Is your workplace facing a ‘Boomer bottleneck’?

Here’s an experiment for you: the next time you’re in a workplace, I want you scan your eyes subtly around the room. Is there anything unusual that you haven’t taken much notice of before? Because there’s something that’s going to be glaringly obvious once I point it out.

Australian workplaces, like the rest of our society, are ageing. Take a good look around many workplaces, and you’re likely to see more older workers continuing to work longer than the traditional retirement age than at any other time in history.

Like most long-term trends, it’s happened so gradually over the last few decades that we hardly noticed the change. People are working longer than ever, and it’s beginning to create problems. One of these is dubbed the “Boomer bottleneck”, and it’s something we need to talk about.

Over the last 20 years, the percentage of older Australians aged over 65 who are continuing to work has more than doubled from 6.1 per cent in 2001 to 15 per cent in 2021, according to data from the Australian Bureau of Statistics.

When you break it down by gender, it equates to 11 per cent of older women and 19 per cent of older men who are working past the age we have generally associated with retirement, or roughly 620,000 Australians.

There are many reasons behind this, almost as many as there are different circumstances. Some proudly choose to remain employed for as long as they can because they enjoy the work, community, income and meaning that it brings to their lives.

Crucially, this is not about managing people out of the workplace, or forcing rushed retirements to clear the decks.

Others are unable to afford the reality of unemployment or retirement, and need to keep working to help pay their bills. Some are even caught out by changing eligibility to access their superannuation and age pension, and are counting down their final working days.

Whatever the reasons, the impact is a “bottleneck” in many workplaces that’s having unintended consequences. Younger workers are getting frustrated that they’re having to wait longer at more junior positions because the pipeline of roles is not opening as quickly as it happened in the past.

One of the most obvious effects of this was described in a 2024 research paper by economists Nicola Bianchi and Matteo Paradisi, where they analysed the age pay gap in several high-income countries, including Australia.

They identified a growing wage disparity between older and younger workers, and found that the increasing supply of older workers who were staying in the workforce longer was restricting younger workers’ access to higher-paying roles. This only widened the pay gap in favour of the more senior employees.

Of course, there are many benefits to people staying in the workforce for longer, like the shared and unique knowledge that comes from multi-generational workplaces, and not losing decades of experience when they walk out the door. Having older people in the workplace can be a genuine joy, but we need to figure out how to make it work for everyone.

Unfortunately, solutions are complex, as it needs to be addressed from all angles. We need to understand all the reasons why many Australians can’t retire even if they want to, as well as providing avenues for those who want to keep working so they can contribute meaningfully, while opening up new pathways for others.

Crucially, this is not about managing people out of the workplace, or forcing rushed retirements to clear the decks. For many people in their late 60s and 70s, work is a core part of their identity and daily structure, and we should welcome their experienced input into our workplaces.

But if we’re going to have a discussion about this growing issue, we need to be able to hold on to two truths at the same time: younger workers need room to move up, and we can’t simply push older workers out of the way to get there.

A recent synthesis of retirement studies published in Social Science and Medicine found that how someone retires has an important impact on their health. Voluntary retirement at a time of their choosing was associated with better or stable mental health, whole involuntary or forced retirement was linked with poorer wellbeing.

The complications of an ageing population is a slow-moving trend we’ve been watching for decades. It’s not the fault of any one generation that we’re in this position, but the first step to figuring out solutions that will benefit both older and younger workers is bringing the facts out into the open so we can have an honest conversation.

Tim Duggan is author of Work Backwards: The Revolutionary Method to Work Smarter and Live Better. He writes a regular newsletter at timduggan.substack.com.

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