NOVEMBER 2023
In the tenth episode of our “In Conversation with…” podcast series for 2023, Lucy Lewis, partner at Lewis Silkin, speaks to Shruti Singh, Senior Economist at the OECD Directorate for Employment, Labour and Social Affairs.
“I think what is missing when it comes to age inclusion is really taking that leap forward on making this reality.”
Lucy and Shruti discuss the impact of ageing populations on the world of work and how employers, governments and individuals can respond to demographic shifts and build productive intergenerational workforces.
Key takeaways from the conversation:
Ageing populations are a growing issue: Rapid population ageing due to increases in life expectancy and falling fertility is a key issue for businesses, policymakers and governments across the OECD. By 2050 the proportion of the population in OECD countries aged 65 and over is expected to increase to nearly 28%.
Employers should focus on the employee life cycle: There is substantial individual variation in the support that is needed within age groups and at different life stages. Rather than looking at what certain generations might want, employers should focus on supporting a multigenerational workforce through the whole life cycle at work.
Intergenerational workforces work: Employers that promote age inclusive workforces and successfully combine the talents and diverse outlooks of their employees, whatever their age, generally find that their workforce is enriched and more productive as a result.
Employers can take steps to support older workers: An age inclusive organisational culture plays an important role in supporting longer working lives. To succeed, support must be integrated, taking into account job quality, health and flexibility. Line manager training is essential to embed these components into company culture.
Skills are key: It is important that older workers continue to upgrade and expand their skills over their working life, particularly in light of continuing technological change. Mid-life career reviews, personal development plans and career conversations are increasingly used by employers.
In Conversation with… Shruti Singh
Season 3: Episode 10
Lucy Lewis: Hello and welcome to the Future of Work Hub’s “In Conversation with…” podcast. I am Lucy Lewis, a partner in Lewis Silkin’s employment team, and in this podcast series I will be hosting exclusive discussions with innovators, business leaders and thought leaders to explore their perspectives on the longer-term trends and immediate drivers shaping the world of work.
Now, we know that demographic factors play a significant role in shaping the working landscape, and one undeniable trend is that people are living longer. So, by 2030, one in six people in the world are predicted to be 60 or over. And ageing populations can significantly impact the world of work. They feed into things like the great resignation, the skill shortages that lots of businesses across many sectors have experienced in the last few years. And demographic shifts can also have more subtle implications for the workplace. So, we have seen during these emerging challenging economic times things like underlying tensions from the perception that there are intergenerational inequalities. And the way in which businesses and regulators around the world choose to respond to the shift towards an ageing population is becoming increasingly important.
And I am really thrilled to be joined for the discussion today by Shruti Singh from the OECD. The OECD is an international organisation. It works with governments, policymakers, citizens, to find solutions to a range of social, economic and environmental challenges and shape policies that foster equality, opportunity and well-being for all. Shruti leads the OECD’s work on ageing and employment policy, so she is absolutely the perfect person to discuss these difficult but really important issues with. So, welcome Shruti.
Shruti Singh: Thank you very much for having me on this podcast. I am really delighted to be here to discuss these issues. I am a Senior Economist, as you nicely put it, at the Directorate for Employment, Labour and Social Affairs of the OECD. And at the OECD we have looked at the topic of population ageing for almost more than two decades, to support governments to reap the benefits of rising longevity, but also respond to the challenges related to rapid population ageing. More recently, our work, specifically my work and the team, has focussed on the role of business and how to really rethink and redesign employer practices with a view to create and embrace age-inclusive workforces.
Lucy Lewis: That is really fascinating, and it is great background. Thank you. One of the things that I guess is an obvious question is: we understand that this is happening, we can see the demographic statistics, it is reported a lot in the news, but why is it important? Why is it important that we can continue to engage older workers in the workplace?
Shruti Singh: Yes. So, rapid population ageing is a key issue for policymakers and governments across the OECD. We are expecting, for instance, the share of the population aged 65 years and older to increase in the coming decades from 18.7% in 2023 to nearly 28% by 2050 in the OECD on average. Now the pace of population ageing has already been quite substantial in many advanced economies such as Japan, Italy and Germany, where half of the population is older than 45 already. But it is not a concern of just advanced economies. Populations in some low-income and emerging countries, that are currently relatively young, are also set to become significantly older, reflecting their low or falling fertility rates and further increases in life expectancy. So, we have got to give people better employment choices and opportunities at older ages, given that they represent such an important share of the workforce.
Lucy Lewis: It is fascinating. The statistics there are really interesting and actually it's a brilliant way to frame our discussion. Quite a lot of the people listening to this podcast are employers. They are running businesses. And one of the things I think they will be really interested to understand from you is what should they do to respond to this so that the changing expectations, the recognition that workers do need to adapt to having longer, more productive, healthier ageing and within that obviously more productive, healthier, longer working. And when I spoke to Dr. Eliza Filby, a generational expert, one of the things she said which I thought was really interesting, is that what employers should do is stop asking themselves what certain generations want but focus instead on sort of life stages. We want, as an employer, or we should, as an employer, support the whole life cycle at work and I thought that was really interesting. So, I am fascinated to hear your ideas and thoughts about two things: what employers can do to support employees in having longer, more productive, healthier ageing, but also are there things they should be doing about embracing multigenerational workforces?
Shruti Singh: That is a very interesting point. You know, indeed, there are lots of myths and perceptions around workers of different ages, especially around what they want when it comes to the workplace or their attitudes in the job market. But our work has shown more similarities than differences than are often reported in the media. So, among other things, all workers equally value a job that is secure, for instance, meaningful a job that pays well and offers flexibility to help workers better combine their work, personal and family obligations.
Of course, there are differences between ages. For instance, older workers tend to have more chronic health problems, meaning they might need more support to stay active at work and to accommodate the symptoms of chronic pain or fatigue. But really beyond the average, there is substantial individual variation in the support that is needed within age groups and at different life stages. So, for instance, younger individuals also have chronic issues and, therefore, employers who can successfully combine the talents and diverse outlooks of their employees, whatever their age, generally find that their workforce is enriched and more productive as a result.
And how do we achieve this? That is the big question. So, our earlier work, based on a report that we published a couple of years ago on promoting age-inclusive workforces, really highlighted three actions that employers can take to fully embrace the benefits of a multigenerational workforce. First of all, it is important to attract and retain their talent. Here, it is key that old fashioned and discriminatory attitudes in recruitment really needs to be thrown out of the window. They really make no business sense. If we discriminate in hiring, whether that is older workers or younger individuals, this really ultimately disadvantages employers who fail to draw on the experience and abilities of a significant talent pool and, really, is an unfair practice and damages employment opportunities for individuals just because of their age at all ages.
Second, is to really ensure a good working environment and a healthy working life for all workers. So, a recent survey among employees conducted by AARP showed that, unfortunately, older workers often have much less flexibility in their working arrangements than younger workers, for instance. There are many measures that can improve flexibility for older workers and improve their retention. Let me just highlight a couple of examples here.
So, for instance, Solastice, a French firm, has introduced measures to increase career longevity and maintain the employability of workers as they age. The way they do this is by conducting a mid-career review every five years from the age of 45, where workers have the opportunity and the chance to meet with an HR individual to discuss their working conditions, but also their training opportunities and career prospects.
We are also seeing a lot of good innovative practices from firms that are really offering comprehensive and integrated workplace health programs that focuses on changing the overall culture of the organisation. So again, a good example is from the US, where Torq, a US manufacturer, a couple of years ago, put together a service that looks at health but also social and community aspects to improve overall job quality. So, for instance it offers regular screening for certain illnesses e.g., diabetes. They also offer an onsite pharmacy, as well as a one-on-one financial counselling. So, it is really not just about offering something on the edges. It has to be integrated. You have got to take into account the job quality, the health, the flexibility components of the workplace and embed it in the company culture. And all managers have to be given sufficient training on all components for these programs to be effective.
Last but not least, we know that skills are incredibly important at the workplace and so, workers and employers must continuously upgrade or expand their skills over their working lives. Here again, there are a number of practices that are coming about. We see a lot of innovations. For instance, mid-life career reviews or personal development plans and career conversations can really help employees make informed decisions about their training and development.
Lucy Lewis: Thank you. There is some brilliant, really helpful practical advice in there and those three actions make it very digestible. And, actually, I really like the perspective that actually by improving the workplace for older workers, you are actually improving the workplace for everybody. And that goes to that critical question that actually we have to accept whatever age you are, our working lives are going to be longer. Making them more productive is really critical.
You mentioned skills Shruti, and I wanted to ask you a little bit about that because there is a lot in the press all the time about technological developments. Generative AI is, you know, something that is talked about a lot at the moment and lots of people are obviously suggesting that those kind of technological advancements will have an impact on the number of jobs. So, jobs being lost, other jobs being replaced. And my fellow partner, James Davies, he has recently published a report that is quite interesting, because it suggested by 2050 we might see a world where actually we have got too few jobs for the number of workers. But perversely, the jobs that we have got, there are continuing skill shortages. There are not enough employees with the right skills to do the jobs that are being created. And because you mentioned skills, I am really interested to hear your perspective on that skills issue and emerging technologies, and what that means for an ageing workforce, what it means in terms of challenges. But I think, importantly, are there opportunities that presents?
Shruti Singh: Well, this is an area that is still unfolding in front of us. So, of course, artificial intelligence or other technologies alike are expected to have a significant impact on the labour market, as well as having implications for an ageing workforce. And there are inevitably going to be both potential benefits and risks associated with such technologies. I think one major concern that you have already highlighted is that, as the technology gets better and better, more traditional skills will become obsolete, so new opportunities and jobs will be created. And therefore, we need to ensure that older workers are prepared and ready to grasp the opportunities driven by technological change, but also, of course, as we transition to a greener world of work.
Lucy Lewis: I can see that, and I can, I can see the challenges, particularly with access to skills and that being difficult. How do we go about reducing those inequalities?
Shruti Singh: So, I think one thing that both governments and employers need to embrace and do better at is really to provide equal access to basic skills and digital skills, which is going to be essential to help them reap some of the benefits of technological change. So, one benefit, potential benefit, that technology can bring is, for instance, for older workers, to help them or enable them to work online, thereby reducing commuting time, for instance, which may help in turn better juggle their health and caring needs. There is also evidence that AI, for instance, can have a positive impact on job quality. So, currently around the OECD around a third of older workers are stuck in what we call poor-quality or high job strain jobs, which we know is a key driver for forcing people out of the labour market. And clearly, the improvement of technology can help remove some of those physical aspects of the jobs, for instance, older workers employed in construction or manual work. On the other hand, it may worsen work intensity and, more generally, there are risks around privacy as well as AI in what it does to discrimination and hiring of older workers in the labour market. So, I think there are pros and cons and we have got to watch this space. There is a lot of research we are undertaking at the OECD looking at these issues, and we are hoping to really help both businesses and governments make informed choices as this technology is shaping the labour market.
Lucy Lewis: It is great to hear that the OECD are involved, because that investment in learning, understanding, researching is obviously so critical as the technology moves so quickly. You mentioned governments and I wanted to ask you about that. We have talked a little bit about things from an employer’s perspective. I thought your action plan was really helpful. But obviously, governments and regulators have a role to play in this too. They have a role too in how they respond to ageing workforces. It is clearly a significant economic issue, as well as an issue for employers. And you will know in the UK the government has been looking at this. They have had a number of reviews and consultations and actually interesting for some of what you said. A lot of that has been looking at the relationship between health and work and longer working means ensuring that people can stay healthy for longer. But one of the debates has always been, what is the role for sort of hard legislation? How helpful is hard regulation and legislation that forces changes in corporate behaviours because it suddenly becomes unlawful to act in a certain way? Or is it better to persevere with the kind of softer sort of change? You talked really interestingly, I thought, about how important it is to ensure that managers are properly trained, they understand the life cycle challenges that employees will face. So, I am interested in your views about what is the role of governments and regulations or should we focus on softer change within business.
Shruti Singh: It is very interesting. I think the response to that is we need both. So, traditionally a key lever that governments have used for a long time to really improve longer working lives, for instance, has been through the curtailment of early retirement benefit schemes, which, in reality, have led to an increase in employment rates and longer working lives in Europe and OECD countries over the past decades. Traditionally, back in the 70s, early retirement benefit schemes, for instance, were one of the main routes where people were leaving the labour force altogether, which had a detrimental impact not only on the government budgets, business, but also on workers themselves. We do know there is a lot of evidence showing that employment is good for your health and mental health. So, there is really much that has been achieved through that regulation, but we need to make sure that we work more closely with employers. We need employers that are going to actually hire the workers that are out there as well.
And again, there is a lot of good practice where governments are complementing and filling in the gap of what employers are not doing. So, for instance, many governments provide paid leave to care for an older dependent. But there is often a stigma associated with using care leaves. So, organisational culture plays an important role in ensuring take up for such programmes that are government provided. So, for instance, Austria and Estonia also have expanded their flexible retirement options, which allow the combination of pensions and paid work to help retain older workers for longer. Again, we see very low take up of flexible retirement schemes by workers because of the stigma about what your manager is going to say, what are your colleagues going to say if you are working part time and therefore, this is where the employers have to play a greater role to make use of some of these existing schemes.
So, large employers clearly have the resources and the means to do more. But when we talk about SMEs, they often struggle to retain the talent of an age-inclusive workforce. But here again, we see a lot of innovative good practices by governments that are supporting small and medium enterprises to make sure that older workers and adults are not left behind. So, for instance, in Germany, the Public Employment Agency supports training of low skilled and older workers in SMEs. They essentially give subsidies for small companies to help train their workers. They cover almost 50% of the training costs, which is quite enormous.
Lucy Lewis: There were some really good examples there that actually show really why the OECD work is so important, because it is really about partnership isn't it? Hard legislation cannot be enough on its own. An integration of approach between government and private business and employers is actually the key to driving this forward and the OECD sits squarely in ensuring that happens. So, the work you are doing is obviously really important and we are very grateful to you for it.
There is a question, Shruti, that I have been asking everybody on this podcast series I would like to finish up by asking you. The last few years have shone a spotlight on the future of work. We are talking about it much more. We are talking about the myriad of opportunities and challenges that lie ahead. But what I am really interested to hear from you is what you think is missing from the conversation about the future of work. What's the thing that is not getting enough attention, we are not talking about enough?
Shruti Singh: I think here at the OECD, it has been a number of years where we have generated a lot of evidence presenting the business case for leveraging the benefits of an age-inclusive workforce. We have highlighted a number of good practices on what employers can do, what works. And I think what is missing when it comes to age inclusion is really taking that leap forward on making this reality. And therefore, what we need to focus going forward is really how we can create a safe space or engage greater with employers to understand what can we do to enable them to make some of their data more transparent, work closely with businesses that can share their data on what really works. It is only by good evidence-based practice that we can determine what works and help that disseminate and make a reality not just for large employers, but for all, all employers and all workers in our economies. So, I think going forward, we have a lot of data at the OECD that we collect through national registers surveys, but, very often, there is a huge gap on what business and how they contribute to sharing their data and really improve that evidence base. So, I think what I would love to see is, you know, how we can really work together with businesses and employers to create that better evidence and know-how and disseminate some of this research going forward.
Lucy Lewis: Thank you so much, Shruti, for sharing your thoughts and the work of the OECD. It has been really fascinating. If people listening would like to know more about the work Shruti does you can find her on LinkedIn. Thank you Shruti.
Shruti Singh: Thank you very much for this fascinating conversation.