Magazine article Risk Management

Working with Father Time

Magazine article Risk Management

Working with Father Time

Article excerpt

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Scientific advances and demographic shifts are allowing people to live--and work--longer than ever before. How will employers adapt to meet the needs of an aging workforce?

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The race is on to conquer death.

Silicon Valley billionaires are leading the way by plowing back profits from their information technology businesses into anti-aging research. In September 2013, for example, Google launched Calico--the California Life Company-focusing on "health and wellbeing, and in particular the challenge of aging and associated diseases." Google CEO Larry Page boasted that the company could use cutting-edge biotechnology to achieve "moon shot"-style success in the fight against old age.

Calico and many other billionaire-backed health technology start-ups have been inspired by recent scientific advances. Rapamycin, for example, is one of many longevity drugs currently in clinical trials. Normally used to aid organ transplants and treat rare cancers, it has also been shown to extend the life of mice by 15%--the longest extension to life so far achieved with a drug. It also protected the mice against diseases associated with aging, including cancer and neuro-degeneration.

Technology entrepreneurs believe that harnessing such research with intensive computing techniques will produce a significant change in life expectancy. II successful, they could rapidly accelerate the global trend for longer life. Over the past four decades, life expectancy around the world has already risen dramatically--by 11 years for men and 12 years for women, according a 2012 study published in the Lancet medical journal. Even with today's falling birth rates, the proportion of the population 65 or over will increase. In Japan, for example, 22% of the population are 65 or over, a figure that is expected to nearly double, reaching 40% by 2060.

WORKING FOR LONGER

"Japan may be at the forefront of these developments, but what is happening there will affect all developed countries," said Dianah Worman, research and policy adviser on diversity at the United Kingdom's CIPD, the professional body for human resources and people development. "It's impossible to believe you can support a growing aging population on the income contributed by a shrinking number of younger people, so something has to change. People will have to work for longer."

That trend has already begun. In 2014, Gallup found the actual average age of retirement in the United States had risen from 59 years of age in 2004 to 62. The U.S. government has passed laws that could accelerate this shift by raising the age at which citizens can receive full retirement benefits from 65 to 66, with further planned increases to 67 and beyond for those born in 1960 and later.

Despite these changes, employers remain stuck in the past, planning for the workforce of yesterday, which was younger and likely to retire before the age of 60, she said. As more people work longer, businesses will need to alter the types of skills, talent, remuneration packages and other benefits they offer.

"Too few businesses are thinking and behaving strategically to manage these issues," Worman said. "They need to stop being reactive and think about how they will keep the momentum going in their businesses as the skill sets of their staff continue to change."

HIGH SOCIAL COST

Altering employer attitudes to the coming demographic shift will likely be a major challenge. U.S. academic institutions are among the first organizations to see the effect of longer working lives biting into existing employment structures. …

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