Enterprise Architecture Solutions for an Aging Workforce

Introduction

The aging workforce is a worldwide challenge that affects all countries and industries. Understanding the aging workforce, its impact on economic and social development, and how to address its challenges to ensure sustainable long-term growth is essential. The aging workforce is a growing issue affecting many countries' economic and social development. As the population ages, fewer workers will replace retirees and help support the economy. This can lead to higher unemployment rates, slower economic growth, and lower tax revenues. To address the challenges of an aging workforce, countries must ensure that they have policies and programs to help them attract, retain, and develop a skilled workforce. This can include improving education systems, increasing training opportunities, and providing better access to health care. It is important to note that a population’s age structure can impact economic development. For example, countries with large youth or elderly populations may find it more challenging to achieve high levels of growth. This is because younger people generally have higher birth rates and are more likely than older generations to spend money on education and other goods and services that contribute to economic growth. Aging populations strain many countries’ social services, such as health care and pensions. As life expectancy increases, the number of people over 65 will continue to grow in most countries. This will put pressure on social security systems, which have traditionally been based on the concept of “pay as you go,” with contributions from current workers funding benefits for retirees.

The term aging workforce refers to workers who are older than 65 years old, as well as those who are close to retirement age. In some countries such as Japan, Germany, and Italy, more than half of all adults are members of this group—an indication that they are not just working longer hours or staying in the workforce past retirement age—they are staying on into their 60s and 70s! For many employers, this presents a problem: how to retain older workers and make them feel valued in an environment where they compete for jobs with younger people. It is a trend that has profound implications for employers around the world. As more and more workers enter retirement age, they will leave behind positions in their companies that need to be filled by novice younger staff. Businesses will have to compete harder than ever for skilled workers—especially those willing to relocate and work long hours in demanding environments.

The global aging workforce is projected to increase, as Figure 1 refers. The aging workforce statistics show that as many as 35% of the workforce will be 60 years or older by 2040, according to a report by the World Economic Forum (2019). This directly impacts businesses since they need experienced employees who can work with technology and adapt quickly to changing conditions or new technologies. There is no denying that the world’s population is rapidly aging. By 2050, the number of people aged 60 or older will increase by almost a billion. By 2060, over 5 billion people aged 65 and older worldwide will be more than double what it was in 2015. Of these, about 1 billion are projected to be in developing countries.

Figure 1.

Forecast aging workforce in enterprises

Source: Own elaboration, 2022