Organizations are changing in big ways. And while many people are looking for clues in the economy, Brexit, and the current administration, there’s another change — almost a revolution — quietly taking place right under our noses. That change is the massive shift in workplace demographics which will impact every industry.
The future of work will look very different than it does today.
To remain strong and successful throughout the next years, organizational leaders need to get in front — and stay in front — of some very powerful trends.
To understand this massive transformation, we are going to discuss four, meta demographic trends:
- Longevity
- Women in business
- Diversity in the workplace
- Freelancing
Trend One: Longevity
Our workforce is aging. A US Baby Boomer, someone born between 1946-1964, turns 50 years old every 8.5 seconds. According to the US Census Bureau, 20% of the total U.S. population will be over the age 65 by 2029. The big question is: will Baby Boomers retire at age 65?
If they do retire, they will do it differently than in the past, using 4 phases:
- Pre–retirement: Five years before retiring, 37 percent of pre-retirees who want to work during retirement will have already taken some meaningful steps to prepare for their post-retirement career; this rises to 54 percent among those within two years of retirement.
- Career Intermission: Most pre-retirees do not seek to go directly from pre- retirement work to retirement work. They want a break to relax, recharge and retool. More than half (52 percent) of working retirees say they took a break when they first retired. These career intermissions average 2.5 years.
- Re-engagement: On average, this phase lasts nine years and includes a new balance of work and leisure. Compared to those in their pre- retirement careers, people working in these “Flex Careers” are nearly five times more likely to work part-time (83 percent vs. 17 percent) and three times more likely to be self-employed (32 percent vs. 11 percent).
- Leisure: In the fourth phase of retirement, people welcome the opportunity to rest, relax, socialize, travel and focus on other priorities. Working retirees expect health challenges (77 percent) or simply not enjoying work as much (61 percent) to be the most likely causes to permanently stop working.
Who is taking the place of retiring Baby Boomers?
As Baby Boomers leave, who’s coming in? Millennials, those people born between 1981 and 1996. Millennials care deeply about an organization’s mission, purpose, and values. The largest part of the US workforce, Millennials also bring along new challenges. According to a Deloitte survey:
- 58% of Millennials expect to leave their jobs in three years or less.
- 79% of Millennials would consider quitting a regular job and working for themselves in the future.
- 58% think the corporate world is outdated and want to carve their own path.
If this is what Millennials expect, how do organizations adapt accordingly?
Trend Two: Women in businesses
A US seismic shift occurred in the 1970s and ‘80s when, for the first time since before World War II, married women with young children began to make their way back into the workforce.
The role of women in the workforce is changing very quickly—and that’s the second major workforce trend to discuss. Women are more engaged at work (33%) compared to men (28%). Women hold as many college degrees as men and earn 50% more graduate degrees as men.
Yet big challenges remain. It is expected that it will take 475 years for women to reach equality in executive suites. Though women hold 53% of entry level jobs, they hold only 26% of senior management roles and only 3.1% of senior executive positions at Fortune 500 companies.
What do women want?
For women, work flexibility (83%) ranked as the most important job factor when evaluating job prospects. Work-life balance came second at 75% and salary was ranked third at 74%. Yet for many reasons they’re not getting what they want. Consequently, women are voting with their feet. The number of firms owned by minority women has grown 163% since 2007. There are more than 12.3 million women-owned firms, employing 9.2 million people and doing $1.8 trillion in sales.
If you’re not accommodating women in the workforce, you’re training your competition. Is that what you want to do?
Trend Three: Diversity in the workplace
The third demographic trend is diversity. According to Statistics Canada Agency, deaths in Canada are expected to outnumber births by 2030; immigration will soon be Canada’s only source of population growth. In another example, up to 30% of the UK’s population will be from ethnic minorities by 2050.
In the US, 95% of U.S. population growth is attributed to ethnic groups. In addition, demographers predict that the U.S. will be completely majority-minority by the 2040’s. What does that mean? Caucasians will then comprise 49.7 percent of the population in contrast to 24.6 percent for Hispanics, 13.1 percent for blacks, 7.9 percent for Asians, and 3.8 percent for multiracial populations.
The United States is transitioning from a nation whose majority population is white, or European-American, to a nation in which the majority of the population will soon be young people of color. This is already the case in many states around the U.S. including Hawaii, California, New Mexico and Washington DC.
In 2015, the percentage of people 25 and older who achieved a Bachelor’s degree or more was: Asian 53.9%; Non-Hispanic white 36.2%; White alone 32.8%; Black 22.5%; and Hispanic of any race 15.5%.
This indicates that in the future, we’ll have a more diverse workforce that may not have the same levels of education of our current workforce. How will that impact you?
Trend 4: Freelancing
Freelance workers work for themselves and bid for temporary jobs and projects with one or more employers. According to Forbes, currently, 57 million Americans (35% of the workforce) are considered Contingent, Temporary, Diversified, or Freelance Workers. This workforce contributes about $1 trillion annually to the economy through their freelance work.
There will be enormous growth as project needs will be fulfilled, which in turn will lead to the growth of technology and infrastructure. Is your organization preparing for freelancers appropriately?
How do these trend impact you?
Technology is never constant and keeps evolving. The push for workplace flexibility will only accelerate in the future, as employees demand that workplaces fit their lifestyle needs.
Organizations will need to get in front of these demographic trends to remain strong and successful throughout the next decade. The future belongs to organizations that are willing to adjust to rapidly changing realities. These workforce trends are coming faster than you think. It’s clear that to survive, let alone thrive, you need to prepare for these four trends. Will you be ready? Click here if you’d like our cheat sheet of best practices to prepare for the future workforce.
Managers, we want to hear from you! Tell me about your experience with managing Baby Boomers vs. Millennials. What has worked and not worked for you in managing a diverse workforce? What has been the role of women leaders in your organizational growth? Are freelancers on the rise in your organization?
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