The multi-generational workforce is becoming increasingly separated

Longer-lived boomers continue to make up the largest part of the labor force even as the cohort of young workers continues to grows, and the shifting proportions will create a dilemma for employers: how to provide benefits for two groups of employees widely separated in age and needs?

According to a brief from the Employee Benefit Research Institute, the proportion of workers aged 55 and over is increasing. The rate of participation in the labor force for Americans aged 55 and older rose from 1991 to 2012, after which it leveled off—but the labor force participation for the oldest Americans–those 65 or older–had the biggest percentage increases since 1991, even after the after-2012 leveling off.

In fact, the report finds that members of the boomer generation, living longer than their predecessors and the last of whom are only now reaching their mid-50s, are having a “seismic effect” on the labor force.

Since 2007, according to EBRI author Craig Copeland, the part of the overall labor force aged 55 or older has continued to increase, although that’s due to more boomers falling into that age group rather than to a rising percentage of older workers continuing to work. “More older workers in the labor force is a result, most recently, of the larger size of the generation reaching ages 55 or old as well as the increased longevity of those that have already reached those ages,” Copeland writes.

But now younger workers are rising in numbers, as well. In fact, writes Copeland, the rate of increase of the part of the labor force aged 25–34 is likely to accelerate as boomers leave the labor force. And as that happens, employers will be left with a workforce consisting of considerably older and considerably younger workers, with not all that many left in between.

With one part of the labor force looking for such benefits as early childcare and more personalized voluntary benefits, while the other may be seeking comprehensive health care and retirement plans, Copeland notes, “Many employers are likely to be faced with a bimodal labor force distribution across the ages—larger numbers of both older and younger workers with fewer numbers of workers at ages in between—which presents different (and possibly incompatible) compensation and benefit challenges.”

Employers will have to juggle the needs of the older workers and the younger, since millennials and GenZ workers have very different needs and expectations regarding both pay and benefits than do older workers. Not only that, but the concentration of women in the workplace—at 46.9 percent—further contributes to a need for employers to be more alert to the types of benefits their workers will be looking for.