25% of G7 workforces to be over 55 years old by 2031

26 September 2023 Consultancy.uk 2 min. read
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Leading industrial nations will see their workforce age significantly within the next few years. Older workers will make up over a quarter of the G7 workforce by 2031, with 150 million more older workers worldwide by the end of the decade.

Workforces in the G7 nations (the UK, the US, Canada, Germany, France, Italy, and Japan) are projected to age more quickly than young workers can be attracted. That is according to a new report from Bain & Company that analysed workforces and workers’ motivations.

There will increasingly be a need for companies to create roles that benefit older workers, which is not only ethically the right move, but also “a business imperative,” according to the report.

Share of workers age 55 and older

Organisations have long decried the weaker loyalty of younger employees (‘millennial’ and ‘gen Z’), a problem now made worse by aging workforces.

Part of the reason for aging workforces is a general trend in G7 countries towards low birth rates. Younger people are also taking longer to finish their educations. In addition, retirement ages have been pushed back in several G7 countries – though not without some controversy.

France saw the fight over retirement ages spill out into the streets when mass protests took over major cities at the beginning of this year. French president Emmanuel Macron pushed through a law raising the retirement age from 62 to 64 despite the unrest.

Distribution oflabor force, by location

Japan leads the pack with the most mature workforce, with 28% of its workforce in 2011 over the age of 55, a figure that is expected to grow to 38% by 2031. The percentage of workers over the age of 55 is projected to more than double in Italy, from 14% in 2011 to 32% in 2031.

The phenomenon of aging in the workforce is not just a problem in developed nations. Similar trends are expected in China and Brazil, for example. The overall number of older workers worldwide is expected to increase by an incredible 150 million by 2030.

“Despite the shift, it’s rare to see organisations put programs in place to integrate older workers into their talent system,” according to the Bain & Company report.

Percentage of workers globally who feel loyal to employers, by age group

In order to avoid disruptions, the report suggests organisations should retain and recruit older workers by better understanding their motivations and better catering to their needs. Older workers are more geared towards autonomy and flexibility, with many saying they look towards working fewer hours in preparation for retirement.

Some Japanese companies, like Mitsubishi Corp and Tokyo Gas, have designed programs for retaining older workers. BMW also spearheaded a program of ergonomic adjustments to their factory lines that helped older workers and increased productivity overall by around 7%.