Europeans are living and working for longer. Principal’s CEO says companies aren’t ready for the change

Europeans are living longer than ever before. Over one-fifth of the European Union's population is 65 or older, and the number of those aged 80 and above is projected to more than double by the end of the century. Deanna Strable, CEO of Principal Financial Group, believes that businesses and their employees are not prepared for this shift in the workforce.

"Employers and leaders are going to have to get used to people being in the workforce for a longer amount of time," she states. "I don't think we're all prepared for that."

The aging population is a result of falling birth rates and the retirement of baby boomers. In the EU, over two-thirds of individuals aged 55-64 were employed in 2025, according to Eurostat. As people stay in the workforce for longer, companies will need to adapt their practices, job design, and provide continued training for employees in later stages of their careers.

Strable, who has led Principal since January 2025, emphasizes the importance of reskilling and offering flexible career paths for older workers. Over the past 18 months, Principal has trained all 19,000 of its employees in AI, providing various formats to cater to different learning preferences. The company has also extended its rotation programs to include employees from various departments, allowing staff to explore new roles as their careers progress.

Longer lifespans also pose challenges to retirement savings, particularly for women. Women in the EU are expected to live four fewer years in paid work than men, yet they can anticipate living five years longer. As a result, they will typically receive a pension that is 24.5% smaller than a man's, exacerbating the pension gender gap. Women born today in the EU can expect to live to 84, and the European Commission projects this lifespan to surpass 90 by the end of the century.

Strable highlights the need for employers and the pensions industry to take action to address this issue. Women tend to earn less, work part-time more often, and often take career breaks to care for others, making them more vulnerable to financial insecurity in retirement. Only 29% of European women believe their government's pension system will be sufficient to fund their retirement, compared to 39% of men.

To alleviate the pension gender gap, Strable recommends employers pair auto-enrollment with auto-escalation, gradually increasing contribution rates over time rather than limiting them to the minimum. This strategy encourages individuals to save more, as the increase in contributions aligns with their annual pay rises. However, employer-provided financial guidance has declined in recent years, which is particularly concerning for women who often feel less equipped to navigate the complexities of retirement planning.

Strable emphasizes the importance of providing professional financial advice to women, particularly during critical moments such as starting a family, caring for a relative, or experiencing income loss. Many women lack access to financial professionals, which places them at a disadvantage compared to their male counterparts. By encouraging advisors to maintain relationships with both partners, employers can help ensure that women continue to receive the guidance they need, even after the loss of a spouse.