As the economy faces its first real recession in over a decade, it can be valuable to have employees who have seen it all before.
When opening an office in a new country, it is often helpful to have an executive who has lived there. By the same token, now that the economy is facing its first real recession in over a decade, it can be valuable to have employees who have seen it all before. For companies that seek not to repeat the mistakes of the past, the fact that the active population in the West is already combing gray hairs may not be a bad thing in 2023.
It’s no secret that the workforce is getting older. During each month of 2023, 180,000 people will turn 65, the highest number on record, according to a study by the St. Louis Federal Reserve. People also work longer. The share of Europeans over 55 with a job rose to 20% in 2019, from 12% in 2014, according to official data. Retailer Target lifted mandatory retirement at age 65 last September; Boeing raised the maximum age at which you can work for them to 70 in 2021.
The CEOs are also accumulating more years. The median age for those who currently hold this position is 55, ten years older than the median in 2005, according to Crist Kolder Associates. In 2022, Walt Disney and Starbucks called back their retired bosses, Bob Iger and Howard Schultz, ages 69 and 71, respectively. Brian Moynihan, Chairman and CEO of Bank of America, says he expects to remain at the helm of the US giant until 2030, by which time he would be 70 years old and have been in the role for 20 years.
There is a fine line between valuing experience and cementing the privileges of those born in the baby boom. But the innovative newcomers did pretty poorly in 2022. The quintessential example of exuberance over experience is probably 30-year-old Sam Bankman-Fried, whose FTX cryptocurrency exchange crashed precipitously in November, leaving thousands unaccounted for. of millions of money from clients and funders like Sequoia Capital in a precarious situation. Theranos founder Elizabeth Holmes was sentenced to more than 11 years in prison, while Meta Platforms META.O, led by another millennialMark Zuckerberg, ripped off more than $582 billion of shareholder value.
In 2023, the experience should reach a peak valuation with the end of low inflation and bull markets. Money markets forecast US rates at 5% for the summer. The last time they reached that level, we were unaware of the term fintech and one-third of the current US workforce was 19 or younger. As a result, Wall Street firms may temper their appetite for digital natives, and bosses will find greater tolerance among shareholders for their tenure. The other side of the coin is that as the market changes, young entrepreneurs could find themselves pushed back, at least for a while. Financial markets are always looking for the latest thing, but for now, gray is beautiful.
