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Benefits of Hiring or Retaining Older Workers

By Michael Lewis

older workers can serve as role models to younger staffIs your company utilizing the latent skills of your existing workforce? Are you worried about a “brain drain” in the coming years as experienced employees retire? Is your business dependent upon maximum customer satisfaction and a superior experience? If you have answered “yes” to any of these questions, the solution is to retain, retrain ,and reinvigorate your existing employees, specifically those who will be considering retiring over the next 5 to 10 years.

Over the next decade, 43% of America’s workforce will reach age 65 and be eligible for retirement. This group of workers is the most educated, technically competent of any labor group ever available to American industry in history. Collectively, they represent an enormous bank of intellectual and institutional knowledge gained over a half century of technological advancement. Today, as a group, Baby Boomers – people born between 1946 and 1964 – form the largest trained pool of potential future employees available to American businesses.

Myths About Older Employees

Unfortunately, many companies searching for employees overlook their older employees or recently retired workers. In most cases, however, their assumptions about older workers are wrong.

1. Older Employees and Retirees Aren’t Interested in Work

Many older workers wish to continue working or return to the work force when they discover that their retirement benefits and Social Security payments, pension and profit-sharing plans, and personal savings are insufficient to maintain the lifestyle they wanted or anticipated. Others miss the social interaction of the workplace, while yet others find that hobbies and charitable work alone are unsatisfying.

Whatever the reason, according to an American Association of Retired People (AARP) survey, more than two-thirds of older workers indicate that they wish to work either full-time or part-time after age 65. The Sloan Center at Boston College reported in their report “Working in Retirement: a 21st Century Phenomenon” that older workers are more (rather than less) engaged and satisfied with their jobs. Older workers frequently say they want to change the way they work, not stop working altogether.

2. Older Employees Can’t Handle the Physical Demands of a Job

While it is true that some jobs may be physically demanding, the majority of tasks in a modern office or factory can be performed by an older worker. For example, in its Dingolfing, Germany plant, BMW uses older workers on an auto assembly line with minimal accommodations for their age (larger computer screens, special shoes, and chairs for some operations), while L.L. Bean, the outdoor retailer, recruits retired workers for seasonal jobs in their call centers, distribution facility, and flagship store.

In reality, according to Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School, older employees frequently outdo their younger colleagues. They have less absenteeism, less turnover, superior interpersonal skills, and deal better with customers: “The evidence is unbelievably huge. Basically, older workers perform better on just about everything.”

3. Older Workers Are Too Expensive

A retired worker returning to the workforce is often less expensive than a younger worker:

  • Lower Cost of Benefits. Retirees are generally covered by Medicare and therefore don’t require coverage in expensive company health insurance plans, which can add 25% or more to an employer’s cost.
  • Part-Time Status. Older workers are more willing and often prefer to work on a part-time basis, rather than full-time. As a consequence, an employer has great flexibility in scheduling work hours with or without job sharing.
  • Less Training Costs. Most retired workers have accumulated a variety of skills that are easily transferred to new jobs without expensive training courses or extensive on-the-job instructions. Furthermore, being recently retired, they are more than likely fully comfortable with existing technology. Finally, many skills that are required in an increasingly majority service economy are common throughout all industries. For example, a worker who has handled customer service for a computer manufacturer would have people and communication skills to handle similar duties on a retail floor or with customers of an insurance company.

In addition, older workers may be willing to take a little less to get the job they want or extra benefits. A retail business, for instance, might offer employee discounts on purchases or schedule flexibility during the work week to accommodate personal needs. Older workers are more likely to appreciate that a job entails much more than showing up and collecting a paycheck.

older worker on the job

Benefits of Retaining & Hiring Older Workers

While the qualities attributed to older employees may vary, they can be generally captured in one of five categories:

  1. Experience. Older employees have been there, done that. Their years in the workplace have given them an understanding of what is expected and how their work affects others. Their judgment, collected during a lifetime of mistakes and achievements, often leads to less costly, more streamlined, and better outcomes. A friend, recently retired as a purchasing agent of a major defense contractor and now working part-time at the local pharmacy, reduced the number of vendors serving the local chain, negotiated lower prices in some cases, and reduced total inventory investment. As a result, he affected a one-time savings of more than three times his annual salary with ongoing savings of more than $150,000 per year.
  2. Perspective. As we age, our views about ourselves and the people around us change. Older workers are more confident in their expertise and subsequently bring stability to the workplace, often acting as role models and mentors to younger employees. The maturity and knowledge that comes from years of life and work enables older workers to make critical, often innovative decisions, considering factors that younger workers simply haven’t had the time to experience.
  3. Adaptability. The Baby Boomer Generation of workers has experienced more change in the workplace than any previous generation before them. Markets and jobs have expanded globally, technology has transformed a mechanical workplace into an electronically-connected Internet, and social change has secured equality and participation in the workplace never before witnessed. Throughout their careers, older workers have seen unprecedented change in their professional and personal lives, accepted the new circumstances and requirements, and quickly and successfully adapted.
  4. Responsibility. A 2012 survey of human resource professionals by the Society for Human Resource Management reported that older workers exhibited a greater degree of professionalism and work ethic than younger workers. They are more willing to share their ideas with others, and less hesitant to speak up when encountering a problem. “They [older employees] are less ‘rattled’ and can be counted on in a crisis,” according to AARP Board Chairman Charles Leven.
  5. Commitment. Older employees understand the need for punctuality, regular attendance, and conformance with work rules and company guidelines. Some employers complain that their younger workers simply want to “put their time in” and leave, unlike older workers who are more willing to stay late and get the job done because of a sense of pride in themselves.

older workers can share years of experience

Potential Drawbacks

Managing and working with older workers is not always a bed of roses – you’re sure to encounter a thorn now and then, as older workers have several characteristics that can present problems:

  1. More Skeptical of Optimistic Outcomes. Older workers have generally experienced a great amount of re-engineering, repositioning, and other company initiatives that are introduced with great fanfare and executive enthusiasm, only to fizzle away into oblivion. New programs and initiatives are likely to be more successful when older workers are involved and committed to their success. As a consequence, your older employees should be fully informed and understand the reasons of a new program at its inception. Once committed, they are likely to lead younger workers by the example they set.
  2. More Independent. Since older workers tend to stay on the job by choice, rather than circumstance, they are less willing to tolerate hypocrisy, double standards, or perceived injustice. They expect company leaders to walk the walk and talk the talk, earning loyalty with their actions, not their checkbook.
  3. Less Flexible in Their Work Schedules. Science has shown that older people have a harder time adjusting to a varying work schedule than younger employees. The older worker is less likely to tolerate changes in his sleep cycle with a more pronounced outcome on productivity than his or her younger counterpart.
  4. More Likely to Have Hearing or Vision Deficiencies. As people age, they undergo physical change. Visual acuity suffers, hearing problems surface, and knees and backs wear out. These physical declines may not allow an older employee to perform some tasks efficiently or at all. For instance, in a retail store – where strength is essential in order to receive and store inventory – flexibility is required to replenish products at ground level, and balance is critical when using ladders or step stools to reach stock overhead. A person with hearing difficulty probably would not function well in many positions, such as those that require customer interaction.

older worker

Final Word

According to a report by Deloitte for the Manufacturing Institute earlier this year, there are currently 600,000 skilled manufacturing jobs going unfilled today, a number that will only escalate during the next decade. In its February 2012 report of employment projections, the Bureau of Labor Statistics estimated that five million new jobs will be needed in the construction, retail trade, and healthcare industries alone by 2020.

The bottom line is that the United States has neither the existing trained workforce nor sufficient numbers of people in training to meet this demand. We must utilize our overlooked, untapped resource of older workers, encouraging them to extend their careers and motivate retirees to return to the workplace. It would be good for them and good for America.

If you’re currently retired, would you like to return to work? If you’re working, are you willing to delay retirement?

Michael Lewis
Michael R. Lewis is a retired corporate executive and entrepreneur. During his 40+ year career, Lewis created and sold ten different companies ranging from oil exploration to healthcare software. He has also been a Registered Investment Adviser with the SEC, a Principal of one of the larger management consulting firms in the country, and a Senior Vice President of the largest not-for-profit health insurer in the United States. Mike's articles on personal investments, business management, and the economy are available on several online publications. He's a father and grandfather, who also writes non-fiction and biographical pieces about growing up in the plains of West Texas - including The Storm.

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