How should a 22 year old—or a 65 year old, for that matter—think about longevity?
Hodin: You have to re-imagine the structures and norms we inherited from the 20th century. If you continue to say you’re going to finish working and you know you won’t have the savings, one answer is to keep working, keep active and stay engaged. We think that’s a legitimate path and the benefits of it are consistent with the data we’re starting to see.
Many people do need to work longer—not many of us have the savings for 30 years of retirement that we didn’t expect to have when we started working. But more and more people want to stay engaged. What’s required is both a cultural and a physical shift toward a workplace that looks and feels different than the one we knew back in the 20th century. And employers are adjusting on the basis of good old-fashioned self-interest. They know if they respond, they can attract and retain the best talent.
Market Realist – To reap the benefits of an aging world, US companies need to bring in policy changes that help workers stay in the workforce and remain productive longer. According to an article in the Harvard Business Review, this can be achieved in various ways.
- Generate flexi-plans for the older workforce. Instead of a mandatory retirement age, develop flexible plans that allow employees to work part-time beyond a certain age.
- Give importance to the experience of an older workforce. Companies should be aware of employee track records and loyalty and give experience its due. According to the Harvard Business Review, companies like Vodafone (VOD) and Home Depot (HD) are building in these criteria when assessing employees for hiring and promotions.
- Create jobs targeted to capitalize on the skill sets of the older workforce. Companies should give older employees jobs that are not as physically trying and that capitalize on their skill sets. As observed by the Harvard Business Review, companies like Marriott (MAR) and Michelin (ML) realize the importance of using the skill sets of their older workers. Marriott helps older employees train and transition to jobs more suited to their capabilities. Michelin rehires retired people in supervisory and advisory roles.
- Modify workplace ergonomics. Companies should modify ergonomics to make older employees more comfortable and prevent musculoskeletal disorders (or MSD). BMW (BMW) has adopted various changes in its workplace ergonomics to aid older employee productivity.
Companies should also pay attention to the needs of caregivers in their workforce. Doing so would bolster current worker productivity.
Technology (XLK) (IYW) and healthcare (XLV) are likely to become the sunrise sectors as the global population continues to age. Investors should look to these sectors or to younger nations of the world such as India and Indonesia for long-term investment opportunities.
Read our series on How an Aging World May Impact Your Portfolio to delve deeper into the topic.