Driven by increased life expectancy, shifting demographics, a cost-of-living crisis, and global talent shortages, the concept of retirement is evolving.

Retirement – once a predictable endpoint in the professional journey – is being reimagined as a flexible continuum of work and engagement worldwide. For leaders, this reinvention offers both challenges and opportunities to harness the wisdom and expertise of older professionals in multigenerational workplaces.

The demographic shift: An urgent call to action

Global populations are ageing rapidly. According to the United Nations, the number of people aged 65 and older will double by 2050. Simultaneously, birth rates in many developed nations have declined below replacement levels, leading to labour shortages already being felt across industries as diverse as insurance, healthcare, mining, and hospitality. Companies that fail to adapt to this reality risk paying over the odds to attract scarce younger talent and losing valuable expertise, institutional knowledge, and leadership insights by prematurely letting go of older employees. (AltoPartners Special Report: The Ageing Workforce: A dividend to be leveraged or an HR problem to be managed?).

This shifting demographic demands a rethink of traditional retirement and career models. Leaders must explore new frameworks that allow individuals to contribute meaningfully well beyond the conventional retirement age of 65. Such models are not only equitable but essential for addressing skills gaps and ensuring business continuity.

Rethinking retirement: Beyond the “three-phase model”

Traditionally, workplace policies were based on a ‘learn, earn, and retire’ career trajectory, a model developed during the Industrial Revolution that remains entrenched in many parts of the world. For knowledge workers, it assumes that people typically enter formal employment after university at around age 24, work until age 65, and then retire.

This model no longer works for two reasons, says Dr James Lappeman of the University of Cape Town Liberty Institute of Strategic Marketing in South Africa: Firstly, if you’re reading this on your mobile phone, it’s safe to assume that you are not ageing as your forebearers did. Secondly, the learning phase has been extended, with many young people delaying the onset of independence either by continuing to live with their parents, taking breaks to pursue passion projects or studying for longer in the hope of securing better employment prospects.

The upshot is that, in the twenty-first century, it now makes more sense, says Lappeman, to view the model in two parts. In the first life phase, people learn and earn (age 0-50), with the second life phase starting at 70, progressing gradually from active to restricted and dependent ageing.

In the middle of these two phases is what has been dubbed ‘the grey zone’ – the period between 50 and 70 when people transition from full-time earning to part-time retirement.

This grey zone offers a wealth of opportunities for businesses to engage older employees in roles such as part-time consultants, fractional executives, and mentors. These arrangements provide prized flexibility for older professionals and address organisational needs for experienced leadership in times of uncertainty.

The leadership imperative: Creating multigenerational synergy

Navigating this new reality requires a multigenerational mindset that begins with leaders willing to challenge stereotypes about age and performance. It also requires them to consciously and intentionally create an environment where employees of all ages can thrive.

Jean-Paul Hokke, Managing Partner of Leaders Trust / AltoPartners the Netherlands says: “A key message that came up repeatedly when talking to clients who successfully integrated a multigenerational workplace was the need for companies to ensure that employee cohorts develop mutual understanding and respect for each other’s experiences and viewpoints as a precursor to collaboration. During COVID-19, employees close to retirement exited the formal economy, leaving critical skills gaps and taking with them valuable institutional knowledge. This was the catalyst for many Dutch companies to work hard to retain older employees, even people past retirement age. They also became more open to hiring older people.

Without exception, though, they had to contrive situations to make the different generations mix. It did not take place naturally. But once they put them together, they found that the younger cohort was interested in learning from their older colleagues, and vice versa.”

This includes promoting reverse mentoring, where younger employees share technological expertise with their senior counterparts, and encouraging and equipping older professionals to take on mentoring roles.

Combatting ageism: Shifting mindsets and policies

This is, however, far from the norm. Unemployed older candidates who lose or leave their jobs through retrenchment, restructuring or relocation are still extremely hard to place. Many employers harbour misconceptions that older professionals are less adaptable or innovative. However, research dispels these myths. According to a study by the Organisation for Economic Co-operation and Development (OECD) and global nonprofit network Generation, 89% of employers found that older workers performed as well or better than younger employees, and 83% noted comparable or superior learning agility.

Combatting ageism starts with leaders willing to critically evaluate hiring practices, workplace policies, and cultural norms. This includes replacing age-specific requirements in job postings with skills-based criteria to help attract a diverse talent pool. Additionally, acknowledging the different life stages of each generation and tailoring benefits accordingly can enhance inclusivity and employee satisfaction.

Flexible work models: The key to retaining talent

Flexibility is critical for retaining older employees who seek a balance between professional engagement and personal well-being. Phased retirement plans, hybrid work models, and part-time opportunities enable older professionals to remain active contributors while reducing stress and time commitments. In particular, fractional executive roles allow senior leaders to maintain personal flexibility and provide strategic guidance to smaller firms that would not ordinarily be able to afford their expertise. Similarly, remote work options (to reduce travel and commuting) and ergonomic adjustments have been shown to enhance productivity and well-being for older employees while at the same time building organisational resilience.

Building a culture of continuous learning

Fostering a culture of lifelong learning is a critical component of reinventing retirement. Neuroscientific research suggests that while learning styles evolve with age, the capacity to acquire new skills remains intact. Providing tailored training programmes and upskilling opportunities ensures that older employees remain competitive and confident in the workplace.

Companies that invest in such initiatives demonstrate their commitment to inclusivity and adaptability, paving the way for a sustainable and age-diverse workforce.

Accepting the leadership challenge

Reinventing retirement is not merely a response to demographic trends; it is an opportunity to reshape the future of work in a way that benefits societies and economies. Leaders who embrace this challenge will create workplaces that are not only equitable but also innovative and resilient – future-proofing themselves against talent shortages, loss of institutional memory and the inflationary pressure of higher wages.

By valuing the contributions of older professionals, fostering intergenerational collaboration, and implementing flexible work models, organisations can unlock the full potential of their workforce, effectively address labour shortages and build a legacy of inclusivity and excellence for generations to come. It’s time to challenge long-held beliefs about what a CEO, a board, or a career path should look like and move past stereotypes about age and performance to create conditions that allow all employees to thrive at each life stage.

FURTHER READING

AltoPartners Special Report: The Ageing Workforce : A dividend to be leveraged or an HR problem to be managed?

Ask Alto: What is a perennial mindset, and why do leaders need to embrace it?

Written by Gail Strauss