Technological Change Could Push More than 2.4 Million Older Workers in the US to Retire Early

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Dec 07, 2023, 09:00 ET

A new survey from Multiverse also reveals that 41% of these workers would be willing to remain active in the labor market if provided with better access to training

NEW YORK, Dec. 7, 2023 /PRNewswire/ -- As a growing number of older workers continue to exit the labor market, pre-existing critical skills gaps threaten to hurt businesses in need of talent. New survey data from Multiverse released today finds that more than 2.4 million workers over 50 in the US are thinking about leaving the labor market early because they can't keep up with the skills demanded of the modern workplace – necessitating urgent efforts to enhance retention strategies and ensure skills continuity within the workforce.

Findings from Multiverse's report, "The Great Unretirement: Keeping workers over 50 in the labor market," highlight concerns around the so-called "silver tsunami," revealing that nearly two-thirds (62%) of workers in the US nearing retirement age have considered retiring early. For 13%, the struggle to keep up with skills demands has made them consider dropping out of the active labor force, which corresponds to approximately 5.8 million Americans nationwide.

The Impact of Early Retirement on the Economy
Early retirement impacts businesses, the economy, and society as a whole, with the most notable effect being worker shortages across key sectors as fewer workers are available. These labor shortages can cause inflationary pressures stemming from a reduced pool of workers, which has the potential to increase the cost of producing goods and services. Additionally, overall productivity levels and the volume of goods and services that a smaller workforce produces can limit economic growth.

"As more individuals over the age of 50 trend toward early retirement, businesses and society lose out on significant knowledge and skills that contribute to the workforce," said Gary Eimerman, Chief Learning Officer of Multiverse. "Our recent survey shows that despite this trend, there are opportunities to retain workers over the age of 50, and even tempt many back from retirement if employers are willing to provide training to help close critical skills gaps."

As business leaders look to the future, it's clear they're concerned about the impact of high turnover and deepening skills gaps across industries, which will only be increased by early retirement. Multiverse's recent survey of business leaders pointed to learning and development as a core strategic priority to help combat high turnover, with the majority of business leaders planning to invest in reskilling, upskilling, and other training programs.

Digital Transformation and the Skills Challenge for Early Retirees
With 64% of respondents saying that the pace of digital transformation is greater now than ever before, it's easy to see that technology is rapidly changing the workforce. For individuals over the age of 50, the impact of these technological changes is more acute. In fact, many individuals approaching retirement say keeping up with new technology has an impact on their health and well-being, with over one in eight (14%) citing digital transformation as a cause of anxiety.

Preparing workers of all ages to take on digital transformation is crucial to businesses' success, yet 57% of respondents said they feel younger workers are prioritized over older workers when it comes to learning and development. Exacerbating the problem for those workers is the issue of support in developing digital skills, which is inconsistent for individuals over the age of 50 – with a quarter (25%) saying their employer has not helped them in this area. Among early retirees, this grows to 35% reporting that their former employer insufficiently supported them.

Additionally, almost half (44%) of respondents say they haven't taken part in any training course or program at work in at least a year. For one in five (20%), this increases to at least three years. When asked why they haven't taken part in workplace training, half (48%) said their employers simply did not provide such opportunities.

The artificial intelligence (AI) revolution is also causing challenges for workers over the age of 50, with over a third (39%) predicting that the adoption of AI by businesses will have some form of negative impact on them and their job security, and just 16% viewing AI as something that will help them in the workplace. A majority of business leaders (72%) recently reported they are likely to invest in AI skills programs to help reskill current employees of all ages into jobs of the future – which could be valuable to older workers seeking the skills to stay active in the labor market.

Regaining and Retaining Workers Over the Age of 50 through Training and Development
With an already tight labor market, companies must offer training programs, such as apprenticeships, to help their employees develop new skills. In fact, a recent survey from Multiverse and the Burning Glass Institute found that the apprenticeship model has tremendous opportunity for expansion and growth, creating ways for older workers to stay active in the workforce and access higher wages.

If given training and skill development opportunities, many respondents said they would consider changing their mind on their retirement trajectory:

Out of older workers intending to retire in the next 12 months, 16% said they would change their minds if their employer created real opportunities for them to learn and develop new skills.
Out of those intending to leave their current job soon, four in ten (41%) say that they would be willing to stay if their employer offered them the opportunity to train and develop new skills.
- On average, this group thinks that fully funded training opportunities would motivate them to stay in their current job for another six years.
A third of early retirees (35%) say they would be interested in coming back to work if an employer offered them the opportunity to train and develop new skills.

"The rapid pace of technological change in the workforce has led to both increased skills gaps and an increase in employees over the age of 50 leaving the labor market," said Eimerman. "To counteract this, employers and the government must commit to investing in the ongoing learning of all workers, not just those at the start of their careers. When we prioritize lifelong learning, we are able to boost job satisfaction for millions of workers and fill growing digital skills gaps – thus creating a great opportunity to strengthen the US labor force."

Methodology
On behalf of Multiverse, Stack Data Strategy conducted a survey of 3,015 workers between the ages of 50 and 65 across the US and the UK between September 25 and October 4, 2023. Of those surveyed, 1,515 of them were located in the US. The results of the analysis mentioned in this report are weighted by age, gender, region, and level of educational attainment to ensure that these samples are representative of the populations of people between 50 and 65 in the two countries.

All statistics in this release refer to the survey data found in the US portion of this study.

About Multiverse
Multiverse is on a mission to create a diverse group of future leaders by building an outstanding alternative to college and corporate training. They offer apprenticeships to a diverse pool of workers including those looking to reskill. Multiverse helps 1,000 organizations to embrace digital transformation, close skills gaps and develop a diverse talent pipeline. Apprentices benefit from individualized coaching, applied learning, and a community of social, networking and leadership opportunities to exceed the best of the university experience.

Founded in the UK in 2016, Multiverse launched in the US in January 2021.

For more information, visit www.multiverse.io.

SOURCE Multiverse