It is widely recognised that the age structure of the Portuguese population has undergone significant changes in recent decades, as a result of the increase in average life expectancy and decrease in the birth rate. In the three-year period from 2021 to 2023, Portugal’s average life expectancy at birth stood at 81.17 years (78.37 years for men and 83.67 years for women). 1983 was the last year in which there were enough births to ensure generational replacement. Against this backdrop, projections indicate that, by 2050, more than a third of Portugal’s resident population will be over the age of 65.

Given the lack of generational replacement and the ageing of the population, one might assume that there are currently more jobs for fewer workers. However, this assumption does not appear to be true. Firstly, because the increase in average life expectancy means that people tend to remain active in the labour market for longer, either to have an occupation and a routine, or because of the increase in the retirement age, or even, and increasingly so, due to the need or convenience of supplementing their retirement pension granted by the State. In this regard, it is important to note that in 2023 the average length of working life in Portugal was 39.1 years, among the longest in the European Union.

When analysing this phenomenon and in parallel, one cannot ignore the growing proliferation of technologies in the labour market, as well as the impact already felt in the automation of various jobs, as a result of pressure from organisations to simultaneously optimise costs and maximise production. In addition to this, there is the uncertainty surrounding the impact that artificial intelligence may have on jobs in the near future, making the issue of multigenerationality at work even more pressing and complex.

The current age structure of the population, which is characterised by an ageing trend, thus represents a significant challenge for both the State and organisations.

As regards the State and employment policies, Portugal, like other countries, has provided employers with certain tax benefits encouraging the employability of older or younger people, through measures managed by the Institute for Employment and Vocational Training (IEFP), and others exempting or reducing employer contributions, administered by the Social Security Institute. Legislative measures have also been approved, particularly in the Portuguese Labour Code, with the aim of encouraging the employability of workers according to their age group.

Strictly speaking, many of the legislative measures are based on a differentiation according to age founded on Council Directive 2000/78/EC of 27 November 2000. This Directive establishes a general framework for equal treatment in employment and occupation, while allowing Member States to provide for differences in treatment on the grounds of age provided that they do not constitute discrimination, i.e., that they are objectively and reasonably justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary.

As far as organisations are concerned, and particularly in terms of human resources management, the challenges arising from multigenerationality are of a different nature and are also crucial.

The ageing of the population and the postponement of retirement have resulted in the coexistence of several generations in organisations, which, considering the distinct characteristics of each generation, makes people management an even more complex task, especially as it is subject to the constant pressure of prejudices, such as the phenomenon of “ageism”, i.e., discrimination based on a worker’s age.

Generational diversity implies notable differences in the way people work, the benefits they value or their preferred leadership style, which can inevitably lead to reciprocal prejudices: young people are perceived by older people as less experienced and less committed; older people are perceived by younger people as less agile and less capable of change. The generational clash, although not a new phenomenon in companies, now has a dimension, impact and scale that is unprecedented in history.

Multigenerationality also involves a Diversity, Equity, and Inclusion (DEI) dimension, making it crucial to implement regular mandatory training, promote inclusive recruitment, adopt equality policies, introduce flexible work mechanisms, and carry out diversity surveys on different age groups. As mentioned in a previous Insight [Can organisations thrive in a changing environment if they only focus their approach to Diversity on the issue of Gender Equality?], current studies show that companies with a more diverse workforce have greater profitability and, therefore, a significant competitive advantage.

With particular regard to age diversity, this advantage stems, among other factors, from the formation of teams with diverse and complementary skills, the retention of experience and know-how, and a greater diversity of perspectives.

Notwithstanding the above, the success linked to generational diversity can only be achieved if organisations invest in the training and requalification of their older workers, while preparing younger workers for the future demands of the market.

Upskilling (the development of skills with a view to improving job performance) and reskilling (retraining workers whose jobs have become obsolete to allow them to take on new roles) are essential tools for employers who want to ensure that their workers are able to keep up with change and successfully face the challenges of the future.

According to the World Economic Forum, in the next five years, 23% of current jobs worldwide will have been transformed by technology and artificial intelligence, which means that organisations need to prepare their workers for this transformation.

Multigenerationality in companies’ workforces is therefore a decisive factor in increasing companies’ competitiveness, which, given the current context of transformation, not only cannot be ignored, but must be promoted as a human resources management tool.

Is your organisation committed to taking measures and promoting policies that foster the multigenerationality of your human resources?