No, Millennials will NOT be 75% of the Workforce in 2025 (or ever)!

How often have you seen or heard the following statement without giving it a second thought? “In 2025, Millennials will make up 75% of the workforce.”

I’ve heard it mentioned many, many times over recent years and I must confess that until a few weeks ago, I’d never questioned it. 75% seemed to have established itself as the global guide to base future workforce decisions on.

It was when I was reading a report on the topic that it suddenly struck me that this is very unlikely to be true. How can one generation be made up of so many “constituents” that it leaves just 25% for the remaining three generations currently employed around the world? I was intrigued and decided to do a little fact finding.

As it turns out, this estimation is quite far off the mark. Not even in 2030 will the workforce consist of 75% Millennials. And not in 2025 either.

How did we get it so wrong?

If you search for “millennials and 75% and 2025 and workforce” you’ll see 750,000 hits: articles, research reports, conference decks and company documents. Like with many much-quoted statistics over time, it all stems back to a single source, often marketing driven.

In April 2011, the Business Professional Women (BPW) Foundation published their Gen Y Women in the Workplace study which claimed that by 2025, Generation Y (or Millennials) will make up roughly 75% of the world’s workforce(1). The study referenced the US Department of Labor (2009) but wasn’t specific about the data source.

Later that year, the BPW report was picked up by several magazines like Forbes, Time and Mashable who used the quote in articles. And from then it snowballed: the magic number was quoted by advisors from PWC (2012) to Deloitte (2014) and from Brookings (2014) to EY (2015), the World Economic Forum (2015) and Accenture (2015). Even SHRM (2013) assumed it was true.

Based on these authorities, HCM vendors like Workday (2016), Ultimate (2016), Successfactors (2017) and Oracle (2018) took the number to be a scientific finding. 

It wasn’t restricted to workforce researchers: commercial firms ran with it too. Visa, CBRE, Coca Cola, AmericanExpress, Salesforce and many others adopted the statement and more importantly, based business decisions on it. It still continues: Allianz mentions it in the 2019 Trend Compass(2).

And so, what was once a study gradually became the authoritative source on which planning for the future of work is being based.

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Why are we so fascinated with Millennials?

Millennials were born between 1981 and 1996, during a time when the world enjoyed relative peace and saw increasing prosperity. They are often considered to be a tech-literate group, who expect to be connected anywhere, at any time. And while they were born after the invention of the internet, the iPhone wasn’t introduced until 2007 and smartphones only became mainstream with the introduction of iPhone 4 in 2010. These technologies reached them in their teens, and they adopted them at a rapid pace, but they weren’t born with technology at their fingertips. That honor goes to their successors, Generation Z.

What Millennials are bringing to the workplace are attitudes shaped by the digital revolution. This means they have a different outlook to the generations before them, and far lower acceptance levels for the status quo, used as they are to Apps that update several times a year.

The state of IT in most workplaces frustrates them because their personal technology is much more advanced and powerful. Due to the convergence of social, mobile and cloud, they are used to sharing, transparency, and being instantly connected with people regardless of location. They hold a dissatisfaction with corporate systems and traditional hierarchies. While these frustrations are by no means unique to Millennials, it is this generation that is speaking out about the challenges these present and expecting to see quick fixes.

Let’s start smart

To compare apples to apples, in this article I will use the Generation definitions of Pew Research Center:

The population numbers come from the United Nations(3). The UN supplies population data and projections in 5-year age ranges. Where the Pew definition was not in sync with the UN data, we’ve spread the 5-year total evenly over 5 years and assigned the corresponding year(s) to the generation. We’ve used the UN’s medium variant edition.

The data used in this article is based on the working age population. This is defined as the total population that is considered able and likely to work based on the number of people in an age range. It provides an estimate of the total number of workers within a country. This number does not take into account unemployment, disabilities, illness and other factors preventing people from joining the workforce, which usually affect generations differently (4).

How many people are actually part of the workforce is determined by labor force participation. In other words: these people have a job. The ILO provides these numbers for the global workforce (5) and uses the same age brackets as the UN.

While labor laws vary over the globe, we’ve assumed that the working population is between 20 and 65 years old. A recent OECD report (6) looked at the effective retirement age: the age at which people actually retire. In 2017, this stood at 65.3 for men and 63.7 for women and the number is trending upwards because more countries are raising the statutory retirement age to 67. This is not yet reflected in the ILO projections: labor participation after 65 years of age doesn’t materially trend upwards.

People stay longer in the workforce for a variety of reasons. As people grow older and enjoy relatively good health, work gives them an income and purpose and they see no need to retire. For many more, it’s out of necessity. Countries are raising the legal retirement age, the age when the state pension kicks in. Low interest rates and the financial crisis have reduced retirement savings and people can’t afford an early retirement anymore.

The 2025 global workforce

The following table displays the global working age population in millions based on the UN data. The second row shows the global labor force participation. You’ll notice that the total number of people between 20-65 continues to grow steadily as does the labor force:

Applying the generational definitions against the total Working Age population leads to the following overview:

The surprising observation is that already in 2020, Millennials will reach peak presence being 41.4% of the population. In subsequent years this percentage goes down as Generation Z, the next sizeable generation, enters their 20s. This is true for all regions, except one.

In Europe, Millennials will be 34,1% of the population in 2020, and grow to 35.9% in 2025, and to 36,9% in 20230. Europe is also the only region where the total population is shrinking between 2020 and 2030, which explains why the percentage of Millennials continues to rise.

The same trend is reflected in the global Labor Force Participation: already in 2020, Millennials reach their peak presence being 43,3% of the labor force.

And what about the infamous year 2025? It’s clear that while Millennials will be the largest group at work, they will never represent 75% of the workforce by themselves. They’ll also not reach 50% unless a considerable portion of other age groups decides to not work anymore. And under current economic and financial conditions, that seems unlikely. In fact, the opposite is likely to happen as governments raise the retirement age or workers older than 65 go on partial retirement instead of full.

There’s one exception: Africa

Most population pyramids look more like a cone: these stationary pyramids display equal percentages across lower age brackets and taper off towards the top.

When you compare all continents around the globe, Africa is the only one where the population pyramid is an actual pyramid, starting from a broad base and tapering off into a narrow point. It’s an expansive pyramid: Africa has a large, young workforce. Africa is the only continent where Millennials will be over 50% of the population in 2020.

However, in the following years, the global trend applies as the next generation enters the workforce. Despite a fast-growing population, the overall percentage of Millennials will fall at an even faster rate than in other regions and by 2030, Generation Z will surpass the Millennials and become the major workforce contingent. Even the region with the largest Millennial population will never reach 75% of the workforce.

Let’s run a few scenarios

Is there no circumstance under which Millennials will make up 75% of the workforce? I tested a few scenarios.

If we ignore the Pew definitions and combine Millennials and Generation Z into one group, they will make up 63,8% of the labor force in 2025. By 2030, they will be 74,7%. It’s almost 75%, but by then they cover the age ranges between 20-49, historically the ages with the highest labor participation (usually 80%+) due to financial obligations (mortgage, children etc). In the years after 2030, a new Generational group (7) will enter the workforce which lowers the percentage. It also assumes that the retirement age doesn’t rise.

Or suppose in 2025, labor force participation of all other 3 generations would be halved. That would increase the % of Millennials to 60,2% of the global labor force. Or maybe by 2025, Generation X and the Baby Boomers decide they’ve had enough, and they stop working altogether (meaning no one older than 45 works), leaving only Millennials and Generation Z in the workforce: that scenario results in a 67,6% to 32,4% ratio.

We’ve not found one credible scenario in which Millennials account for 75% of the workforce.

Why did no one do some fact-checking?

Oh, but someone did! Back in 2014, the WSJ posted an article How to tell if a ‘Fact’ about Millennials isn’t Actually a Fact written by Josh Zumbrun. It’s behind their paywall, so maybe that’s why it didn’t make an impact. It might also be that we liked the 75% too much.

The article contains the following chart:

When Zumbrun researched the US workforce, he concluded that in 2025 Millennials will make up a little over 40% of the labor force. This is in line with my own findings on the global workforce (43,1%) and Northern America (40,4%). Note that this chart uses a broader definition and includes the 25-29 age group, which Pew considers part of Generation Z. In the second part of the article Zumbrun busts some other Millennial myths, and addresses the dangers of extrapolating data, so it’s worth a read.

Now what? What does it mean for me?

You can easily download the UN database, look at the working age population of the countries in which you operate and adjust them with the ILO participation rates. You can then map your own workforce data to the country data to better understand your workforce – if you haven’t already done this.

Depending on the industry you are in, and the work that people do (mental vs physical) the generational spread of your workforce might or might not reflect the overall data. That’s okay if you can explain the reason why. At the same time, it’s a good moment to reflect on the (lack of) generational diversity of your workforce and see if you need to do more to attract certain age groups.

You should also use this data to plan ahead – while you might assume in future years you can rely on hiring workers from certain age groups, based on the location this might not be the case. Europe and Northern America won’t see the population growth of other regions, and that has consequences for the available labor pool.

I’ve noticed that I am perhaps not alone in my awakening to the possibility that we’re basing the future on a fact that just isn’t so. A few recent ads adjusted the 75% number, using the 50% mark when profiling the workforce in 2025. Armed with the data from this article, you can safely conclude that number is still an exaggeration. It’s much closer to 40%.

Articles also suggest that Millennials will forever change the workplace as we know it. But Generation X did so before them by introducing work/life balance and before this, we had the Baby Boomers and a drive for equality in the workplace. Those starting high school today will bring their own disruptions. It is almost a rite of passage.

It's about diversity and options

Most studies that make claims about Millennials fail to do one thing: contrast it to the opinions of the other generations. Stating 50% of Millennials want to work for an ethical business or 60% of them believe management is the barrier to innovation implies that other generations see this differently. That is questionable, especially when you can’t back it up with facts. Very few studies have done that, and they usually draw their conclusions based on a narrow set of participants in one country.

I’ve said for a long time that the differences within a generation can be far larger than the differences between them. While there are similar characteristics within a generation because of shared experiences (cultural, economic, political etc) during their “coming of age” years, your personality plays a large role in your work attitude. Everyone is different. Everyone’s circumstances are different. One size never fits all.

The research is very clear on the benefits of employing a diverse workforce on various criteria8 . It’s much more important to understand who is in your workforce, what they consider valuable and make that available to all in a flexible manner. Treat people as individuals and give them choices that resonate with their lifestyle and outlook. Personalizing the workforce experience will help improve morale and position you as an employer of choice.  

And next time you hear someone quote a statistic, take a moment to reflect before you share or tweet it. There’s a chance it isn’t true.

PS: Curious about the graph for your region? I’ve created a supporting article with regional graphs, additional links and data points.

Anita Lettink is SVP Strategy & Alliances at NGA Human Resources. You can connect with me on Twitter: @let_anita, via www.anitalettink.com or here on Linkedin. I write a monthly newsletter on the future of work.

References:

1. https://bpwfoundation.org/ is under construction but the report is available at the SHRM website. Later articles quote the source as the US Bureau of Labor Statistics, but none link to the specific study. I have been unable to find one.
2. Although the examples are in English, the support document to this article provides links to publications around the world: it has turned into a global misconception.
3. https://population.un.org/wpp/Download/Standard/Population/ Department of Economic and Social Affairs, Population Division. World Population Prospects 2019 Revision
4. The OECD provides unemployment statistics for the following age groups: 15-24, 25-54, 55-64 but not in 5- year age brackets. Total OECD 2018 unemployment rate is 5,3%, while youth (15-24) unemployment rate is 11,1%.
5. Labour force participation rate by sex and age -- ILO modelled estimates, July 2018 (%): Annual
6. https://www.oecd.org/els/working-better-with-age-c4d4f66a-en.htm OECD “Working Better with Age” – August 2019
7. This generation is sometimes referred to as ‘Alpha’ but no official consensus exists https://mccrindle.com.au/insights/blogarchive/gen-z-and-gen-alpha-infographic-update/