This year or next, something human history has never seen before will occur: the proportion of the world’s population aged over 60 will overtake the proportion aged under five. After that, United Nations projections show the numbers of over-60s skyrocketing to such an extent that it is unlikely the world will ever again be inhabited by more toddlers than older people.
Like wrinkles, bellies and liver spots, the signs of ageing will slowly begin to tell. In the UK, which is relatively youthful compared with the rest of Europe, Japan, or the US, the mean age of the workforce is now 1.75 years older than it was 1991. By 2006, 45- to 59-year-olds will become the largest single group in the workforce.
Between 2008, when the first of the baby boomers retires, and 2025, when the last of them follows, there will almost certainly be a dramatic surge in retirements.
By the mid 2030s, well over a third of the workforce will be over 50. By the middle of the century, fewer workers than ever are likely to be supporting more older people than ever before for longer than ever before. It is estimated that the support ratio of worker to non-worker will switch from about 4:2 today to 2:6 by 2031.
Should we be worried? Futurology thinks we should. In place of a benign silver century, in which human beings enjoy their longevity, several recent books foresee an ‘agequake’, a ‘coming generational storm’, and a ‘demographic timebomb’. Dire predictions include plunging productivity, soaring numbers of workers juggling work with eldercare and childcare, more citizens dying in poverty, and the tradition that future generations have more agreeable lives than previous generations coming to an abrupt halt.
Yet the impact of an ageing population depends to a great extent on the assumption that current patterns of retirement will continue. Recent decades have witnessed a trend towards fleeing the world of work as soon as it is financially feasible.
In 1975, 95 per cent of 55- to 65-year-olds were in work. In 1999, this proportion had fallen to 60 per cent. The National Audit Office reckons low levels of employment among the over-50s costs the economy between £19bn and £31bn a year in lost output, reduced taxes and increased welfare payments. If older workers can be encouraged to be economically active for longer (and employers obliged to stop discriminating against them), then many of the futurologist’s unhappier predictions may turn out to have been as wild as the threat of overpopulation.
In the ambition of persuading more people to work longer, the gathering crisis in pensions funding could be seen to be fortuitous.
Peter Thomson, director of the Futurework Forum at Henley Management College, says it is “blindingly self-evident” that due to pension shortfalls, skills shortages, and an ageing population, people are going to have to work longer. But until attitudes towards work change, he argues that the futurologist’s alarmist predictions are entirely justified.
“The ideas we have about work have had their day,” Thomson says. “Working solidly to a certain age and then not working for the rest of your life will come to be seen as a rather old-fashioned idea. Work needs to be carved into smaller chunks that can be done by people who are winding down.”
Others agree that flexible work is the logical way of mitigating the worst effects of the ageing workforce. Sam Mercer, director of the Employers’ Forum on Age (EFA), describes the need to change attitudes towards retirement as “the priority”. “Thirty years of not working might not be as much fun as we thought,” she says.
Yet there is little doubt that convincing people that work is a stimulating way to spend one’s late middle age is a tricky message to sell. Nowhere is the difficulty more apparent than in the public services. A survey of GPs by the British Medical Association discovered one in four intended to retire between the ages of 55 and 57, while 80 per cent aimed to retire at or before 60. In the wider NHS, the Kinds Fund, a health policy think-tank, says around 150,000 of the one million-strong NHS workforce is over 50 and eligible for early retirement.
Naturally, public service employers are doing their best to promote the careers they offer to the young, as exciting and socially beneficial. Yet the rather grim reality is that work is only likely to become more attractive as retirement becomes less attractive.
What demographic change means for HR
1 Final salary pension schemes will continue to decline
2 Incentives to take early retirement will progressively be eliminated
3 There will be increased pressure to stamp out age discrimination
4 A radical extension of flexible working options will be demanded
5 Pressure will intensify to reform seniority-based pay systems. In the long term, other credible criteria for pay must be found other than time
6 Communicating the implications of an ageing workforce to staff will gradually become an issue
7 HR will be forced to offer older workers more training: 90 per cent of the over-50s receive no development from their employer
8 Greater competition will emerge among employers to attract younger workers: pay may start to decline with age
9 Workforce change will prompt moves to break the psychological association of ‘talent’ with youth
10 Education systems will adapt to the rise in demand for career breaks and multiple careers