Indeed chief economist warns of ‘great mismatch’ as generational workforce imbalance deepens

(SeaPRwire) –   While workplace tensions over return-to-office policies, AI concerns, and digital communication norms dominate headlines, a deeper, quieter challenge is emerging—one tied not to technology or corporate rules, but to shifting demographics. The U.S. population is aging quickly, and there are not enough younger workers to replace retiring employees in key roles. Svenja Gudell, chief economist at Indeed, warns that this generational gap is placing increasing strain on the labor market.

“We’re entering a new phase of a great mismatch,” Gudell said during a panel at the Workplace Innovation Summit. “There will be workers in roles where they’re no longer needed, while critical positions go unfilled. We’ll have to reassign many jobs to different people—and that transition will come with some disruption.”

Gudell notes that this trend is not unique to the U.S.; most industrialized nations are experiencing similar shifts. By 2031, workers aged 55 and older will comprise over 25% of the workforce in G7 countries—including the U.S., Canada, France, and Italy—a roughly 10-point increase from 2011, according to Bain analysis. As baby boomers, who currently represent 15% of the American workforce, continue retiring, younger generations are unlikely to fill the resulting vacancies. Compounding the issue, Gen Z and millennial workers often pursue career paths different from those of previous generations, leading to talent shortages in sectors such as skilled trades, manufacturing, and healthcare.

“It’s crucial to recognize that major forces beyond AI are shaping today’s labor landscape,” Gudell added. “Demographic change is one of the most pressing, and it’s already here.”

Becky Schmitt, chief people officer at PepsiCo, echoes this concern, pointing to a significant labor gap across industries. She argues that AI could help mitigate the shortfall by automating tasks in roles that are becoming harder to fill due to shifting worker preferences. Schmitt also notes that younger workers’ career aspirations are diverging globally—not just in the U.S.

“Even in countries with large youth populations, we’re seeing a preference for roles like social media influencing over traditional jobs such as sales,” Schmitt said during the summit panel. “This misalignment in interests means companies must become more operationally efficient to adapt.”

The growing great mismatch in the global workforce

The U.S. and numerous developed nations face a shared challenge: aging populations are expanding, while younger generations are smaller and having fewer children.

Workers aged 55 and older have been the fastest-growing segment of the labor force for more than 20 years, making up nearly 25% of the U.S. workforce in 2022, per U.S. Census Bureau data. Certain industries are already feeling the pinch, struggling to recruit younger talent; in 2022, employees 55 and older comprised 80% of the utilities sector, and accounted for 40% of headcounts in manufacturing and wholesale trade.

For the first time in modern history, people aged 65 and older will soon outnumber 16-year-olds in the workforce, according to a 2024 Lightcast report. OECD research further projects that the working-age population (20 to 64 years old) will shrink across many developed countries in the coming decades. By 2060, this demographic will decline by 30% in a quarter of OECD member nations—including Canada, Colombia, South Korea, and Spain.