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Older Employees Breathe New Life Into Europe’s Labor Market

When entrepreneur Kim Diaz opened a bar-restaurant in Barcelona four years ago, he adopted a strict hiring policy: only workers aged 50 and above.

The bet has paid off. Older staff are punctual, polite and hardworking, the 51-year-old said, and their professionalism has proven a hit with younger customers.

“We’re talking about waiters who enjoy their jobs, remember exactly how you take your coffee in the morning, how you want your beer without a head and your Coke with just one ice cube. These are values that we’ve been losing in hospitality recently,” Mr. Diaz said. His average employee is 54.

Across a rapidly aging Europe, employers are finding ways to keep older staff on the job for longer, or adding new ones.

Workers aged 55-74 accounted for 85% of employment growth in the eurozone between 2012 and 2018, according to the Organization for Economic Cooperation and Development, a think tank for mostly rich countries. Around 10 million jobs were created during that period.

The trend upends the usual thinking on labor markets. Normally, it is cheaper and more-flexible younger workers that are coveted. But the large and highly educated baby-boomer generation has accumulated skills that are tough to replace, employers and economists say.

Older staff are punctual, polite and hardworking.

The shift toward older workers comes as Europe approaches a demographic cliff. Sixteen percent of the working-age population of the region’s currency union, aged 15-64, will be lost by 2050 relative to the region’s total population, according to a paper published in June by the European Central Bank. That is double the share of the U.S. working-age population that will be lost over the period.

To stave off demographic decline, European governments and businesses are hustling to boost employment and productivity among older workers.

Mindful of a rapidly aging workforce, executives at German auto maker BMW AG tried an experiment at a factory in Bavaria a few years ago. They staffed an assembly line exclusively with older workers, with an average age approaching 50. By making small tweaks—ergonomic chairs, less-rigid wooden floors, lenses to magnify smaller parts—BMW transformed the line into one of the factory’s most efficient. The total outlay: around €40,000.