Grey matters: Why older employees are essential for talent success

As AI commands the business world’s attention, reshaping industries and dominating headlines, this intense focus could overshadow other critical issues that may prove equally disruptive.

Number one on my list: global demographic transformation.

Birth rates worldwide have fallen steadily in recent decades, and we are now at a historic low, according to the International Monetary Fund (IMF). It is estimated that by 2030, the world could face a staggering talent shortage of over 85 million employees, with the most significant contributing factor being the rising inactivity among employees aged 55-74.

In the US and UK, this alone accounts for more than a third of the labour gap. This should raise alarms in boardrooms and push leaders to reinvent their talent strategies.

While demographic shifts have been evident for decades, the conversation is too often about declining fertility rather than rising life expectancy. According to the United Nations Population Division, average global life expectancy improved to 71.7 years in 2022 and is expected to rise to 77.3 by 2050.

A changing landscape for older employees

People are living longer, and some want to remain in the workforce beyond traditional retirement age. And yet, organisations underutilise one of their most potent resources: older employees.

Across the G7, the gap between official retirement ages and the actual age at which people leave work varies widely. Italians and the French tend to retire years before reaching their statutory pension ages (the age at which they can collect benefits), while in Japan, employees often remain employed well beyond 65. In North America, the UK, and Germany, retirement typically occurs just shy of the official benchmark.

It is also interesting to note that several G7 countries have already or are planning to extend retirement age:

• France: Increased retirement age from 62 to 64 in 2023. Proposals are under discussion to raise it further to 66 by 2045.
• United Kingdom: Currently 66, rising to 67 by 2027-28 and 68 by 2044-46. The government has a review underway considering a possible rise to 70.
• Germany: Currently 66, rising to 67 by 2031; ongoing political debate about potentially increasing further.
• Italy: Raised to 67 in 2019.
• United States: Gradually rising to 67 (for those born after 1960).
• Japan: Standard pension age is 65; policies in place to raise eligibility to 67 in the coming years, with deferral possible to 70-75.
• Canada: Retirement age of 65 remains in place, with no plans to raise. Earlier proposals to move to 67 were reversed.

The ageism blind spot

A joint study conducted by the Institute for Corporate Productivity (i4cp) and the Age-Friendly Institute found that, despite strong business incentives, employers often fall short in engaging, supporting, and retaining older employees (defined by the Age-Friendly Institute as those aged 50 and above).

The study was grounded in two surveys that ran concurrently: One drew insights from 278 global business and talent leaders, the other surveyed 255 older employees across 11 countries.

The research revealed a striking disconnect between employer perceptions and employee realities. Seven in 10 older employees reported that their younger colleagues received preferential treatment in terms of pay, promotions, and opportunities. Over half reported being the first out the door during downsizing, and 70% saw high-visibility projects consistently assigned to younger employees.

Employers, however, overwhelmingly believe they treat all employees equally. Eight in 10 leaders surveyed said their organisations value employees based on qualifications, and nearly 60% asserted that their cultures affirm the worth of older employees. This gap suggests that even well-intentioned organisations may be missing subtle, consequential biases that have a wide-ranging impact on their workforces and cultures.

Hiring practices tend to overlook seasoned talent

When it comes to talent acquisition, preference for younger hires is stark: Only 29% of employers have recruitment strategies targeting Baby Boomers.

Partnerships with advocacy groups for older employees are rare, and less than a third of organisations re-engage retired employees—despite many expressing willingness to return for the right opportunity.

Given that 90% of older individuals surveyed by i4cp and the Age-Friendly Institute are either working, job-hunting or open to new roles, failing to court this demographic leaves employers competing for talent with one hand tied behind their backs.

Why older employees?

When engaged effectively, older employees can be a powerful competitive advantage. They bring deep institutional knowledge, subject matter expertise and a stabilising influence—yet these contributions are often undervalued. The study found major perception gaps in what employers believe older employees offer:

• subject matter expertise (8x undervalued by employers)
• institutional knowledge (4x gap)
• dependability (3x gap)

Ignoring this vital talent pool not only risks losing critical skills, but can also erode organisational culture, morale and even employer brand reputation.

READ MORE: Reimagining ageing: How HR leaders can foster intergenerational connection at work

Over the past two decades, older employees have weathered a series of profound shocks—from 9/11 and the Great Recession to the Covid-19 pandemic. Their experience makes them invaluable, empathetic on-the-job coaches, helping younger employees build resilience, grit and adaptability, and develop these skills more quickly than formal training alone can provide.

What older employees value versus what employers think

Another key misalignment lies in understanding what motivates older employees to join organisations and stay. While employers often prioritise career advancement programmes, mentorship roles and leadership training, these offerings rank far lower for older employees themselves.

Instead, the research found that top drivers for employees age 50+ are financial security, mental stimulation and social interaction—supported by practical job attributes such as:

• flexible work hours (49%)
• remote work options (41%)
• predictable schedules (33%)
• comprehensive healthcare benefits

Failing to align offerings with these priorities means missing the mark on engagement and retention of older employees. And engaging older employees is not just the right thing to do—it is a strategic imperative. The benefits ripple beyond the organisation:

• Workforce diversity strengthens brand appeal and innovation.
• Economic impact grows as more people remain productive longer.
• Knowledge transfer helps futureproof the business against skill shortages.

Conversely, exclusion can result in legal risk, reputational harm and diminished productivity.

Recommendations for HR leaders

1. Make age diversity a strategic priority. Secure leadership buy-in, embed age diversity into inclusion and opportunity statements and ensure branding reflects inclusivity across life phases and stages.

2. Audit and revamp talent practices. Remove age-biased language from job postings, broaden candidate sourcing to include the 50+ demographic and sponsor employee resource groups for older employees.

3. Leverage older employees via an internal talent marketplace. Offer phased retirement, part-time roles or project-based assignments to retain and re-engage experienced talent. Consider including phasing retirees in the organisation’s internal talent marketplace.

4. Align engagement strategies with actual needs. Focus on flexibility, predictable schedules and healthcare benefits—matching what older employees value most.

5. Promote cross-generational learning. Formalise coaching, mentoring and knowledge transfer programmes, pairing seasoned employees with newer hires for mutual benefit.

As fertility rates decline and life expectancy rises, older employees will represent an ever-larger share of the labour market. The organisations that thrive will be those that embrace this shift, replacing outdated assumptions with evidence-based strategies that empower every generation to contribute fully.

For HR executives, the path forward is clear: An agile talent strategy must include age inclusivity—not as a nice-to-have—but as an irrefutable business necessity.

About the Author:

Lorrie Lykins is Vice-President of Research at the Institute for Corporate Productivity (i4cp). This article was first published on HR Executive.