America Is Getting Older. How Will an Aging Population Impact Employers?
Federal data shows that the median age in the U.S. is rising and population growth is slowing—both of which could have business implications. The national median age jumped by 0.2 years to 38.9 years from 2021 and 2022, according the U.S. Census Bureau. Seventeen states had a median age above 40 in 2022, led by Maine […]
Federal data shows that the median age in the U.S. is rising and population growth is slowing—both of which could have business implications.
The national median age jumped by 0.2 years to 38.9 years from 2021 and 2022, according the U.S. Census Bureau. Seventeen states had a median age above 40 in 2022, led by Maine (44.8) and New Hampshire (43.3). Utah (31.9) and Texas (35.5) had the lowest median age in the nation.
No states experienced a decline in median age.
"Without a rapidly growing young population, the U.S. median age will likely continue its slow but steady rise," Kristie Wilder, a demographer in the Census Bureau's Population Division, said in a statement.
Economists predict that an older workforce could lead to higher labor costs, including salaries, health insurance, paid time off and other contributions. In 2021, U.S. Secretary of Commerce Gina Raimondo predicted that the aging population will soon hit the economy like "a ton of bricks."
Without the right fiscal measures in place, women will have to drop out of the workforce to care for aging parents, damaging the economy, she said.
"We can't afford for half of our workforce—women—to be held back and held out of the workforce because they can't get excellent and adequate childcare or eldercare," Raimondo told Reuters.
Francine Gordon, lecturer in management and entrepreneurship at the Leavey School of Business at Santa Clara University, said businesses could face further talent shortages in the years ahead. Attracting older workers "will be beneficial for many industries" as the population continues to age, she said.
As working-age population growth slows, Michael Madowitz, director of macroeconomic policy at the Washington Center for Equitable Growth in Washington, D.C., told SHRM Online in June that "there is no demographic wave coming to save employers."
At the same time, many older individuals are waiting to retire. Leslie Tarnacki, SHRM-SCP, CHRO at WorkForce Software in Detroit, said that the rise in cost of living has led many older workers to rethink their retirement.
"Many are readjusting their ideal retirement goals since they may need to keep working for a few more years," Tarnacki said. "Others are rethinking opportunities to remain active and to feel valued and purpose-driven by working longer—even if they reduce the number of hours or days they work."
Improve Benefits to Support, Attract Older Workers
Tarnacki said many employers focus on supporting the needs and wants of Millennial and Generation Z workers. However, if a company does not properly support older workers, it may lack an important talent pool necessary to fill vacant roles.
"[Companies] need to invest in all employees and take into account the needs of each individual employee group," she said.
Research has also shown that older employees can benefit businesses in many ways. They tend to stay in jobs longer, take fewer days off, exhibit a strong work ethic and typically require less training than their younger counterparts.
Employers that are serious about hiring and retaining older workers will need to review their benefits to assess their applicability to older candidates and offer them "a variety of benefits that may be more important to workers of various ages versus a single benefit package," Tarnacki said.
Benefits that support older employees include:
Flexible workplace options such as part-time work, reduced hours, job sharing or remote work.
Health and wellness benefits with specific offerings for older workers.
Policies that enable older workers to gradually transition into retirement by reducing hours or responsibilities over time. These can encourage workers to come back or stay longer.
"Investing in what matters to each individual can be challenging but ultimately will show employees from every generation they are valued," Tarnacki said. "It's imperative to provide an experience that empowers all talent, regardless of their age or background, to create a truly inclusive working experience."
While the cost of benefits for employees over 50 may be greater than that for younger employees, older workers usually have lower overall health care costs due to fewer dependents on their plans. Some may also be on Medicare, which further brings down those costs.
"Older employees want flexible work conditions, autonomy, security, access to training and acceptance," Tarnacki said. "That last point means working in an environment free of ageism."
Article written by: Orville Lynch, Jr.
Mr. Lynch, a member of the legendary two-time Ohio Civil Rights Hall of Fame Award winning Lynch Family.
Mr. Lynch is a nationally recognized urban media executive with over 20+ years of diversity recruitment and serial entrepreneur with numerous multi-million dollar exits.