. The CVS “Snowbird” program, for example,
allows older employees to travel and work season-
ally in different CVS pharmacy regions. Home Depot
recruits and hires thousands of retired construction
workers, making the most of their expertise on the
sales floor. The National Institutes of Health, half of
whose workforce is over 50, actively recruits at 50-
plus job fairs and offers benefits such as flexible sched-
ules, telecommuting, and exercise classes. Steelcase
offers workers a phased retirement program with re-
duced hours. Michelin has rehired retirees to oversee
projects, foster community relations, and facilitate
employee mentoring. Brooks Brothers consults with
older workers on equipment and process design, and
restructures assignments to offer enhanced flexibility
for its aging workforce.
Reimagine the workplace. Your company should
also be prepared to adjust workspaces to improve er-
gonomics and make environments more age-friendly
for older employees. No one should be distracted
from their tasks by pain that can be prevented or
eased, and even small changes can improve health,
safety, and productivity. Xerox, for example, has
THE AGING WORKFORCE
Breakdown by age group,
1970 to 2024
75%
25–54
50
16–24
25
55 and older
Projected
0
1970 ’80 ’90 2000 ’10 ’14 ’20 ’24
an ergonomic training program aimed at reducing
musculoskeletal disorders in its aging workforce.
BMW and Nissan have implemented changes to their
manufacturing lines to accommodate older workers,
ranging from barbershop-style chairs and better-de-
signed tools to “cobot” (collaborative robot) partners
that manage complicated tasks and lift heavier ob-
jects. The good news is that programs that improve
the lives of older workers can be equally valuable for
younger counterparts.
Mind the mix. Lastly, you need to consider and
monitor the age mixes in your departments and teams.
Many companies will need to manage as many as five
generations of workers in the near future, if they aren’t
already. Some pernicious biases can make this diffi-
cult. For example, research shows that every genera-
tion wants meaningful work — but that each believes
everyone else is just in it for the money. Companies
should emphasize workers’ shared value. “Companies
pursuing Millennial-specific employee engagement
strategies are wasting time, focus, and money,” Bruce
Pfau, the former vice chair of human resources at
KPMG, argues. “They would be far better served to fo-
cus on factors that lead all employees to join, stay, and
perform at their best.”
By tapping ways that workers of different genera-
tions can augment and learn from each other, compa-
nies set themselves up for success over the long term.
Young workers can benefit from the mentorship of
older colleagues, and a promising workforce resource
 HBR.ORG THE BIG IDEA 7
 THE AGING WORKFORCE

lies in intergenerational collaboration, combining the about initiating a massive culture change for firms — a
energy and speed of youth with the wisdom and ex- change that must come from the top.
perience of age. But ignoring the realities of the demographic shift
PNC Financial Group uses multigenerational teams under way is no longer an option. CEOs and senior
to help the company compete more effectively in the executives will need to put the issue front and cen-
financial markets through a better understanding of ter with HR leaders, product developers, marketing
the target audience for products. Pharma giant Pfizer managers, investors, and many other stakeholders
has experimented with a “senior intern” program to who may not have it on their radar screens. This will
reap the benefits of multigenerational collaboration. take guts and persistence: Leaders must bravely say,
In the tech world, Airbnb recruited former hotel mo- “We reject the assumption that people become less
gul Chip Conley to provide experienced management tech-savvy as they get older” and “We will fight the
perspective to his younger colleagues. Pairing younger impulse to put only our youngest employees on new
and older workers in all phases of product and service initiatives.” To genuinely make headway on this long-
innovation and design can create opportunity for pro- range issue, companies will have to make tough, and
fessional growth. And facilitating intergenerational re- sometimes unpopular, decisions, especially in a world
lationships, mentoring, training, and teaming mitigate where short-term results and demands dominate
isolation and help break down walls. leaders’ agendas. But isn’t that what great leaders do?
To begin this process, start talking to your employ- The business community has a chance to spear-
ees of all ages. And get them to talk with each other head a broad movement to change culture, create op-
about their goals, interests, needs, and worries. Young portunity, and drive growth. In doing so, companies
and old workers share similar anxieties and hopes will improve not only mature lives, but lives of all ages,
about work — and also have differences that need and the prospects of workers for generations to come.
to be better understood companywide. Look for op- This transformative movement to realize the potential
portunities for engagement between generations and of the 21st century’s changing demography is the next
places where older and younger workers can support big test for corporate leadership. 
one another through skill development and mentor-
ship. After all, if everyone needs and wants to work,
we’re going to have to learn to work together.
To be clear, all of these changes — from flexible
hours to team makeup — will require a recalibration
of company processes, some of which are deeply in-
grained. Leaders must ask, do our current health in-
surance, sick leave, caregiving, and vacation policies
accommodate people who work reduced hours? Do
our employee performance-measurement systems
appropriately recognize and reward the strengths of
older workers? Currently, most companies focus on
individual achievement as opposed to team success.
This may inadvertently punish older employees who
offer other types of value — like mentorship, forging
deep relationships with clients and colleagues, and
conflict resolution — that are not as easily captured us-
ing traditional assessment tools. Here, too, initiatives
aimed at older workers can benefit other workers as
well. For instance, research suggests that evaluating
team performance also tends to boost the careers of
employees from low-income backgrounds.

TURNING A CRISIS INTO AN OPPORTUNITY

I’m admittedly bullish about the positive aspects of
working longer and believe that company leaders can
harness the opportunity of an aging population to gain
competitive advantage. But I’m not oblivious to the
challenges a longevity strategy poses. We’re talking

 HBR.ORG THE BIG IDEA 8


ARTICLE
THE LONGEVITY OPPORTUNITY
New consumer markets for an aging world.
A
by Paul Irving
s the global population
ages, new consumer
opportunities and
markets will emerge.
Every company should
have a strategy for tapping into the
needs, wants, and buying power of
older customers.
In my previous article, I outlined the
beginnings of an internal, employee-
focused “longevity strategy” that
organizations can use to reap the
benefits of an aging workforce. In this
one, I’ll discuss its external, consumer-
facing complement.
The market for products and services
for older adults is already strong, and it
will become even stronger. With distinct
consumption habits and service needs,
Americans over 50 accounted for $7.6
trillion in direct consumer spending and
related economic activity in 2015, and
controlled more than 80% of household
wealth, according to a 2016 joint report
from Oxford Economics and AARP.
Further, a 2010 AARP survey reveals
that 90% of older adults say they
want to be able to remain in their own
THE AGING WORKFORCE
homes as they age. Envisioning how
communities will respond to the needs
of aging people will keep many more of
them in their homes and contributing to
the economy. Bank of America Merrill
Lynch projects that the global spending
power of those age 60 and over will
reach $15 trillion annually by 2020.
But the potential for forward-thinking
companies goes beyond just an
interesting business opportunity. Older
adults are poised to shape consumer
and capital markets in the years ahead.
The McKinsey Global Institute concludes
that the 60-plus population, one of the
few engines of global economic growth,
is on track to generate half of all urban
consumption growth between 2015
and 2030. “The Longevity Economy is
redrawing economic lines, changing
the face of the workforce, advancing
technology and innovations, and
busting perceptions of what it means
to age,” states the Oxford Economics/
AARP report.
GETTY IMAGES
Across industries, there are multiple
avenues for offering products and
services that make a difference
 HBR.ORG THE BIG IDEA 9
in people’s lives. In the health
sector, “gray is the new black,”
a Reuters piece observed. New
offerings in biotechnology, devices,
pharmaceuticals, and care services all
target older consumers.
Research reveals that older adults
dominate spending in 119 of 123
consumer packaged goods categories,
spend more in grocery stores and
purchase more new cars than any
other age group, and account for 80%
of luxury travel. The demographic is
eager to spend on transportation,
entertainment, food, and alcohol,
representing an immense target market
for fresh ideas and innovations.
The financial services industry has
always catered to older people —
primarily those planning for retirement.
As customers and clients prepare
for longer lives, retirement remains
a powerful growth driver. But a
financial market for older workers and
entrepreneurs is rapidly expanding too.
Driven by financial assets controlled
by older investors, this segment of the
longevity market simply cannot
be ignored. People age 60 and over
hold the majority of wealth worldwide
and 70% of the disposable income in
the U.S.
For most companies, longevity
marketing is still in its early days. That
must change. You need a strategy for

older consumers, and identifying new
opportunities and markets is just the
first step. You and your employees also
need to reconsider what you “know”
about this population to avoid ageist
and outdated messaging. Incorporate
older employees into product planning,
design, and communications to
benefit from their experience and
understanding. Use focus groups that
include older participants to test
products and services before they make
it to market.
While most companies are in the
early stages of developing their
strategies, it’s worth exploring what
some industry leaders are up to.
Philips and Nestlé have
fundamentally shifted their businesses
to capitalize on trends that are driven
in many ways by the aging population.
Both global companies have focused
their futures on health and wellness,
recognizing the massive opportunities
ahead. In partnership with the
Global Social Enterprise Initiative at
Georgetown University’s McDonough
School of Business, Philips is
developing new technologies that can
meet the needs of its older customers,
including connected care solutions,
safety applications, and cognitive
health innovations. Patients and their
doctors will be able to see, monitor,
and share vital health information
through secure devices, for example.
Nestlé is investing in personalized
diet and nutrition initiatives, and is
broadening its portfolio by buying or
acquiring stakes in health supplement
and pharmaceutical companies.
Best Buy, with its recent acquisition
of GreatCall, the provider of
connected health and personal
emergency services to the aging
population, is focused on building
relationships with older consumers.
By gaining access to GreatCall’s
customer base, Best Buy can further
penetrate the health services and
THE AGING WORKFORCE
monitoring business and grow through
its supply chain efficiencies and
marketing reach. Several analysts
hailed the acquisition, praising Best
Buy for recognizing the market’s size
and potential and the opportunity
for a services business line to
diversify the company’s offerings and
counterbalance the margin pressures
on electronics products.
Bank of America Merrill Lynch is
training its customer-facing workforce
to understand the needs of its aging
clients. The bank recognizes that
increasing longevity leads to new
health care choices, housing issues,
and questions about retirement and
financial security. In partnership
with the USC Leonard Davis School
of Gerontology (which I’m affiliated
with), the company’s longevity training
program teaches financial advisers
about older people’s experiences,
priorities, and goals.
Uber and Lyft have developed
programs to provide rides for older
adults through age-friendly web tools,
apps, and phone systems. Recognizing
the importance of mobility to health
and well-being, both ride-hailing
companies are creating partnerships
and scaling up efforts to facilitate
access and ease of use for older adults
and their families and caregivers. For
example, both companies are working
with call services (Lyft with GreatCall
and Uber with RideWith24) to make it
easier for older adults to book rides.
Intel is working on internet-of-
things software that flags health
concerns, and projects such as
enabling wearables to analyze and
communicate health data faster than
ever through 5G internet connections.
And Nest has begun modifying its line
of smart home products to help older
adults continue to live independently.
These are just a few examples of
the longevity market’s prospects and
possibilities.
 HBR.ORG THE BIG IDEA 10
Finally, as longevity strategies
are developed and implemented,
companies must consider not only
how their products and services
are designed but also how they are
promoted. The power of media and
advertising should be used to reflect
realistic images of older adults instead
of stereotypes. Older consumers do
not want to be patronized, but they
do want their needs acknowledged,
and companies can do this while
emphasizing both positive and
real aspects of aging. While many
companies have a long way to go, some
are getting it right. On the positive side,
Unilever’s Dove successfully employed
its Pro-Age campaign, realizing
significant market share increases. The
smart marketing for Dannon’s Activia
yogurt is focused on the common issue
of digestive health. And in 2017 Allure
Magazine showed leadership when it
announced that it would no longer use
the term “anti-aging” to describe skin
care or makeup.
We’re still in the early stages of
understanding what older consumers’
needs are and how to address them.
The aging population is diverse, and
the answers are not simple; one size
certainly does not fit all. But we do
know that there’s already a clear
demand for products and services that
can help people live longer, more-
comfortable, and more-meaningful
lives — and that are promoted without
stigma or stereotype. This demand will
grow rapidly in the coming decades,
and companies that start meeting it
now can reap a sizable dividend. It’s a
huge opportunity, one that will have
benefits both to their bottom lines and
to society. 
About the author: Paul Irving is chairman
of the Milken Institute Center for the Future of
Aging, the chairman of the board of Encore.
org, and a distinguished scholar in residence
at the University of Southern California, Davis
School of Gerontology.

ARTICLE
RETHINKING RETRAINING
To keep older workers engaged and productive, companies need
new approaches to skills development.
by Willy C. Shih, Howard Rudnick, and Colleen Tapen
“When I graduated, I was 56. I was
surprised that there were people who
were not worried about my age and
who believed I was still a valuable
member of the workforce. You start to
worry when you get close to retirement
whether anybody wants to hire
you…I was made to feel valued there
regardless of what my age was or
where I came from. It gave me back my
I
self-confidence after losing my job.”
—Darlene Mickelson
n 2008, after 34 years of working
at Philips Advance Transformer,
Darlene Mickelson was laid off.
The factory, tucked away in
the small town of Boscobel, in
southwest Wisconsin, had produced
lighting components for Philips
Electronics for many years. When
it shut its doors and outsourced
production to Mexico, Darlene, who
THE AGING WORKFORCE
worked as a tool crib attendant, was
one of 188 people who lost their jobs.
Around the same time, Darlene’s
30-year-old daughter, Jessie, also lost
her job, at the S&S Cycle factory in
nearby Viola. With the labor market
deteriorating, they enrolled together
in an accounting degree program at
Southwest Wisconsin Technical College,
in nearby Fennimore.
“It was really, really hard to do,”
Darlene recounted. “I had had a few
college courses over the years, but it was
hard to go from on the job every day,
earning a living, to going back to school.”
But Southwest Tech convinced her of the
possibilities, and she graduated in 2011
and took a job two days later. Today,
Darlene works at the Grant County
Economic Development Corporation,
GETTY IMAGES
where she uses her new skills to manage
the organization’s payroll and tax
reporting, among other tasks.
 HBR.ORG THE BIG IDEA 11
Listen: Author Willy Shih joins
Harvard Business School professors
Bill Kerr and Joe Fuller on the
Managing the Future of Work podcast
to talk about the plight of older
workers coping with the changing
nature of jobs.
The conventional wisdom on
retraining older workers is they are
too old or set in their ways to learn
new things and update their skills. We
don’t agree. We think this is a narrow
view that overlooks the significant
value these people can bring to the
economy. As a recent report from the
White House Council of Economic
Advisers suggests, investment in skill
development in the United States is
largely “front-loaded” during the first
25 years of life, after which public
contributions to formal education are
substantially smaller. Yet we live in a
time when both demographics and the
very nature of work are undergoing a
dramatic shift. Rapid technological
change, automation, globalization, and
offshoring all serve to shrink industries
and spawn new ones at what feels like
an ever-quickening pace. The booming
job market and the evolving nature of

work are altering the skills American
employers need in their employees, and
we believe that reskilling should play a
vital role in meeting these needs. We
should not ignore the tremendous value
that older workers can bring. And with
life-spans increasing across the globe,
many people need or want to continue
to work to help fund their eventual
retirement or just to stay active.
Unfortunately, we tend to conflate
proposals for retraining older workers
with the ways in which we prepare
young high school graduates for
direct entry into the workforce.
Apprenticeships or technical high
school programs in fields like
computers and software or specialized
skills like aviation may be a natural
path for non-college-bound students,
but older workers who have been in
the workforce for many years may need
a different approach. They have been
out of school for a long time and tend
to have more daily life commitments
to work around. For these reasons and
others, stuffing them into programs
designed for younger workers
sometimes just doesn’t make sense.
However, there are local or regional
programs in different areas of the
United States that have a proven track
record in retraining older workers.
In order to identify the common
denominators that contribute to their
success, we conducted structured
interviews across seven states, some
by phone and some in person, during
late 2017 and the first half of 2018. We
talked to people in community and
technical colleges, large and small
businesses, nonprofits that specialize
in retraining, and regional economic
development agencies. While many
of these organizations serve all age
groups, most focus on recent high
school graduates. Therefore, we
identified older workers who had
successfully gone through retraining
and categorized common features of
THE AGING WORKFORCE
their programs. While there were many
parallels to programs that served young
people, we identified features that
stood out as particularly important
to people over 50. For comparison,
we also talked to businesses and
individuals in Germany and Denmark,
and to Dansk Metal, the Danish trade
union. Here is what we found.
SHORTER WORK-BASED PROGRAMS
Older workers who are suddenly
displaced often have little interest
in extended programs. The people
we talked to often had family
responsibilities and were focused on
quickly replacing their lost income
streams. Dennis Rohrer, co-owner
of American Metal Works LLC, an
advanced machining facility located in
Paintsville, Kentucky, that serves the
aerospace, automotive, medical device,
and defense sectors and works with
Big Sandy Community and Technical
College to provide hands-on training
for students, said that in his experience
older workers “are willing to take a
16-week course” — but that’s about
it. Older students also vastly prefer
learning in a work setting rather than in
a classroom.
On-the-job programs can take
different forms (for example, spending
time at a partner employer’s workplace
for a few days every week, or every
day for several weeks) and provide
a multitude of benefits. Hands-on
training both boosts student
engagement and provides immediate
feedback to the school on needed
skills. It helps students cement their
understanding of what they learn in
class. Crucially, students — many of
whom are struggling financially — get
paid. Finally, work-based learning
can offer an on-ramp to a job at the
host company, often translating into
employment upon program completion.
Scott Bowen worked in the Kentucky
coal mining industry for 15 years
 HBR.ORG THE BIG IDEA 12
before he was laid off in February
2016. Initially, he said, he was worried:
“When you go through training, am
I going to find a job? Can I do this?
Can I learn it? Can I go into this new
environment after being around coal for
all them years?” But a 12-week course
introduced him to computer numerical
control (CNC) machining concepts for
mills and lathes, as well as G-code, a
programming language for CNC tools.
He also learned how to use SolidWorks,
a popular tool for computer-aided
design and engineering, and was able
to practice what he learned daily at
American Metal Works, which gradually
built his confidence that he could
successfully make such a dramatic
change. “You get to learn every day and
learn this new trade,” he recounted.
“You just keep growing and growing.”
The company hired him during his
training.
STACKABLE CREDENTIALS
The most successful retraining
programs, as measured by completion
rates, incorporate “stackable”
credentials. These are short-term,
industry-recognized credentials offered
by certificate or nondegree programs
that allow workers to balance the
demands of the training program
with work or family responsibilities.
This learning strategy focuses on
building core capabilities and then
layering on additional skills in steps.
This can take the form of a series of
short programs, each focused on a
particular skill set, that can be taken
sporadically over months or years. The
beginning of the sequence is focused
on an industry-recognized credential so
students can find work quickly. Once
they start working, they can return to
school to pursue training at the next
level. “I often compare what we do in
community and technical colleges to a
freeway,” explained Marshall “Sonny”
White, the former president of Midlands

Technical College, in Columbia, South
Carolina. “You get on at a particular
point, you’re on that freeway for a
while, then you’re off, and then you’re
back on again — because it’s all about
lifelong learning.”
This is consistent with a “just in time”
approach to training, available when
an individual needs it throughout his
or her career, not just at the beginning.
“We understand that the community
and technical colleges are not like the
normal four-year institutions, where
most of the students will come in at age
18 or 19 and stay four, five, or six years,”
White said. “Our students are much
older, and adult learners are coming
at various stages in their careers for
various purposes.”
Several states have mandated
stackable credential programs. In
response to a 2007 law, Ohio’s board of
regents and department of education
have developed a system of pre-
college and college-level stackable
certificates. Virginia’s New Economy
Workforce Credential Grant Fund and
Program, created in 2016, requires
participating institutions to offer a
“non-credit workforce credential.”
Similarly, the Kentucky Community
and Technical College System broke
down technical degree programs into
modules that allow students to take
steps toward certificates and degrees.
For example, a program in industrial
electronics offered by the Alabama
Community College System is spread
over five semesters. The first semester
covers fundamentals (such as DC and
AC electrical basics, schematics, and
math); subsequent semesters build on
this knowledge with courses on motor
controls, advanced industrial controls,
and industrial robotics. In addition to
the technical courses, there are ones on
public speaking, English composition,
workplace essentials, and a social
and behavioral science elective. Each
semester by itself qualifies the student
THE AGING WORKFORCE
for a certificate, and upon completing all
five, the student receives an associate’s
degree in industrial electronics.
WRAPAROUND SUPPORT
Several of the people we spoke with
used the term “wraparound services.”
They had borrowed it from the
health care industry, where service
providers work together to identify
and provide patients with the formal
and informal support that help make
a treatment program more successful.
Many students face multiple personal
financial challenges. Some are unable
to pay their tuition and transportation
expenses; some need money for food,
rent, and other basic living costs. We
saw retraining programs address these
challenges with food banks, emergency
funds, counseling, and staffers at the
schools. Former Midlands president
Sonny White recalled a 50-year-old
single mother who was trying to
go back to school but was short of
financial resources and had a host of
transportation issues. “I remember
taking her back and forth myself to her
home a number of times because she
had to walk over a mile to get to a bus
that only ran infrequently to bring her
to the college,” he said.
The financial difficulties faced by
students are episodic and small, rather
than chronic. Many students work to
make ends meet while they attend
school; some hold down two or three
jobs. “For these students, it’s not a
matter of $60,000 a year; it’s a matter
of a few hundred dollars sometimes
that makes all the difference in the
world,” White said.
The staff at Midlands said that
financial challenges were the biggest
cause of students dropping out. Pell
Grants, the largest source of federal
student aid, have historically only been
available for traditional bachelor’s and
associate’s degrees. The Aim Higher
Act, a bipartisan bill introduced in the
 HBR.ORG THE BIG IDEA 13
House of Representatives this past
July, would allow the use of Pell Grants
in certificate and other alternative
credentialing programs. “In my
estimation, that is great for the adult
learner and for businesses,” White said.
An increasing number of schools also
have emergency funds available for
students. Jason Wood, the president of
Southwest Technical College, described
his school’s comprehensive approach.
“We have emergency funds students can
access when they’re out of gas for their
car or they couldn’t make their electric
payment on their house or whatever type
of emergency might come up,” he said.
“The process to receive funds is simple,
without a lot of red tape. We do the best
we can to help the students get through
their emergency and back in class. We’ve
found the students who receive the help
tend to be more successful, and their
affinity for the college grows. We haven’t
seen the abuses associated with a
recurring reliance on emergency funds.”
Remarkably, at Southwest Wisconsin
Tech these funds partially come from
the generosity of the college’s own
employees: More than 90% of them
donated to the foundation last year. The
way the funds were allocated differed:
Southwest issues emergency grants,
while Midlands makes interest-free
“loans” whose repayment is optional.
Midlands plows any repayments back
into its emergency fund. White said
that recipients of loans consistently try
to “return the funds and help someone
else.”
Southwest Tech also provides clothing
so students have appropriate attire
for job interviews; a full-time, licensed
mental health counselor dedicated to
helping students; and an on-campus
food bank for students. “We believe you
can’t learn well if you can’t eat,” Wood
said.
If more community colleges in the
United States had wraparound services,
the lackluster graduation rate for all

of their students, not just for older
learners (roughly 40% within six years,
according to the National Student
Clearinghouse), undoubtedly would be
higher. “You can only stand tall if you
have a little bit of support,” Darlene
Mickelson commented as she reflected
on her retraining experience.
MATCH SUPPLY WITH DEMAND
Some schools add a “supply limiter”
feature to match the supply of graduates
with the actual demand by employers,
which prevents saturating the market
with qualified applicants and leaving
some students without jobs. Obviously,
this requires very good knowledge of the
current needs of local employers.
Jason Wood explained how
Southwest Tech finds ways to limit
enrollment. “We have an electrical
power distribution program, which
has had over a hundred people on the
waiting list,” he said. “We only accept
20 to 24 students every year, because
industry is telling us that if we flood
the market, there’s going to be people
they are unable to hire. We could admit
everyone and get the tuition and FTE
[full-time equivalent] revenue, but we
have that commitment with industry to
train only the numbers they need.”
To balance supply and demand,
Southwest Tech guides students to
programs that match their interests,
capabilities, and, where appropriate,
availability. For oversubscribed areas
like nursing, it uses part-time school
options to get students started while
the waitlist for the full-time program
comes down. Ultimately, these
matching efforts have contributed
greatly to Southwest Tech’s
extraordinary 97% job placement
rate in 2017.
CONVINCE CANDIDATES OF THEIR
POTENTIAL
Older students in retraining programs
often underestimate what they are
THE AGING WORKFORCE
capable of — a challenge that Rusty
Justice encountered. He established
Bit Source, a software development
start-up, with the primary goal of
retraining coal miners in his hometown
of Pikeville, Kentucky, in the heart of
Appalachia. He ran an ad to attract
miners displaced by the industry’s
contraction, and in less than two weeks,
950 applications had poured in. After
narrowing the pool to 60 applicants,
Rusty and his cofounder selected the
final 11. On the first day of work, one
of the new hires didn’t show up. When
Rusty called him, the man explained,
“I’m just a dumb old coal miner. I can’t
do this. I can’t be a computer coder.”
“If he can’t believe he can do it, he
certainly can’t do it,” Rusty said. “So the
first takeaway is you’ve got to convince
people to do it while you’re training
them to do it. So we started what we
call ‘reimagination training.’ And it was
just thinking about how we think about
ourselves.”
A hallmark of effective programs
is building trainees’ confidence,
which program leaders achieve by
a combination of high expectations
and individualized coaching. Many
participants told us about the
trepidation and self-doubt they felt
prior to and during the early stages of
retraining. Guy Burham, a graduate of
Per Scholas, a nonprofit that provides
free training in IT careers, said to
himself early on, “There is no way I can
possibly get this done.” But he found
that Per Scholas gave him a level of
confidence he didn’t know “existed
within himself.”
Beyond coaching students, some of
the best programs proactively recruit a
broad range of students and convince
them that they are candidates for
retraining. “You can’t just build facilities
and say, ‘We’ve got all the programs,’
and they’ll come,” Sonny White said.
“For a large part of the population,
that won’t happen. You’ve got to go
 HBR.ORG THE BIG IDEA 14
out physically and find them in the
community through the churches,
through other community organizations,
bring them together, explain it to them,
put your arms around them.”
FEDERAL PROGRAMS CAN PROVIDE
INGREDIENTS, BUT THE DESIGN MUST
BE LOCAL
The United States has tried to address
the needs of retraining with a series
of legislative acts that go back
decades, including the Comprehensive
Employment and Training Act of 1973,
the Job Training Partnership Act of
1982, and the Workforce Investment
Act (WIA) of 1998. The WIA established
state and local workforce investment
systems and provided a range of
grants and programs. In 2014 it was
replaced by the Workforce Innovation
and Opportunity Act (WIOA), which
was an attempt at reform and
required states to align programs
to fit the needs of employers. It was
also meant to be evidence based
and data driven, requiring common
performance indicators with negotiated
performance targets. It targeted the
needs of the unemployed and gave
local governments a fair amount of
flexibility with regard to fund allocation.
Unfortunately, the broad range of
core and additional support services
currently doesn’t help all displaced
workers make it through retraining
programs. While almost everyone we
spoke with took advantage of some
aspect of WIOA, it didn’t seem to be
enough. So what’s missing?
Talking with congressional staff in
Washington led us closer to an answer.
We asked people on Capitol Hill
whether retraining displaced workers
is a public good and should receive
public funding, or a private good that
should be the responsibility of either
employers or employees. While there
seems to be general agreement across
both sides of the aisle that there is
 THE AGING WORKFORCE

a mismatch between the skill set of
our current workforce and the skills
employers need, there is no consensus
on how to fix the problem and who
should be held accountable.
“Whose responsibility is it?” asked
Karishma Merchant, a senior education
policy advisor to Senator Tim Kaine,
Democrat of Virginia. “Should the
federal government be giving tax credits
for apprenticeship programs? Or should
it be the responsibility of the employer,
who needs those folks? I think my
boss has come in saying, ‘It needs to
be a partnership between both.’ Why
don’t we have community colleges and
employers working together to set a
curriculum up?”
The key to designing effective
programs is to understand local needs
and connect them to federal and other
support. While federal programs can
provide the ingredients, a local leader
on the ground needs to match the
resources to the needs of employers
and retrainee candidates in their area.
GRASSROOTS LEADERSHIP
We found that successful programs —
whether they are in rural Wisconsin
or Appalachia, Mississippi or South
Carolina — are run by community
leaders who work from the bottom
up. These people possess a deep civic
spirit and take personal initiative to
create new opportunities to find, and
then help, displaced workers. They
know how to draw from WIOA funds
or tap local resources. But even more
important, they assemble a complete
program and tailor it to the specific
needs of people in their communities.
This is often a difficult and unrewarding
job. The people we met admitted to
feeling frustrated — even to the point
of wondering, some days, why they
continue to do the job. But they are
motivated by the desperate need they
see among their neighbors, and they
work together across political lines to
build what they see as a vital future for
their communities.
Also vital to the success of the
retraining programs we observed were
the people who chased after the newly
displaced, trying to give them hope
and put them on the path to develop
new skills. Southwest Tech has a
rapid response team, led by a career
services manager, a success coach,
and a worker who has experienced a
layoff, pursued education, and found
new employment — someone like
Darlene Mickelson. They sometimes
bring along someone from their
financial aid team who can reach out
to other community organizations.
When notified of a business
closure, they go in quickly to make
presentations that offer some direction
and hope to individuals being laid
off. “There has to be an opportunity
for people. They have to know there’s
hope,” Darlene told us. “This person
made it,” she said, pointing to herself.
“We had to help them to believe, ‘I can
too!’”
The world of work is changing rapidly,
and careers will increasingly face
disruptions brought on by technological
change and globalization. As an
executive at Eastman Kodak, one of
us (Willy) watched this happen in
Rochester, New York, with the collapse
of the photographic film industry. It
happened in Utica, New York, with the
departure of GE; in Pittsburgh with the
decline of the steel industry; in the
Carolinas with the demise of furniture
and textiles manufacturing. We also
have seen it happen in the coal mining,
telecommunications, automotive, and
other industries that have sent millions
of jobs offshore. Highly trained people
with specialized skills have been thrown
out of work too.
And it’s not over. The emergence
of new automation and artificial
intelligence technologies promises
wrenching changes that will become
more frequent and will touch a wider
range of professions. Whole industries
will change dramatically or even
disappear over very short periods
of time — and it won’t be limited to
manufacturing. We should expect
shocks in the service industries as well.
As a nation we are going to require a
more flexible workforce — one that can
continuously learn and adapt in the face
of change. Effective retraining programs
are crucial to filling this need. 
Editor’s note: This article was researched and
written while Howard Rudnick and Colleen
Tapen were students at Harvard Business
School. The opinions expressed do not reflect
the views of their current employers.
About the authors: Willy C. Shih is the
Robert & Jane Cizik Professor of Management
Practice in Business Administration at the
Harvard Business School. Before joining HBS in
2007, he held a number of senior management
positions in the tech industry. Howard
Rudnick is a consultant at Bain and Company.
He previously served as the assistant director
of research at the Tobin Project, a nonprofit
dedicated to fostering innovative research on
issues of pressing public importance. Colleen
Tapen, who specializes in delivering insights
through data science, has worked in a number
of areas, including consulting, government,
and start-ups.

 HBR.ORG THE BIG IDEA 15


ARTICLE
CARING FOR YOUR COMPANY’S CAREGIVERS
Employees will increasingly be thrust into this role. Start planning now.
by Sarita Gupta and Ai-jen Poo
A
few years ago, Joy
Johnston flew across
the country to help care
for her father, who had
Alzheimer’s. After she
quickly used up the significant amount
of paid time off she had accrued
at her job, she applied for federal
Family and Medical Leave Act (FMLA)
benefits, but this proved difficult — her
father regularly moved facilities, and
the FMLA approval process requires
a complicated array of hospital
verification documents.
After her father died, Joy switched
jobs. Six months later, her mother was
diagnosed with colon cancer. Joy had
accrued no paid time off and was not
yet eligible to apply for FMLA benefits,
and her employer refused to let her
work remotely when her mother had
surgery. Put in this difficult situation,
Joy quit. She was able to scrape
together a handful of remote jobs, but
only earned a quarter of what she had
been making before. She also lacked
THE AGING WORKFORCE
employer-sponsored health insurance
and couldn’t afford to contribute to a
retirement account.
Messy and difficult sagas like Joy’s
will only become more common, as
10,000 U.S. Baby Boomers turn 65 each
day. By 2050, the U.S. population of
older adults will have nearly doubled,
to 83.7 million people. Pew estimates
that nearly 40% of adults in the United
States are unpaid caregivers, and
the AARP notes that six in 10 family
caregivers are also in the labor force.
Thriving into our eighties, nineties,
and even hundreds will be impossible
without help — especially as 90% of
people 65 and older plan to continue to
live in their own homes. Cuts in funding
for social welfare programs, the soaring
costs of health care, and our dwindling
retirement savings make paying for
home care untenable for anyone except
the extremely wealthy.
GETTY IMAGES
As a result, caregiving usually falls
on family members, many of whom are
faced with having to give up careers
 HBR.ORG THE BIG IDEA 16
and income to help an ailing parent.
This problem disproportionately
affects women, who overwhelmingly
outnumber men in caregiving roles,
according to MetLife. They also tend to
take on more difficult care tasks than
men, such as bathing, toileting, and
dressing, while men are more likely
to assist with less burdensome tasks,
such as finances and arrangement of
care.
Almost all of this work is unpaid —
and the financial penalties associated
with it are striking. A female family
caregiver who leaves the workforce to
care for a parent loses an average of
$324,044 in wages, Social Security, and
private pensions over her lifetime. (This
is, of course, on top of the lost income
that already results from the gender
wage gap.) What’s more, caregiving also
interrupts careers: in a study of prime-
age workers not in the workforce, 36%
of unemployed women had left work as
a result of caregiving, compared to only
3% of men.
This situation will surely continue;
along with parenting, balancing work
and caring for older family members
will become a central struggle for
Americans over the next several
decades. Many of these people are your
employees, or will be. Along with home
care workers, they’re part of an invisible
and struggling economy. In order to

The Changing Nature
of the “Dependent-
Age” Population
Today, only two in 10 people
from the “dependent-age”
cohort are 65 and older. By
the turn of the century, more
than half will be 65 and older.
Source: United Nations,
“World Population Prospects:
The 2015 Revision”
truly address the needs of an older
America, we need to change the way
we approach caregiving itself — and
businesses have a crucial role to play.
WHAT COMPANIES ARE — AND AREN’T —
DOING
Until now, the burdens of this new
world have fallen on workers, not their
employers. Fully 68% of working family
caregivers report making adjustments
at work such as arriving late or
leaving early, taking time off, changing
jobs, turning down a promotion, or
cutting back on hours. Workers in the
“sandwich generation” — so called
because they have to care for both
children and parents — are likely
to be hit the hardest; according to
Gallup workforce data reported in Fast
Company, about one-third of American
managers are part of Generation X.
A full 11% of them care for an elderly
or disabled person, while 64% have
children living at home. Millennials are
now being affected as well, making
THE AGING WORKFORCE
Percentage of “dependent-age” population
100%
65 and older
19 and younger
75
50
25
0
1950 2000
up about 25% of the nation’s family
caregivers; like members of Generation
X, many of their parents are aging Baby
Boomers. Older workers are affected,
too: 19% report retiring early, not
because they’re ready to leave the
workforce, but because they need
to care for a spouse or other family
member.
Companies are failing to meet
the needs of some of their most
experienced and talented workers
across the generations. What’s more,
they risk losing these workers to
companies that are on the cutting
edge of responding and adapting to
caregiving responsibilities brought on
by an aging nation.
One company that is often cited as
progressive in this area is L.L. Bean.
Headquartered in Freeport, Maine, L.L.
Bean’s employees range in age from
16 to 91, with an average age of 49.
“Our approach is to be an employer
with ‘ageless appeal,’” wrote the
firm’s director of human resources,
 HBR.ORG THE BIG IDEA 17
Projected
’15 ’50 2100
Wendy Estabrook, in a 2015 article
in Maine Policy Review. Flexibility
in the workplace at L.L. Bean takes
many different forms. In addition to
its full-time employees, L.L. Bean has
employees at three part-time levels (on
call, seasonal, and active retiree), and
offers the option of working remotely.
When it comes to leave, the company
augments FMLA with its own leave
policy that allows employees to take
up to six months in a 12-month period
away from work, unpaid, to care for
themselves or a loved one. On top of
this, the company offers counseling
on the myriad issues that arise around
care, whether related to locating
resources, dealing with financial or
legal issues, or coping with grief.
“We have actually found that typically
what is good for the 25-year-old is also
good for the 55-year-old employee
although that may be for different
reasons,” Estabrook wrote. In other
words, the policies that can help a
45-year-old employee work remotely

while caring for her aging mother or
allow a 30-year-old dad to take leave to
spend time with his new baby will also
help a 65-year-old who wants to stay in
the workforce. Across the age and work
spectrums, flexibility makes a world of
difference.
But flexible workplaces don’t just
emerge organically; they require
years of development and a serious
commitment to shifting workplace
culture. A culture that benefits both
the parents of children and the children
of parents has to be supported by
top executives in the workplace, and
must be incorporated into the hiring
process of every employee, notes Drew
Holzapfel, a partner at the High Lantern
Group consultancy and a member of
ReACT, a coalition of companies that
advocates for caregivers.
Holzapfel points to Emory University,
which has established a culture of care
throughout the institution, facilitated
through its WorkLife Resource Center.
The process began in 2010, when a
campus-wide needs assessment found
that 15% of the respondents were
caring for an older, ill, or disabled
family member, and more than half
were concerned about balancing
the responsibilities of work and care
in the next one to three years. The
university convened an adult care
working group, including human
resources professionals, experts on
aging, social workers, and elder law
attorneys, to address the needs of
employees. The group came up with
a set of recommendations: expanding
the university’s family medical and
sick leave policies; developing and
promoting an employer-sponsored
adult care program; providing on-
call emergency backup home care;
increasing awareness of available
resources; promoting the cultural
inclusion of care issues through
counseling and workshops; and hiring a
dedicated work-life adviser to oversee
THE AGING WORKFORCE
the program and provide one-on-one
coaching and support for employees.
These policies were implemented
five years ago. “We have surveyed our
workforce twice in recent years and see
that flexibility is increasing all across
our campus. Over half of our workforce
reports working flexibly,” says Audrey
Adelson, a consultant at Emory’s
WorkLife Resource Center. “The shift to
flexible work has not been easy, and is
a cultural change that takes time and
effort, but it has been worth it.”
Providing a range of care support to
your employees may sound expensive,
but in the long term, it can improve
a company’s bottom line. A joint
report by AARP and ReACT found
that supportive caregiving policies
have a high return on investment. For
example, for every dollar invested in
flextime, a company can expect to
recoup between $1.70 and $4.34. For
every dollar invested in telework, the
return on investment ranges between
$2.46 and $4.45. Generous benefits like
these were consistently linked with a
10% lower inclination to change jobs,
while family-friendly policies increased
worker-reported productivity by up
to 2.4%.
Moreover, family-friendly policies also
help recruit new talent. In one survey
of college students, the availability of
flextime, elder care benefits, and paid
family leave were shown to influence
the job choices of up to 33% of job
seekers. Overall, flexible work hours
lead to 50% less absenteeism, 30%
increased employee retention, and
20% better recruitment. Research
also shows that companies with such
policies have some of the highest net
promoter scores — that is, they are
most likely to be recommended by their
employees as great places to work.
Larger companies are starting
to catch on: Starbucks recently
announced that it would offer heavily
subsidized backup care to both full-
 HBR.ORG THE BIG IDEA 18
time and part-time employees for 10
days per year. This would allow an
employee to take their child or older
loved one to a day care or adult day
center for $5 a day, or hire an in-home
care provider for $1 an hour, with the
company picking up the rest of the
cost. The benefit is supplemental to
the health care coverage the company
already provides.
Even Silicon Valley, with its still
relatively young workforce, has made
early advances in accommodating
caregiving needs. Many companies offer
generous paid leave for new parents —
something the FMLA benefits do not, of
course, provide. These examples show
that the most pioneering companies are
not waiting for new regulations or more
support from the government, but are
acting on their own. They are taking a
broader, much more flexible approach
to caregiving that reflects the needs of
an aging society.
STEPS YOUR ORGANIZATION CAN
TAKE NOW
Adapting your company’s caregiving
culture isn’t always easy. But here are
two places to start.
First, offer flexible benefits (rather
than simply maternity or child care
leave). This normalizes taking leave for
anyone. Care isn’t just something that
young women do for their children; a
middle-aged man or an older employee
may equally need to take time off.
Framing the benefit as care leave
and offering it as a paid benefit takes
away the stigma for women around
both maternity leave and elder care,
and reduces the stereotype that
women should be primary caregivers.
Companies may need to encourage
their male employees to take parental
leave — research has shown that when
a few men take leave, other men follow
suit. Humanyze, a people analytics
company, actually requires new fathers
to take parental leave.

Second, reduce the stigma attached
to care needs and responsibilities. We
have been culturally conditioned to
refrain from talking about care needs
or caregiving responsibilities when we
are at work, especially with our bosses.
Companies can begin to change this in
subtle and explicit ways.
One approach is to encourage
employees to self-identify as
caregivers — particularly those who
typically don’t reveal themselves to be
in caregiving roles, such as men, young
people, and senior managers. This
can start during the training process
for new employees. Human resources
departments can bring in experts to
talk about caregiving, encouraging
employees to feel more open in sharing
their experiences and how caregiving
impacts their work. Companies also can
offer access to therapy and counseling
as part of employees’ health benefits.
Just as corporate gyms, yoga studios,
and lactation rooms are becoming
part of the design of many corporate
campuses, companies should consider
designing workspaces using photos,
symbols, and artifacts that emphasize
our shared caregiving roles and need for
care. For example, managers can have
photos of older parents, children, or
pets on their desk as a way of affirming
these roles. Companies could also host
days on which employees can bring
grandparents, parents, or children to
work, or extend invitations to family
members for company events.
One of us (Sarita) took a full twelve
weeks of parental leave when she had
her daughter, Suraiya. She made a point
of disconnecting from work as a way
of encouraging other new parents to
do the same. Given her own caregiving
responsibilities, she frequently uses our
policies on telework, and she takes paid
sick days and leave when Suraiya or her
parents have medical needs. She has
also been mindful of creating a family-
friendly office culture, bringing her
THE AGING WORKFORCE
daughter to the office and her parents in no small part by company leaders. In
to major events. She has pictures of her valuing your employees’ commitment
family on her desk and acknowledges to the people they love the most, you’re
team members’ pictures when they showing that you value them, too. 
have them displayed, too.
About the authors: Sarita Gupta (@
All of these steps can help saritasgupta) is a codirector of Caring Across
normalize and affirm care needs and Generations, a national campaign working
responsibilities in the workplace. to transform our systems of care so that all
This is uncharted territory for most caregivers and families can live and age with
organizations, however, so these shifts dignity. She is also the executive director of
should be approached as a series of Jobs With Justice, and a nationally recognized
expert on home care and the economic, labor,
experiments or small steps before they and political issues affecting working people,
are codified as best practices. particularly women and low-wage workers. As
Of course, companies can’t solve our a member of the “sandwich generation,” Sarita
caregiving problem entirely. We also is grappling with the care issues facing more
need to better support home health and more Americans, balancing caring for
workers, who are invaluable when young children with caring for aging parents.
Ai-jen Poo (@aijenpoo) is a codirector of
people have long-term conditions like Caring Across Generations and the director
Alzheimer’s or dementia. Home care of the National Domestic Workers Alliance.
aides tend to be women of color, and, She has been organizing immigrant women
despite being in one of the fastest- workers in New York since 1996. She is the
growing professions in the U.S., they author of The Age of Dignity: Preparing for the
earn a median annual pay of around Elder Boom in a Changing America and a 2014
recipient of the MacArthur “Genius” Award.
$13,000. These workers also face
unpredictable hours and schedules,
which become burdensome when they
have their own children or parents to
care for as well. States like Washington
and New York are making some
headway in making care jobs into better
jobs, but there’s much more room for
progress.
We also need broader public-sector
solutions that acknowledge the evolving
state of the caregiving workforce and
provide working family caregivers with
supports that address their growing
and changing needs. That’s why our
campaign advocates for Universal
Family Care, a policy vision that would
create a family care insurance fund that
individuals could use to pay for child
care, elder care, or paid time off from
work to attend to caregiving needs, and
that employees could take with them
from job to job.
Ultimately, we need to recognize
that care work is vital to our society.
Businesses can and should play a huge
role in making this cultural shift, driven
 HBR.ORG THE BIG IDEA 19

ARTICLE
RETIREMENT-PROOF YOUR COMPANY
Don’t let older employees leave without passing down the skills, connections,
and institutional knowledge they’ve spent years accumulating.
by Peter Berg and Matt Piszczek
C
an you name the specific,
valuable skills your older
workers have? If you can’t,
you’re not alone — and
you’re potentially putting
your company at risk.
A substantial portion of the global
workforce is nearing retirement age. In
the United States, there were 65 million
people over the age of 60 in 2017. This
number is expected to grow to more
than 77 million by 2020. Germany,
the largest economy in Europe, has a
population that is not only aging but
also declining overall.
Studies suggest that these trends
will have significant implications for
workforce planning. Older workers may
exit organizations in large numbers,
for example. And when they exit may
get more difficult to predict: Increasing
numbers of older people are working
THE AGING WORKFORCE
longer, due to necessity, desire, or a
combination of both. We don’t know
much about how actual companies are
preparing (or not) for an older, and less
predictable, workforce. In particular,
there’s very little research on how
organizations are managing the transfer
of knowledge and skills when older
employees walk out the door.
Our research, funded by the Alfred
P. Sloan foundation, begins to address
this gap. It is aimed at understanding
how organizations are adjusting
their skill composition in response
to demographic changes and what
practices are working effectively.
We are currently writing up a study
consisting of interviews in eight
manufacturing facilities: four in the
GETTY IMAGES
U.S. and four in Germany. In total, we
talked to 43 site managers, human
resource managers, area supervisors,
 HBR.ORG THE BIG IDEA 20
and employee representatives. We also
conducted eight focus groups with
older workers.
Unsurprisingly, we learned that an
aging workforce increases firms’ risk
of skill loss as older employees retire.
This means companies must develop
both younger workers and those in
the middle of the age distribution,
and then monitor and adjust their
entire workforce based on the inflow
and outflow of skills. Few companies
are doing this, however, and only one
firm we studied had a formal plan to
monitor skills and adjust its workforce.
We also found that top management
and frontline supervisors view the
aging issue very differently from each
other. In both the U.S. and Germany,
managers were largely unconcerned
about the effects of mass retirements
on their workforces’ skill composition.
As one site manager of a U.S. chemical
facility explained, “I don’t worry
about knowledge transfer too much,
provided it’s a trickle, and not a
tsunami, of people leaving that’s been
predicted. Is there ever going to be a
tsunami?” A site leader at a German
electronic component facility, when
asked whether he was able to manage
retirement, responded, “Yes. At the

moment, yes. I think in the next five, 10
years it will not be a problem.”
Why is this the prevalent sentiment?
Top leaders are focused on the quantity
of labor from a strategic point of view.
Most of the site leaders we spoke
with explained that their workforces
have been shrinking for years due to
competitive pressures, and that they
are not having trouble finding entry-
level employees when needed, despite
increasing skill requirements for those
positions. Retirements, in their view,
are just another way of helping them
keep the right number of people in
the organization. Even employees are
keenly aware of this: One participant
in our U.S. electronics focus group
explained, “Although [my company] is
good at making product and making
money, one of the products they make
money at is loss of headcount.”
Frontline supervisors have a very
different perspective, however. In
our interviews, their concern about
retirements and workforce aging
was palpable, particularly about the
quality of skills at risk. While high-
level leaders were concerned mostly
with headcount, supervisors were
worried about losing particular high-
skill workers in strategically important
positions. Supervisors naturally deal
with a smaller subset of workers, so
when their unit includes one or more
retirement-eligible employees with a
rare or high-level skill set, they see a
greater risk.
At a U.S. electronic component
facility, one supervisor managed
two employees over age 70 at an
off-site facility. These employees
were the exclusive support for a
legacy product that the company
no longer manufactured but for
which maintenance support was still
strategically important. There was no
plan to replace the employees when
they retire — and all documentation
was in the employees’ native language
THE AGING WORKFORCE
of Russian. “I don’t know when these
guys are gonna leave, and if they left
tomorrow, I’m done,” the manager
told us. A supervisor at a German
electronic component facility expressed
similar concerns: “Knowledge goes,
and the way the company runs, it’s not
guaranteed that it will be replaced,
either here or anywhere else.”
Supervisors ultimately faced a two-
pronged problem. First, because of
hiring freezes and planned attrition
in previous decades, there were no
younger or midlevel employees ready
to step into the roles that would
be vacated by these highly skilled
older workers. Second, because top
management was concerned more with
headcount than with skill management,
there was little institutional support
for knowledge transfer and employee
development to fill skill gaps.
Frequently, key positions required
organization-specific knowledge and
skills that could not be found in the
external labor market and that were too
complex to be automated.
Adding to the difficulty is managers’
perceived inability to discuss
retirement plans due to concerns of age
discrimination. A supervisor in a U.S.
chemical facility explained it best: “It’s
almost taboo. We don’t discuss age.”
We observed this concern in both the
U.S. and Germany, at all organizational
levels.
These challenges will become more
common as workforces continue to age.
In fact, our findings suggest that skill
shortages are likely to be seen not in
the form of larger numbers of unfilled
positions, as has been suggested,
but in larger numbers of unqualified
individuals being moved into key
positions. Companies that cannot
find ways to fill the gaps will finally
experience the long-term consequences
of hiring freezes and running lean.
There are ways to get in front of these
issues, however. We observed a number
 HBR.ORG THE BIG IDEA 21
of formal and informal tactics being
used by organizations and frontline
managers to address skill gaps. Some
work better than others.
Delay and transfer. One common
practice involved delaying the loss
of skills as long as possible so that
they could be transferred to other
employees. For example, in both the
U.S. and Germany some companies
were able to move a few older workers
from rotating shifts to day-shift
positions, which helped them train
other employees and encouraged
them to retire later. Other companies
in Germany offered older employees
slightly reduced working hours. In the
U.S. we saw several cases in which
retired employees were brought back
as expensive contract workers because
they could not be replaced quickly
enough. A few facilities were in the
middle of documentation processes
to capture knowledge, as a part of
either formal organization initiatives or
informal, supervisor-driven ones.
All of these steps were effective
in some situations, but they had
significant limitations. Special positions
were always limited in number, if
available at all. Reduced hours do not
always match well with the organization
of work, and may be perceived as
discriminating against younger workers.
Contracting with retirees is expensive.
And formal documentation processes
were often met with resistance by
employees, who perceived it as
additional work.
German companies may have an
advantage when it comes to the delay-
and-transfer strategy, due to the way
labor is organized in the country. We
found that union representatives there
were active participants in shaping an
organization’s response to workforce
aging, whereas representatives in the
U.S. considered it a lower priority.
We also observed that many of the
negotiated, alternative retirement paths

in Germany benefited both employers
and employees. These included partial
retirement schemes, which allow
employees to work reduced hours
while maintaining nearly full-time pay,
and a “block model” form of partial
retirement, in which an employee works
full-time for two years and then not at
all for two years, receiving 80% pay
throughout. We also found that German
facilities tended to have a more-flexible
response to aging than U.S. facilities
did. Employees had access to reduced
schedules, more time off, and time
accounts in which they could bank extra
hours worked and put them toward
early retirement. These alternative
pathways make retirements easier to
predict, and can be mutually beneficial
to employers and employees.
Mixed-age teams. In the companies
we studied, creating informal mixed-
age teams was a particularly effective
way to help younger employees build
skills. These teams both allowed them
to learn directly from older workers
and made the older workers feel that
their knowledge and skills were valued
by the organization. Area supervisors
overwhelmingly reported positive
experiences with mixed-age teams.
The primary challenges were with
resource availability and job design.
Few supervisors could justify the teams’
personnel cost solely as a development
measure. In fact, we observed that
mixed-age teams were used only when
they were a natural consequence of
work organization or a part of informal
supervisor initiatives. Not all jobs
supported these kinds of arrangements.
So while mixed-age teams are likely
to have more long-term success than
delay-and-transfer strategies, they
were rarely introduced formally in our
sample.
Tracking changes over time. The
organizations that best managed
aging and skill composition were
those that explicitly tracked it. Though
THE AGING WORKFORCE
several facilities monitored the constrain organizations’ responses. As
certifications employees had earned the proportion of older workers grows,
or the training programs they had it will only become more important to
attended, only one facility — a U.S. understand how aging affects the flow
electronics manufacturer — had a of skills in and out of organizations
formal program for directly tracking and what practices are most effective,
age-driven skill composition. With under what circumstances, and why. 
this program, supervisors regularly
assessed how many people in their About the authors: Peter Berg is a professor
unit were capable of doing each job, and the associate director for academic
how important each role was to the programs at the School of Human Resources
and Labor Relations at Michigan State
organization’s success, and how likely University. His research interests include
it was that someone could take over a the implications of an aging workforce for
job if the employee currently in it left. public policy and management practice,
Positions were assigned a numerical work-life flexibility policies and practices, and
score that indicated how urgent it was international comparisons of working time.
that someone be trained for that role. Matthew Piszczek is an assistant professor
of management in the Mike Ilitch School of
Resources were then diverted to those Business at Wayne State University, with a
needs. focus in human resource management. His
This formal program was put into research examines the adoption and effects of
practice because the site leader at age-related and work-life policies.
this facility empowered frontline
supervisors to address the issue of skill
composition. “If we have a job that only
one person in the plant can do, that’s
a [high score],” he told us. “So then we
kind of force the issue: You have to have
a plan to get other people trained.”
Leaders should emulate this
approach, tracking any threats to
skill composition before they become
a problem. At the highest levels,
companies should be aware of who is
eligible for retirement, what knowledge
and skills they will be taking with
them when they leave, and how these
factors contribute to the flow of skills
entering the organization. For too
long, companies have implemented
hiring restrictions and constraints
on employee development without
considering the long-term implications
on skills. The large-scale use of these
practices must end.
Although we have learned some
valuable things about how companies
are responding to workforce aging,
many questions remain. Our next
task is to explore whether there are
other country-level differences that
 HBR.ORG THE BIG IDEA 22
 THE AGING WORKFORCE

DATA
JUST HOW OLD ARE WE GETTING?
The charts don’t lie.

T
by Ramsey Khabbaz and Matt Perry

he global population is
getting older. In the U.S.,
it’s happening fast. It’s
clear from the data that,
globally, workers across
industries and generations can feel this
demographic shift happening. And their
attitudes about aging and retirement
are shifting as a result.
When do people expect to retire?
When do they begin saving for
retirement? When is someone
considered “old”? Or, more importantly,
too old to work? What do people expect
from life after work? How do (or don’t)
employers help?
To get a closer look at the rapidly aging
American workforce and its effect on
people’s lives, we’ve curated data from
various sources. In the charts below,
we see both optimism and pessimism,
some uncertainty, and more than a
little disagreement from generation
to generation. These snapshots are
instructive and at times surprising.
Together they comprise a broad view of
an aging, changing U.S. labor force. 

The U.S. Labor Force Will Grow Mostly 74%

Because of Retirement-Age Workers of Baby
Boomers do
Projected average annual growth rate by age group, 2014 to 2024 not plan to
–2% –1 0 1 2 3 4 5 6 7 immediately
75 and older stop working
65–74
at retirement
55–64
45–54
age.
35–44
25–34
16–24

Source: U.S. Bureau of Labor Statistics

The 55-plus population is growing faster than any other

age cohort, but the top of the demographic—people 65 and
over—is the only group showing significant annual growth.

 HBR.ORG THE BIG IDEA 23

 THE AGING WORKFORCE

Age Is Not Distributed Median age one

Evenly Within Industries started saving for
retirement:
Median age of workers in the U.S. by industry, 2017 Millennials 24
Industry sector Median age Overall median Notable jobs
Gen X 30
25 years 40 55
Agriculture, forestry, Animal production
fishing, hunting Jobs within the sector and aquaculture

Mining, quarrying, Support activities

oil/gas extraction for mining

Manufacturing Motor vehicle

manufacturing

Wholesale trade, Shoe

retail trade stores

Transportation Bus service and

and utilities urban transit

Information Newspaper publishers

Financial activities Real estate

Professional and Accounting, taxes,

business services bookkeeping, payroll

Education/health Home health

services care services

Leisure and Restaurants and

hospitality other food services

Other Religious
services organizations

Public Executive offices and

administration legislative bodies

Source: U.S. Bureau of Labor Statistics

The median age of all workers in the U.S. is about 42 years

old. By this metric, we can identify some industries as
relatively old and others as relatively young. As the labor
force continues to age, understanding the demographics
of industries will be increasingly important—both for
companies that need to prepare and for workers looking
for opportunities.

 HBR.ORG THE BIG IDEA 24

 THE AGING WORKFORCE

Hopelessly Optimistic Millennials? 14%

of Gen X is “very
When do you expect Do you plan to work confident” they
to retire? in retirement?
will be able to
Before
65
At
65
After
65
Full- Part-
time time
Not
sure No
fully retire with
a comfortable
Millennials Millennials lifestyle.
Gen X Gen X

Baby Boomers Baby Boomers

Source: “18th Annual Transamerica Retirement
Survey of Workers,” Transamerica Institute, 2017

Across generations, nearly nine in 10 American workers

expect to retire at some point in their lives. However,
exactly when workers expect to retire depends on their
generation. Millennials are disproportionately optimistic
about the prospect of an early retirement, and more than
half believe they’ll retire by 65. But the economic and
demographic trends suggest that the opposite will likely
be true. Why the dissonance? Perhaps it’s simply because
retirement is too far away for Millennials to imagine it
clearly.

And what is retirement, anyway? One in five Millennials

expect to work full-time after they’ve retired. This calls
into question the very definition of the term. Is retirement
becoming a distinction between a time during which we
have to work and a time during which we choose to work?

 HBR.ORG THE BIG IDEA 25

 THE AGING WORKFORCE

Ageism Median amount

saved in all
At what age do you consider
someone to be “old”?
At what age do you consider
someone “too old to work”?
household
retirement
accounts:
60– 70– 80– 90– Not 60– 70– 80– 90– Not
<60 69 79 89 99 100+ sure* <60 69 79 89 99 100+ sure*

Millennials Millennials Gen X $72,000

Baby Boomers
Gen X Gen X $164,000
Baby Boomers Baby Boomers
*Also includes responses of “depends.”
Source: “18th Annual Transamerica Retirement
Survey of Workers,” Transamerica Institute, 2017

The word “old” is subjective. But for younger people, “old”

tends to be a number somewhere around 60—much lower
than what older generations consider “old.” This might seem
somewhat unsurprising, but it’s important to understand
given the threat of ageism in an aging workforce.
Fortunately, even Millennials adjust their definition of
“old” when asked about age in the context of work. And
a healthy number of people in all generations consider
the individual rather than making a sweeping judgment.

 HBR.ORG THE BIG IDEA 26

 THE AGING WORKFORCE

Finances 39%
of all workers
I could work until 65 and still What will happen to your expect work to
not have enough money saved
to meet my retirement needs.
standard of living when
you retire?
be part of their
Strongly or Strongly or Stay the
retirement income.
somewhat agree somewhat disagree Increase same Decrease

All workers Millennials

Compared to my parents’
generation, my generation
will have a much harder time Gen X
achieving financial security.

Strongly or Strongly or Baby Boomers

somewhat agree somewhat disagree

All workers
Source: “18th Annual Transamerica Retirement
Survey of Workers,” Transamerica Institute, 2017

Most workers agree that they won’t be able to save

enough money by the age of 65. This widespread feeling
of financial insecurity might explain Americans’ increasing
tendency to work later in life, and their anticipation of
having to work after retirement. Still, Millennials remain
relentlessly optimistic; a third expect their standard of
living to increase in retirement and a large majority expect
no decrease. Americans of every generation also assume
that preceding generations enjoyed a financial advantage.

 HBR.ORG THE BIG IDEA 27

 THE AGING WORKFORCE

Employers’ Treatment of Workers

Is your employer My current employer is supportive
age-friendly? of its employees working past 65.

Not Strongly or Strongly or

Yes sure No somewhat agree somewhat disagree

Which of the following, if any, does your employer provide

to help employees transitioning to retirement?

None of these
Not sure
Flexible schedule
Part-time hours
Financial counseling
Lower-stress positions
Succession planning/mentoring
Retirement seminars
Info about encore career opportunities

Source: “18th Annual Transamerica Retirement

Survey of Workers,” Transamerica Institute, 2017

More than half of all U.S. workers perceive their employers

as “aging-friendly” and supportive of working past the age
of 65. This is seemingly good news, given the larger
demographic data. But in reality, employees report that
their employers are doing little to help them prepare for
retirement. As the workforce continues to age at the
projected rates, will employers be prepared—and willing—
to adjust?

About the authors: Ramsey Khabbaz is the editorial coordinator at Harvard Business Review.
Matt Perry is the senior information designer at Harvard Business Review.

 HBR.ORG THE BIG IDEA 28


ARTICLE
WHAT HAPPENS TO YOUNGER WORKERS WHEN
OLDER WORKERS DON’T RETIRE
Expect intergenerational conflict.
by Nicola Bianchi, Jin Li, and Michael Powell
F
or years in the world of
symphony orchestras,
available positions for oboe
talent were scarce. Young
oboists waited for chairs at
top orchestras to open up, but many
principal oboists who had held their
positions for decades simply weren’t
retiring. It’s impossible to know
how many younger players gave up,
changed professions, or lingered in
the lower ranks bitterly for years. In
the early 2000s, however, many of the
senior oboists began to retire. Those
departures freed up spots at the top,
which freed up spots below that, and
so on. Advancement for oboists was
suddenly possible. One promising
young oboist described the moment as
a “gift from heaven.”
The oboists’ dilemma is a tidy model
for what’s beginning to happen more
broadly across entire economies, as
many workers decide to stay in the
THE AGING WORKFORCE
workforce past retirement age. These
“slot constraints” in organizations
hold back high-potential younger
workers as older ones stick around,
and create boom-and-bust cycles of
talent demand. The problem can create
intergenerational conflict, through what
we refer to in our research as “career
spillovers.”
Intertwined internal and external
forces cause spillovers within a firm.
Internally, spillovers occur when a
firm is limited in its ability to provide
advancement opportunities for its
employees — what we call “career
capacity” — so that one employee’s
advancement comes at the cost of her
coworkers’. This can mean that when
older workers delay their retirement,
younger workers’ career advancement
stalls. We have studied these issues
GETTY IMAGES
in the past, and our current research
continues to investigate the quantitative
impacts of delayed retirement.
 HBR.ORG THE BIG IDEA 29
At the same time, external forces —
industry conditions and macroeconomic
trends — shape a firm’s career capacity.
When orders aren’t coming in, the
business can’t grow; if the business
isn’t growing, it can’t create career
advancement opportunities. This
creates a vicious cycle. Since younger
firms tend to grow more quickly than
mature firms, the spillover effect is
felt most deeply in mature firms. The
slower-growing firms then lose talent
to faster-growing ones where career
capacity is less diminished, thus making
it even harder for mature firms to
compete for new growth.
The changes in public policy and
the inexorable demographic data
compound the challenge of limited
career capacity. At the macroeconomic
level, most high-income countries have
seen an increase in the median age of
their populations, which translates to
more older workers. Older employees
often occupy higher-level positions in
their organizations and tend to have
lower turnover rates during their last
few years in the workplace. Retirement
is taking place later and later, both out
of choice and because most countries
have increased their retirement age due
to budgetary pressures.
When we think about a firm’s strategic
decisions regarding growth and

direction, we typically focus on external
factors like business opportunities,
rather than considering how an internal
force like a firm’s career capacity
can affect its fortunes. An increasing
volume of evidence, however, shows
that neglecting career advancement, or
being unable to provide it, can lead to
employee attrition, especially among
high-potential workers. In his 2008
book Talent on Demand, Wharton
professor Peter Cappelli emphasized
that “[f]rustration with advancement
opportunities is one of the most
important factors pushing individuals to
leave for jobs elsewhere.”
This frustration can lead to
intergenerational conflict. Indeed,
a KPMG survey carried out in 2013
found that “46 percent of people
agreed with the proposition that older
members of staff should retire so that
younger workers could have a genuine
chance of promotion.” This situation is
unfortunate for everyone involved and
has only gotten worse over the last few
years.
The wicked problem is this: Firms
need to expand career capacity in the
face of demographics that suggest older
workers aren’t going anywhere even as
younger workers want them to move
on. While there are no silver-bullet
solutions, our research points to some
approaches that may be effective.
Encourage turnover at the top.
If firms limit the amount of time
higher-ranked employees can stay
in their positions, advancement is
engineered into the firm. An orchestra,
for example, might limit the tenure
of first oboists to no more than 15
years. Mandatory-retirement policies
encourage turnover, as well; in recent
years, we’ve seen increases in forced
partner buyouts in law, consulting, and
accounting firms as a way to expand
career capacity. Other forced-turnover
policies such as stack ranking can
serve a similar role.
THE AGING WORKFORCE
The obvious drawback to these
strategies is that they may involve
forcing out valuable talent. They have
other pitfalls as well. For example,
decreased job security through
mandatory term limits may make jobs
less desirable in the first place; while
younger workers want older workers to
get out of their way, they likely won’t
want those same policies applied to
their own situation. Stack ranking
can undermine incentives employees
have to help each other, which is why
many prominent firms such as General
Electric and Microsoft have stopped
using it. And for many years, the uneven
application of mandatory-retirement
policies gave firms cover to discriminate
against older workers, which led several
countries to abolish them altogether.
While involuntary departures can
be hard on employees, they can be
made less painful if firms find ways
to facilitate post-departure careers.
If the company can find attractive
opportunities elsewhere for workers
when they leave — a practice that is
common in top management consulting
firms such as McKinsey & Company, for
example — they can ensure that high-
level jobs remain attractive even if they
are less secure.
Expand the hierarchy. Instead of
forcing people out of chairs, add more
oboists. Expanding career capacity —
putting more positions at the top —
creates advancement opportunities
without losing what’s already there.
This may, however, create top-
heavy organizations with a new set of
problems. A prominent example of this
is the “brass creep” phenomenon in
the U.S. military, in which the relative
number of high-ranking officers spiked
at the end of the Cold War. As one
article on the phenomenon noted, “In
World War II, there were 30 Navy ships
for every admiral. Now, the Navy has
more admirals than ships.” In addition
to being expensive, having too many
 HBR.ORG THE BIG IDEA 30
cooks in the kitchen can lead to slower
and worse decisions: When everyone is
in charge, no one is in charge.
One approach to creating more
positions at the top without creating
chaos is to set up a job rotation policy
whereby workers can take turns being
in the leadership position. While this
approach may seem unorthodox, it has
been pursued by the successful Chinese
telecom giant Huawei, where “three
deputy chairmen act as the rotating and
acting CEO for a tenure of six months.”
Plan for growth. Ideally, firms and
industries can create career capacity
through growth. Form more orchestras!
Peter Drucker’s famous case study on
Callahan Associates in 1977 described
a firm that engineered growth by
becoming a chain of chains. It started
out as a supermarket chain, then
developed a chain of garden centers,
then home-service centers, and then
greeting card stores. It did so because
the CEO, Bill Callahan, “deeply believed
that the company had to expand to give
people promotion opportunities,” and
“this meant going purposefully into new
businesses every six or seven years.”
While this strategy expands career
opportunities, it may also mean
pursuing unusual or risky opportunities,
and it can appear unprofitable
to outsiders and investors. If left
unchecked or pursued in a reactive
manner, it can become a cancer on
the organization. Engaging in this type
of growth requires thinking carefully
about the long-term costs of hiring
someone and providing them with a
fulfilling and motivating career. This
approach may mean forgoing profitable
short-run opportunities — a mindset
that may have been more palatable
when Drucker was writing in the
1970s than it is today. Still, companies
pursue growth, and it will be part
of any strategy aimed at increasing
opportunities. The career capacity
challenge could be one way to jolt an
 THE AGING WORKFORCE

old firm into the kind of new thinking it

needs in order to grow.

...

Running a successful organization

requires striking the right balance
between taking advantage of external
opportunities and managing career
opportunities. Our research has
shown that in many situations the best
way to motivate workers is through
career-based incentives. When career
opportunities are mismanaged, the
performance of the firm suffers both
in the short run, because of career
spillovers and intergenerational
conflicts, and in the long run, because
such conflicts may make it difficult
for the firm to attract new talent. As
we’ve shown here, there are ways for
firms to expand their career capacity
and reduce these conflicts, although
all of these approaches have costs as
well. Firms should compare the costs
and benefits and not rely on any single
approach. An integrative and thoughtful
strategy that combines all of these
solutions can be the most effective. 
About the authors: Nicola Bianchi is an
assistant professor of strategy at the Kellogg
School of Management at Northwestern
University. Jin Li is a professor of
management and strategy and economics
at the University of Hong Kong. Michael
Powell is an associate professor of strategy
at the Kellogg School of Management at
Northwestern University.

 HBR.ORG THE BIG IDEA 31

NEXT IN THE BIG IDEA:
JANUARY 2019
Time or Money?
We work fewer hours than we used to, but we’ve
never felt more pressed for time. Why? A growing
body of research shows that we base our decisions
on money — a bad metric for managing time.
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Jobs and rewards are structured to reinforce the
time stress we all live with. The result: $12 billion
in lost productivity plus health care and other
costs. Ashley Whillans lays out the many ways that
workers — and their companies — can take back
their time, by making decisions that may seem
counterintuitive but will ultimately result in greater
happiness and productivity.