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Benefits April 1, 2026
A Changing Workforce: Employers Rethink Benefits for a New Era
Fewer workers, older employees and widening skill gaps are forcing companies to fundamentally redefine what it means to support employees.
Reported by
James Van Bramer
The American workforce is undergoing a quiet, but profound, transformation.
Workers are getting older. Fewer people are participating in the labor force. And across industries, employers are struggling to find workers with the right skills. Artificial intelligence could easily further transform the workforce in time. Together, these forces are reshaping not only hiring practices, but the benefits employers offer.
The changes are already reflected in data. Employers worldwide increasingly expect talent shortages to worsen in the coming years, with 42% predicting declining talent availability through 2030, according to a recent global survey by the World Economic Forum.
From an aging workforce to skill gaps to growing caregiving needs, the workforce is experiencing a sea change that many say employers simply cannot ignore. While employer-provided benefits are meant to align with the demographics of respective workforces, those changes have increased the potential for employer benefits to change. They could even result in retirement plans offered to all employees—currently, 42% of workers lack access.
“Employers trying to meet the changing workforce could do more with financial wellness, which applies regardless of age,” says David John, a senior strategic policy adviser at the AARP Public Policy Institute. “But it’s especially useful for older employees. So as far as retirement benefits, the first thing is to have a retirement plan.”
Aging Workforce
Population aging is accelerating across advanced economies. By 2050, there will be roughly 52 people age 65 and older for every 100 working-age adults, up sharply from 33 per 100 today, according to the Organization for Economic Co-operation and Development.
In the U.S., that shift is already affecting workplaces. Older employees are remaining on the job longer, often out of financial necessity or uncertainty about their ability to afford retirement. For example, 19.5% of those age 65 or older participated in the workforce in 2024, compared with 10.8% in 1985, according to the U.S. Bureau of Labor Statistics. At the same time, employers face lower labor force participation, particularly among prime-age men and women balancing caregiving responsibilities.
These trends are pushing companies to rethink traditional career arcs.
“They’re thinking much more about how to support that transition into retirement,” says Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute, noting that workers increasingly want access to phased retirement options and steady income streams, rather than abrupt exits.
Employers are also experimenting with new offerings, including: flexible withdrawal options from retirement accounts, annuity-like income products, and financial planning tools to help workers navigate longer careers and retirements.
Alicia Munnell, the founder of and current senior adviser at the Boston College Center for Retirement Research, is skeptical of how far employers would go to accommodate older workers and of whether older employees truly need added perks. She says delaying retirement is typically a winning strategy for all workers, but doing so is a decision most available to already privileged workers.
The Caregiving Crunch
That same aging population is reshaping the workforce from another direction: caregiving.
As Americans live longer, more workers—including those in their 30s and 40s, and increasingly those in their 20s as families wait longer to have kids—are caring for aging parents or relatives. That burden has become a major factor in labor force participation, especially for women.
Employers are beginning to respond. Some companies that once focused on child care benefits are now expanding support to include elder care services, referrals and subsidies.
“There’s more focus on helping employees deal with caregiving—not just for children, but for older family members,” Copeland says.
Those benefits include flexible working arrangements and more paid leave. However, many workers ultimately leave the workforce to be caregivers.
Recent legislation seeks to address the shortfall in retirement saving created by periods spent out of the workforce. The Improving Retirement Security for Family Caregivers Act and the Catching Up Family Caregivers Act were introduced in the last Congress by Senator Susan Collins, R-Maine, would allow non-earning caregivers to contribute to Roth individual retirement accounts and to make extra catch-up contributions once they return to work. Though the bill did not advance in the last Congress, Collins said she planned to reintroduce the bill during the current session.
Skill Gaps Deepen the Challenge
Even as the workforce ages and participation slows, employers face another problem: a mismatch between available workers and needed skills. Skill gaps are now the leading barrier to business transformation, cited by 63% of employers, according to the World Economic Forum.
In the U.S., the issue is particularly acute in sectors such as manufacturing, cybersecurity and artificial intelligence, where demand for skilled workers is surging. As many as three-quarters of companies report difficulty finding qualified talent.
The result is a labor market that is both tight and inefficient, with job openings unfilled even as millions remain out of work.
To adapt, companies are increasingly investing in training, rather than relying solely on hiring. “Upskilling” existing workers—retraining them—has emerged as the most common workforce strategy, with 85% of employers planning to adopt it, according to the OECD.
A New Benefits Playbook
The converging trends of aging workers, caregiving pressures and skill shortages are forcing employers to rethink benefits as a strategic tool, not just a perk. Financial wellness programs are expanding to include not only retirement planning, but also emergency savings and debt management, reflecting growing financial stress across income levels.
“People are looking for both long-term retirement help and immediate financial stability,” John says, noting that financial stress can directly affect worker productivity.
Meanwhile, retirement benefits themselves are evolving. Roughly half of American workers still lack access to a formal retirement plan, prompting a wave of mandatory state-sponsored programs aimed at expanding coverage. The plans require employers in at least 15 states to offer employees access to the state-run program or to provide a company retirement plan. There are similar programs in 20 states that have accumulated $2.96 billion in retirement savings, 382,045 registered employers and nearly 1.2 million funded accounts.
But balancing the needs of a multigenerational workforce remains a challenge. Companies must simultaneously support older workers planning retirement; mid-career employees juggling caregiving; and younger workers focused on immediate financial concerns.
“There isn’t a one-size-fits-all solution anymore,” John says.
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