Human Resources: Executive Summary:Graying of Society

Rising life expectancies and low fertility rates are combining to create a lopsided population that will impact the world economically, politically and socially in the years ahead.

In the U.S., population projections from 2000 to 2025 show growth heavily skewed toward those age 55 and older. While the growth rate for those between the ages of 20 and 24 will be 18.7%, the rate for those 60 to 65 will be 74.5%, and for those 65 to 69 it will be 108%.

But the graying of society is by no means limited to the U.S. Global life expectancy has risen to an all-time high of 67 years, according to the Population Reference Bureau. In 2001, 15% of Europe's population was age 65 or older, while in North America that percentage was 13%, and in Japan 17% of the population were already considered seniors. In fact, the fastest-growing segment of the population worldwide is those age 80 or older, where the ratio of women to men is almost two to one.

Combine these increasing life spans with low fertility rates in much of the world and the vision of population imbalance is complete. It is true that the decline in fertility rates that presented itself in recent years appears to have leveled off, but not nearly enough to offset what Ellen Galinsky, president of the Families and Work Institute, describes as the "demographic avalanche" of an aging population that awaits the world.

Census statistics have given employees, business and government a head start by alerting them to the challenges of the future, and people are slowly getting the message. The percentage of workers who are "very" or "somewhat" confident of a comfortable retirement fell four percentage points in 2003, from 70% in 2002 to a low of 66%, according to the 13th Annual Retirement Confidence Survey. After three years of a sinking stock market, workers' confidence about a comfortable retirement had been eroded, the poll found. Although a majority of Baby Boomers still feel fairly optimistic about their retirement, many plan to work longer. Already, in fact, the trend toward earlier retirement has begun to reverse itself in the U.S.

Of course, it's hard to predict the economy and job market of tomorrow, but it's quite possible that the incentives for older workers to remain in the workforce will need to be accelerated. Phased retirement programs remain, however, a work in progress. With appropriate legislative support, retirement will no longer be a cliff that one must suddenly drop off but something that one can drift into and out of.

Employers are also grappling with the issues of an aging workforce in other ways. Employers are, for example, becoming more aware of the costs to productivity when employees are involved as caregivers to elderly relatives. Caring for family members with Alzheimer's disease, for example, increases absenteeism and job loss, according to a study of Alzheimer's caregivers. The study revealed that roughly 40% of caregivers had missed three or more days of work in six months and that 17% had missed 10 or more days in the same period.

The SHRM 2003 Benefits Survey reported that the proportion of employers providing referral services for eldercare increased from 14% in 1999 to 20% in 2002. Among other age-related issues of concern are health insurance costs, the need for retraining, the need for tolerance among people of different age groups, and life insurance costs.

It is clear that the challenges ahead are formidable. Responsibility for grappling with the effects of an aging population rests with many. Neither governments nor anyone else will be able to change the course of our demographic destiny. The issues brought about by this phenomenon, however, belong to all - government, business, healthcare, financial, and educational institutions, and the people.

To have full access to this report, become a member of i4cp today at www.i4cp.com.

The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.