“Ask your neighbor what they do,” said Peter Cappelli to the room full of us in the Managing the Older Worker session at 2011’s SHRM conference. Most people in the room complied. “Then,” he continued, “ask them how old they are.” People laughed nervously; no one moved.
That was how Cappelli, the George W. Taylor Professor of Management at The Wharton School and co-author of Managing the Older Worker: How to Prepare for the New Organizational Order, started his discussion on older workers — and as he went on, he explained the current surge in older workers we’re seeing, shared his thoughts on ways in which older workers are better hires than their younger counterparts, discussed how employers can best engage the older generation, and more.
Why the big workplace shift?
The workforce is getting older — and it’s causing a lot of age-related changes in the workplace that many companies are ill-equipped to deal with. Why? Well, first of all, said Cappelli, we’re living longer — babies born in 2010 will live 10 years longer than those born in 1950. If your parents are 65, he added, there is a 50 percent chance that at least one of them will live to the age of 90.
Second of all, we’re also living healthier, and the percentage of older workers who need to work (to support living longer) is growing. And even they don’t have to work, many older people are healthy and want to keep busy; 84 percent say they would work even if they were set for life — not to work for the money, but to stay active.
As more people are increasingly working full-time and baby boomers are getting older, the workforce is also getting older. Basically, Cappelli said, longer life, baby boomers, and people working longer are the three main factors driving an older workforce.
What do older workers want?
Learning how to work with all the generations in the workplace is important for employers, but with a growing older workforce, it’s even more important that we examine what older workers actually want (hint: as mentioned above, it’s not really about the money).
- A friendly environment — 94%
- The chance to use their skills — 94%
- The chance to do something worthwhile — 91%
- To feel respected by coworkers — 90%
- The opportunity to learn something new — 88%
- The ability to help others — 86%
- Adequate paid time off — 86%
- Health care and insurance benefits — 84%
- A flexible schedule — 76%
- To do something they’ve always wanted to do — 75%
The problem? They’re not getting it — because they can’t find work
A whopping 75 percent of those workers approaching typical retirement age want to keep working — but of those workers, only about one-half actually do. Of those who do find new jobs, only one-quarter can actually get hired by somebody else. Many older workers become self-employed because they have a hard time getting anyone to hire them.
Why can’t older individuals find work?
After all, employers complain of not being able to find quality workers, but compared to their younger colleagues, older workers:
- Quit less, are absent less, and have fewer accidents (even car accidents)
- Have more knowledge and better social skills
- Have better job performance
- Are happier, as it’s shown that people get happier as they get older (you want happy workers, right?)
The only thing older workers are generally poorer at, said Cappelli, is solving novel problems under time pressure without aids (advice, calculators, or other help); for example, taking SAT tests — yep, that’s it.
What do employers say they want?
- A just-in-time workforce that doesn’t need training and can “hit the ground running.”
- Flexible workforce that isn’t expecting long-term commitments
- Better interpersonal skills
- Better “knowledge management” of tacit information
Older workers are a perfect fit for what employers say they want – more flexibility, better interpersonal skills and workers who can hit the ground running.
Do older workers cost more?
Quite simply, no. Though there’s a general misconception that this is the case, there’s no premium in the labor market for age – only for experience. Yes, older workers’ health care use is greater, Cappelli said, but they don’t have dependents to pay for (no pregnancies or little kids). In fact, doubling your percentage of 55-year-old workers raises your business’s total compensation costs by a mere 1 percent.
So why aren’t more older workers being hired?
To sum it up in a phrase, age discrimination. I was surprised when Cappellis said that age discrimination becomes apparent for 36.5 percent of older workers at the age of 50. As Cappelli pointed out, we as a society think certain topics or demographics are off-limits when it comes to comedy, yet the one topic deemed not offensive is making fun of older people, which suggests how common it is to hear, see, and accept people being disparaging about age. Age discrimination appears to be more common than gender or race discrimination, Cappelli added, and 67 percent say they’ve experienced or seen it on the job. In addition, 25 percent of employers say their organization is reluctant to hire older workers (and that’s only the percentage that admit it).
It’s even worse when it comes to the IT field: The majority of IT employers said they wouldn’t hire anyone over 40.
Older workers — and younger supervisors
As the workforce ages, executives are actually getting younger, and the percentage of supervisors who are younger than their subordinates is growing. It’s no secret that older workers and younger supervisors don’t exactly mesh all of the time — and as Cappelli said, this conflict is compounding the issue of older workers having trouble getting work.
We’re seeing retired workers coming back into the workforce and take lower jobs, because younger supervisors are acting as gatekeepers to keep many older workers out. But why?
- 88 percent of employers worry about hiring older workers because of conflicts with younger workers (talk about a never-ending cycle), among them the fact that younger supervisors are less likely to give older workers feedback or hold them accountable.
- Younger supervisors are also more likely to believe that performance problems with older subordinates can’t be fixed.
- Younger supervisors, many of whom rely on a “carrots and sticks” mentality that encourages a promotion for doing well and a demotion/getting fired for not doing well, are afraid of managing more experienced subordinates, because these things don’t matter as much or go over well with older workers later in their careers. Older workers are less motivated by pay, and less afraid of being fired. The formal “because I said so” or “because I know best”type of authority doesn’t work with them.
- Younger supervisors are uncomfortable managing older workers — traditionally, it’s been flipped, and they just can’t shake their feeling that they shouldn’t be in a position of power.
Can we fix this?
The short answer? Yes. The solution, according to Cappelli, involves a different model of leadership and management practices, and in his presentation, he mentioned a few ways for organizations to better work with older workers in their organization:
- Tailor your rewards and benefits to their lifestyle and interests: The promotion, bonus or stock options don’t matter as much to older workers, as mentioned above. Instead, provide motivation through meaningful work and social relationships; these factors are a bigger priority for older workers than financial- or career advancement-motivated rewards.
- Consult and empower them: Older workers want to be consulted, so ask them to participate in the decision process on a project or challenge a bit more. They have experience behind them and wisdom to solve many workplace problems, so ask them to get involved.
- Don’t ignore them: Older workers don’t want to be ignored, and they still need to be managed. Remember that managing someone older doesn’t mean you’re giving up authority; older workers must be held accountable, too.
- Initiate mentoring/onboarding: Companies like Deloitte have taken advantage of older workers’ unique talents by asking them to share problems they see in the organization that they’d like to work on and fix. Their attitude is, “If you think it’s a good idea, we will too, almost without exception. We trust you.”
Sometimes, Cappelli said, older workers have to help younger supervisors understand how to best manage them — and to engage younger supervisors in different types of relationships by taking initiative and speaking up for things like what motivates them, the type of environment they want to be in, or their strengths.
How has your workplace found ways to better integrate older and younger generations?