How Does the Recession Impact Different Age Groups?

The recession has impacted our lives and businesses in various ways and few people – if any – have come through unscathed. While everyone has felt the weight of the recession, it has had different impacts on different age groups, according to a survey by the Pew Research Center. As companies slowly begin to rebuild and employers look for ways to improve employee engagement, understanding the recession’s impact on workers can give businesses insight for ways to help motivate employees who – like the companies they work for – are recovering from the financial and emotional strain of the recession.

The Research Center’s telephone survey of nearly 3,000 adults found that respondents ages 65 and older were less likely to report cutbacks on spending and losses in their retirement accounts than younger and middle-aged adults. In comparison, respondents ages 50 to 64 reported the economic downturn would make it more difficult to afford retirement as their investments took the greatest hit during the Wall Street’s meltdown. And, two-thirds of respondents between the ages of 50 to 64 said they lost money in 2008 and 2009 in mutual funds, stocks, and retirement accounts like a 401(k). Many employees between the ages of 50 to 64 are now facing postponement of a highly anticipated and well-earned retirement – a reality that could make each workday a little harder to wake up to.

Adults ages 18 to 49 have been among the hardest hit in the job market but remain moderately upbeat about their financial future when compared with adults ages 50 to 64, according to the survey. Younger generations will have more time before retirement to make up for financial losses in investments than older adults, which may account for some differences in outlook. Only 8% of adults ages 18 to 29 reported 20-40% losses in investments in 2008 to 2009 compared with 29% of adults ages 50 to 64.

This has been the first significant recession many younger generations have faced, and 68% of respondents ages 18 to 49 said they cut back on spending in the past year, while older generations have weathered previous economic downturns and may not have had to drastically change spending behaviors.

As you determine the best ways to increase employee engagement for your team, consider the impact the economic downturn has had on their lives as individuals. Demonstrate that you understand the pressures and strains they’ve faced in the past year. You’ve faced them too. Together, you’ve coped with job cuts, pay cuts, financial loss, and dwindling retirement funds. And, together you can rebuild.

Communicate with your team about where you stand as a company. If you instituted pay cuts, let them know when you expect to return to pre-recession pay rates and what it will take to get your company there. Consider creating or re-instating 401(k) matching programs for your employees. If your team has had to take on longer hours and extra work to make up for job cuts, reward them with some time off for a job well done. Show your employees you care about them; that work is not just business, it’s personal, and you will do what you can to help employees recover from the recession and together build a more profitable and successful company.