Skip to Content
  2. Mailing Lists
  3. in
  4. Demographic shifts in the workforce: A leader’s guide

Archives

The value of investing in employee health

Increase the performance of your AWS environment with New Relic

Demographic shifts in the workforce: A leader’s guide

Leading Off

Adapt and adjust ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
Leading Off

Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

Of late, leaders have paid much attention to Gen Z’s entrance into the workforce, seeking to learn more about their youngest employees’ attitudes and motivations. But the future of work is not just a youth movement. Massive demographic shifts, such as increasing longevity and tightening labor markets, are expected to result in a growing share of older employees in the workforce. To account for these shifts and maintain growth, organizations will need to develop new strategies to boost productivity and increase labor intensity. This week, we look at how leaders can address the challenges of an aging workforce as the population transforms.
An image linking to the web page “Dependency and depopulation? Confronting the consequences of a new demographic reality” on McKinsey.com.

With fertility rates falling and people living longer, the world’s population is growing older—and changing the face of the workforce. The share of older people in the workforce will likely increase as the traditional working-age population (ages 15 to 64) shrinks, according to a McKinsey Global Institute report from McKinsey’s Anu Madgavkar, Chris Bradley, Olivia White, Sven Smit, and coauthors. Their analysis found that the first wave of this demographic shift is already occurring in advanced economies and China, where the share of working-age people is predicted to drop to 59 percent in 2050, compared with 67 percent today. The authors say that organizations should find ways to tailor their work practices to gain a competitive advantage. “With more older people in their workforces, businesses will need to adapt career planning, reorganize teams, encourage lifelong learning, and expand and adjust retraining programs,” they observe.

72%
An image linking to the web page “The ‘evergreen economy’: Harnessing the power of healthy longevity” on McKinsey.com.

An aging society presents substantial opportunities for organizations, from both the workforce and consumer perspectives, in a phenomenon that London Business School economist Andrew J. Scott calls the “evergreen economy.” In an interview with the McKinsey Health Institute, Scott says leaders risk losing valuable talent if they focus too much on their younger workers. “I think firms are often blind to the experience and knowledge that older workers have,” he says. “It’s really important to think about how you [can] retain that human capital and find ways of doing so through more age-friendly jobs while also ensuring that the firm’s workforce can exploit the benefits of intergenerational diversity.” Scott also cautions companies not to assume that older consumers focus only on “care and decline” in their spending decisions. “That’s a belief hardwired into the concept of an aging society—that is to fundamentally misunderstand an enormous potential market with an ever-growing number of people who tend to have more money than younger people,” he says.
An image linking to the web page “Gen what? Debunking age-based myths about worker preferences” on McKinsey.com.

Gen Z workers love AI, while Gen Xers and baby boomers worry that the technology will take their jobs. Fair assumptions, right? Not according to a survey that found that a larger share of younger people fear the impact of AI at work, compared with their older peers who have already lived through tech-led transformations and changes in the workplace. This can serve as a good reminder for leaders to avoid buying into generational stereotypes. In a McKinsey survey of more than 30,000 global workers, senior partner Aaron De Smet and coauthors found that people’s expectations and needs at work are largely similar across age groups. Rather than focusing on broad generational labels, the authors say organizations should “take action on the factors that nearly all employees want—namely, compensation, career development, caring leadership, flexibility, and meaningful work—while appreciating the nuances of how they want them.”

Lead by supporting older workers.

— Edited by Eric Quiñones, senior editor, New York

Share these insights

Did you enjoy this newsletter? Forward it to colleagues and friends so they can subscribe too. Was this issue forwarded to you? Sign up for it and sample our 40+ other free email subscriptions here.

This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy.

You received this email because you subscribed to the Leading Off newsletter.

Manage subscriptions | Unsubscribe

Copyright © 2025 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007
by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:14 - 3 Feb 2025