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We’re Retiring Later Than Ever. That’s Great News for Companies.
When employees stay in the workforce longer, businesses have access to a larger, more experienced applicant pool
One of the most significant economic and demographic trends throughout almost the whole of the twentieth century was a drop in the retirement age. Beginning after World War II and accelerating through the 1960s and 1970s, this trend led to a dramatic decline in work among those aged 55 to 69.
But earlier retirement soon went from being the hallmark of a fully industrialized economy to becoming a public policy conundrum. Larger populations retiring sooner meant that pensions had to be paid over a longer period, which put greater strain on social security systems. The economy also had to forgo potential output that would have been produced if retirees had kept working for just a few more years.
Some systems create a financial incentive to delay retirement and continue working beyond the official retirement age.
Finding ways to get citizens working longer was a policy imperative that preoccupied politicians, economists, and gerontologists (those who study aging) for decades. But then suddenly, in the mid-1990s, the trend reversed sharply. A larger proportion of people over 55 began delaying retirement. Here’s what caused this sudden shift on retirement — and why it makes sense for companies to recruit older people sticking around in the workforce.
Work is physically easier to perform
In our primarily service-based economy, many jobs requiring intensive labor have been shed from the economy or made easier through technology. Compare industries like mining, agriculture, and fishing today versus 70 years ago — technology has made many jobs within these industries far easier to perform, and automation has allowed certain workers to transition to more sedentary roles.
Of course, this process did not happen overnight, and it resulted in significant disruption to the labor market along the way, but this has made it easier for people to continue working well beyond the traditional…
