How Aging Populations Will Shape Labour Markets By 2031
By the end of this decade, approximately 150 million jobs worldwide will be held by workers aged 55 and above, says a Bain report.
It is forecast that by 2031, workers aged 55 and above will constitute over 25% of the workforce in the Group of Seven countries, according to a Bain & Company report.
This is a nearly 10-percentage-point increase from the numbers recorded in 2011.
By 2031, it is estimated that Japanese workers aged 55 and above will make up almost 40% of the nation's workforce, according to the report titled ‘Better with age: The rising importance of older workers’.
Reflecting this global trend, around 41% of American workers are expecting to work beyond the age of 65, the report said, citing a Gallup survey. This marks a significant upturn as compared with the 12% who intended to do the same three decades ago.
However, an ageing workforce is not exclusive to developed economies. By the end of this decade, approximately 150 million jobs worldwide will be held by workers aged 55 and above, according to Bain's estimates. To put this in perspective, this figure is not far short of the entire current working population of the U.S.
According to the report, with an ageing population, work lives are lengthening. Also, fewer younger people are entering the workforce, which can be attributed to a combination of lower fertility rates and longer educational pursuits.
(Source: Bain report)
Based on OECD data, the longstanding trend towards earlier retirement is gradually reversing. The U.K., for example, has increased its retirement age for both genders to 66—from 60 for women and 65 for men—with plans to further increase the retirement age over time.
Before a recent shift raising the official retirement age from 60 to 61, with plans for further increases in the coming years, the Japanese government struggled with the challenge of raising the retirement age. This had companies resorting to the release of workers upon reaching 60, only to re-employ them under new contracts, often with lower remuneration, the report said.
Even with the demographic shift, it remains rare for organisations to implement programmes that incorporate older workers into their talent system, the management consultancy firm said.
However, with an appropriate tool kit and mindset, an ageing workforce can assist employers in bridging talent shortages and creating high-quality jobs that leverage the skills of older employees into sources of competitive advantage, the report said.
