preparing for an aging workforce
Graduate Student
Masters in Engineering
Management
Lamar University
Beaumont, TX 77710, USA
Fall 2001
1.
Introduction
The median age
of our workforce has increased over the last decades. However, has management’s
perceptions about the older employee changed? What does a lawsuit against age
discrimination mean? In the pages that follow, we discuss the challenging
issues faced by the HR manager in preparing for an aging workforce.
2. Literature
2.1
Changing Demographics
The age
profile of the working-age population is undergoing a substantial shift towards
a greater number of older workers and a relative scarcity of new entrants to
the labor force. The baby boom began in 1946 and continued through 1964. In
2000, the oldest baby-boomers were aged 54 years, while the youngest members of
the group were 36 years old. These 78 million individuals make up approximately
55 percent of the US population aged 25 to 54. [1]. According to Census Bureau,
the labor force segment age 45 to 64 years will grow faster in the next decade
than the labor force segment of any other age group as the baby-boom generation
continues to age. The labor force segment age 25 to 34 years is projected to
decline by almost 3 million, reflecting the decrease in births in the late
1960’s and the early 1970’s. [2] Given this demographic shift, the median age
of the labor force will rise from 38.7 in 1998 to 40.7 in 2008. [3].
The monthly
Labor Review [3] lists occupations with greater than average number of workers
aged 45 years and older 1998-2008. There are a number of reasons these
occupations have older workforces. Many of them are made up of supervisory or
managerial employees, who normally are older than frontline employees. Within
executive, administrative and managerial occupations, for example 41 percent of
employees are 45 or older. Another reason is that, due to obsolescence,
productivity improvements within the occupation, or difficulty in hiring and
recruiting, many of the occupations listed are declining in employment –which
means fewer younger workers coming into the occupations, leaving a workforce
that is older than average. Many of the clerical and manufacturing jobs on the
list fall into this category. Professional occupations also have a
disproportionate number of older workers, particularly those requiring
postgraduate degrees. More educated workers also have a tendency to stay in
their careers longer, due to greater job satisfaction and the costs of lost
income in leaving the job.
2.2
Employer Perceptions
Companies of
all kinds face a constant struggle to fill positions at each skill level. And
despite layoffs that many companies are now carrying out, the problem could get
a lot worse if a neglected part of the workforce, the older employee doesn’t
get more attention from the HR manager. [4]
An AAPR survey
of 2000 titled “American Business and Older Employees” presents the HR managers
perception of older employees. Older employees were recognized for having good
work ethic and for providing experience, knowledge and stability in the
workplace. They were also, however characterized as inflexible, averse to
change, and resistant to learning and understanding new technologies. [5]
|
Employee Qualities Most Desired Overall (According to HR Managers) |
Top Qualities of Older Employees (According to HR Managers) |
||
|
Rank |
Quality |
Rank |
Quality |
|
1 |
Commitment to doing quality work |
1 |
Loyalty and dedication to the company |
|
2 |
Get along with coworkers |
2 |
Commitment to doing quality work |
|
3 |
Solid performance record |
3 |
Someone you can count on in a crisis |
|
4 |
Basic skills in reading, writing,
arithmetic |
4 |
Solid performance record |
|
5 |
Someone you can count on in a crisis |
5 |
Solid experience in job and/or industry |
|
6 |
Willing to be flexible about doing
different tasks |
6 |
Solid experience in job and/or industry |
|
7 |
Loyalty and dedication to the company |
7 |
Get along with coworkers |
According to
HR managers it is easier to teach a worker a skill than it is to instill
dependability, loyalty and other aspects of good work ethic. A candidate with
both job skills and a strong work ethic has a much greater chance of being
hired or retained. [5]
2.3 Myths
There are some
organizations that seem preoccupied with removing “deadwood”(read: middle aged
and older workers) and always on the lookout for “new blood” (read: younger
workers). [6]. Reasons cited are: the belief that older workers can’t meet a
job’s physical demands; the belief that older workers will be absent too often
because of illness; the fear that senior workers aren’t adaptable and
trainable; the belief that older worker cost more. These myths were countered
by The New York state Department of Labor. [7] They cite that: 1. Less than 12 percent of today’s jobs
require great physical strength; 2. Surveys show that older workers have better
attendance than younger workers; 3. Evaluations of older workers show a high
degree of flexibility; 4. Studies show that older workers are willing to accept
a beginner’s salary in a beginner’s position.
Practices such
as refusing to hire or promote older workers, encouraging their retirement,
targeting them in reduction in force, curtailing their employee benefits or
limiting their training opportunities especially are all instances of age
discrimination. This discrimination is particularly severe for persons who have
lost jobs in declining industries, such as heavy manufacturing and for
individuals in high technology fields. [8]
3. The Law on Age Discrimination
Two hundred
million dollars was spent by corporate America in lawsuits since 1996 for legal
awards and settlements for age discrimination in the workplace. [9]. Between
1988 and 1995, people claiming age discrimination were awarded an average of
$219,000 each. [9]
Legal
protection starts at age 40. The Age Discrimination Act of 1975 [10] (ADEA) and
Title VII of the Civil Rights Act of 1964
[8], prohibits discrimination on the basis of age in programs or
activities receiving Federal assistance. Under the ADEA it is unlawful for an
employer to fail or refuse to hire or to discharge any individual or otherwise
discriminate against such individuals with respect to his compensation, terms,
conditions, or privileges of employment because of such individual’s age. This
covers every major function from hiring through retirement. [6] An amendment to
the act entitled Older Worker’s Benefit Protection Act (OWBPA) [11], spells out
the requirements for waivers/releases of age discrimination claims for early
retirement incentive plans. If a written termination agreement does not comply
with OWBPA conditions, then the employee maintains the right to sue for age
discrimination under the ADEA [11].
4. Preparing for an Aging Workforce
The age
demographics will face the HR managers with two challenges: first, they will
need to design benefit plans and workplace options that appeal to older workers
wishing and needing to work; second, they will need to find slots into which
younger workers can be promoted. [7]
4.1 Audit
your organization’s culture
Start by
conducting research on how employees feel about older workers and how those
feelings manifest themselves in the workplace. Voluntary employee surveys and
focus groups can help you figure out how to improve your workplace culture.
[12]
Rethink and
change attitudes about older adults in the workplace. This means formulating an
educational program designed to dispel myths and provide the real facts
concerning retirement wishes, costs, achievements, productivity, attendance,
health care, wellness, and the ability to retain older workers. [12]
4.2 Review
and revise policies
Review and, if
necessary, revise policies, training programs, recruiting methods, job designs,
and evaluations and compensation programs to eliminate unintentionally biased
language and employment practices. Make
certain that your diversity task force, if you have one, includes older adults.
[12]
Develop a
friendly environment for older adults as part of work-family benefits. Build
morale and higher productivity by demonstrating to older workers that they are
valued and appreciated. One method of achieving this aim is to use mentoring
and team building strategies to build relationships between younger and older
workers. [12]
Above all,
make sure that senior managers and human resource staff are committed to the success
of this effort. [12]
Most HR
managers think that some approaches could promote greater utilization of older
employees, but most are not implementing the programs they believe to be
effective. The table below shows this discrepancy. [5]
|
Approaches to More Fully Utilizing
Older Employees |
Approaches Considered Very or
Moderately Effective (%) |
Business Has Implemented the Approach
(%) |
|
Benefit packages targeted towards older
employees |
68 |
18 |
|
Part-time work arrangements with
continuation of benefits |
64 |
30 |
|
Educating managers about ways to
utilize older employees |
60 |
25 |
|
Increased availability of part-time
work for older employees (regardless of benefits) |
55 |
36 |
|
Skill training for older employees |
55 |
44 |
4.3
Effective Training programs for older workers
Companies need
to think the way they train employees. Studies show that a worker over 55
receives about one-third the hours of formal training that a younger worker
gets. When people tended to stay with one company for most of their careers,
this made sense. Companies got bigger returns on their investments by providing
training to 25-year old managers who would be with them for long haul than by
offering it to those much closer to retirement. But younger people move around
more today; older workers, who get fewer offers to move, are more likely to
stay on. Also technology skills no longer have a very long shelf like, so it
doesn’t make sense to withhold training from anyone based on age. [4]
Older workers
attitudes towards career development activities and mobility relate to such
factors as current employment, tenure or stage in their careers, need for
achievement and need for growth. In addition, fear of stagnation, marketability
perceptions, job market conditions and chance encounters may play a role in
decision-making. A career –goal decision –such as the choice to engage in
training and retraining can lead an older worker to identify growth and
enhanced self-esteem that in turn may result in greater commitment to future
career-development goals. [13]
The adult
training and retraining literature has documented a number of dimensions for
successful training programs. Older workers are least likely to volunteer for
instruction, so trainers may need to encourage them more than others. [13]
Include positive depictions of mature men and women in your training materials
and use them as instructional role models. [14] Cognitive research has shown
that older adults have more difficulty than younger adults in organizing
information effectively. As a result, trainers should encourage retention and
comprehension by placing material for older trainees into meaningful
groupings. Behavioral research
consistently indicates slowing reaction time and increase in learning time with
age. Slower presentation of training material and provision for longer study
and test periods should aid older workers. [13]
5. Best Practices
American
Association for Retired Persons (AARP) has recognized 11 employers for
exemplary practices towards older workers. The companies include ABN AMRO North
America in Chicago, Avis Rent A Car System in New Jersey, Baptist health
Systems of South Florida, Camping World of Bowling Green in Kentucky, Foley’s
Department Stores of Houston, Giant Eagle Inc of Pittsburgh, Hyatt Hotels
Corporation of Chicago, MITRE Corporation in Bedford, Oregon Health &
Science University of Portland, Prudential Insurance Company of America of
Newark, RESTART Temps in Pennsylvania. [15].
When Days Inn
hired older workers and trained them to handle the electronic reservation
systems, the retention rate grew three folds. It also realized that older
workers are valuable for phone reservations, as they tend to engage customers
in personal conversations and collect important sales information in the
process. Microsoft has supported Green Thumb, a non-profit training
organization, in its effort to develop programs that prepare older workers to
obtain jobs at computer-related companies. Companies like Quaker Oats and GTE
have retained senior executives considering retirement by assigning them to
foreign offices. [4]
Employees who
perceive their employers as ethical are more likely to be proud to be
associated with the company. Of the employees who felt they were working for an
ethical company, 55% were truly loyal. [16] The truly loyal exhibit the kind of
behaviors that make business successful-they work hard, stay late, go the extra
mile to delight the customer and recommend the company to their friend as a
good place to work.
6.
Interest groups
The American
Association for Retired Persons (AARP) and professional bodies like the IEEE
USA’s Older Workers Initiative [17], are committed to the realization and
maintenance of an employment environment free of jeopardy from age
discrimination practices. In publications such as “Age Discrimination and You”
[6], the interest groups spread awareness among the employees and draw
attention of the HR managers to this issue. An excerpt from this
publication:
“It will never
happen to me.” The chances are in fact slim. Watch out for the “Red Flags” warning
signals [6]. Have any of these things ever happened to you?
You didn’t get
hired because the employer wanted a younger looking person to do the job.
You were
passed over for training courses and then got a negative job evaluation because
you weren’t flexible in taking on new assignments.
You got fired
or laid off because your boss wanted to keep younger workers who are paid less.
You received
undeserved negative performance evaluations and then your employer used your
“record” of poor performance to justify a demotion or termination.
You got turned
down for a promotion to a mid-management job, which went to someone younger;
who was hired from the outside because the company says it “needs new blood”.
If you
answered “yes” to any of these, you may be a victim of age discrimination. You
should talk to your employer to see if you can resolve the matter. If not, you
have the right to file a charge with the Equal Employment Opportunity
Commission (EEOC) for further investigation. [18]
7. Conclusion
It is the HR
manager’s responsibility to be proactive in adapting to the changing
demographics. Conducting a survey, reviewing and revising policies, effective
training programs for older workers and creating a company wide awareness to
prevent any age bias will be effective. Learning from best practices and
keeping abreast with interest group activities are strongly suggested.
bibliography
[1] Older
workers: employment and retirement trends, Monthly Labor Review, October
2000, p 20
[2] Tapping
into Older Workforce, Society of Human Resource Management Magazine, 2001
[3] Gauging
the labor force effects of retiring baby-boomers, Monthly Labor Review,
July 2000, p17
[4] Needed;
Experienced Workers, Harvard Business Review, July-August 2001 p20-21
[5] AARP,
American Business and Older Employees, A Summary of Findings, 2000
[6] Michael D.
Batten, You and Age Discrimination, IEEE Cat. No. UH0131-3
[7] Elderly
for Hire, The Business Journal of Kansas City, July 7, 1997
[8] AARP, The
Policy Book: AARP Public Policies 2001, p 4-2
[9] Beyond Age
Bias: Successfully Managing an Aging workforce, The Business and Aging
Networker, Fall 1998.
[10] U.S. DOL,
Age Discrimination Act of 1975 (42 U.S.C. Sections 6101-6107)
[11] Selected
Reports and Articles on High-Tech Age Discrimination, High Tech Workers and
Age Discrimination, IEEE USA, 2001
[12]
Steinhauser Sheldon, Age Bias: Is your corporate culture in need of an
overhaul, Human Resource Management Magazine., 2000
[13]
Integrating work and learning: A key to older employee success, The
Business and Aging Networker, Winter 2001
[14] Stephen
O’Connor, Seasoned Citizens, The spice of Your Workforce., 2000
[15] AAPR, AARP
Recognizes 11 employers for Exemplary Practices Towards Older Workers, 2000
[16] Employee Loyalty Around the Globe,
MIT Sloan management Review, Winter 2001, Volume 42, Number 2, p. 16
[17] Age
Discrimination, President’s Column, IEEE USA, 10 May 2000.
[18] AARP,
Working Options: Recognize age discrimination in employment.,2000