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Older Workers: Betting on a Sure Thing

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Getting older, working smarter

Retention key to looming labor shortage
More than 76 million workers will retire between 2008 and 2030, but only 48 million workers will be available to replace them. "That's a huge number," says Laurel Kennedy, president of the Chicago-based "thinking firm" Age Lessons. "No matter how much more productive we become, how much more immigration or outsourcing we have, we can't make up that deficit unless we retain older workers.”

The good news, Kennedy says, is that almost 80 percent of Americans are willing to work in later years. The bad news is that too many companies still undervalue the productivity and potential of graying workers, especially women.

A new global survey of 21,000 employees at 6,000 private-sector companies by HSBC found "that employers aren't doing enough to retain older workers." The report says this failing "puts the continuity of the corporate culture at risk and raises the prospect of worsening future skills shortage and experience drain."

Advantage: Boomers
"It's an urban myth that older workers are most expensive," Kennedy says. "The worst case is that they are 3 percent more expensive, while replacing them costs 39 percent more. The math is on the side of the Boomers," who have "lower turnover, less absenteeism, fewer accidents, more positive work values and are more dedicated," she says.

A Society of Human Resource Management study compares older workers to younger ones: "Gen Xers" tend to learn quickly, seek work/life balance, embrace diversity, are tech savvy and prefer informality; "Next-ers," the youngest generation at work, embrace diversity, are flexible, and require supervision; and Baby Boomers accept authority, provide maximum effort on the job, are results-driven, and generally plan to stay, according to the SHRM study.

Changing cultures
"The business culture reflects the national cultural norms about aging, where gray hair is okay if you're a CEO, but a negative for most everyone else,” notes Kennedy. Older women are especially vulnerable to age stereotyping.

Kennedy advises companies to start a review of older-worker retention policies by conducting a workforce gap analysis, measuring attitudes towards benefits that would incent Boomers to work longer, and looking at how they communicate to create a positive environment that embraces generational differences. "Even showing older faces in your recruitment advertising can send a signal of inclusion,” she advises.

Women executives can contribute to changing their company's corporate culture and use cost-benefit analysis to disprove myths about senior workers. Flexible work hours and non-traditional job opportunities can help retain older workers longer.

Kennedy advocates “creating 'Silver Skunk Works,' teams of senior executives who develop advanced products or address persistent issues. These special teams challenge older managers and capture a knowledge base that would otherwise be lost." Another trend cited by Kennedy is using senior executives, singly or in teams, as internal consultants. Because they are close to retirement they often have fewer political stakes in the outcome and can be more objective, she notes.

Senior strategies
Women and other older executives trapped in no-growth jobs do have options, Kennedy says. "They can propose and manage new company initiatives, they can make a lateral transfer, say from CFO to COO where skill-sets intersect, or they can take advantage of retirement packages to start their own 'gray-field' enterprise.''

More and more older workers, forced out of corporate management or frustrated by a lack of opportunity, are taking their talents elsewhere. But it doesn't have to be that way. With robust senior retention policies, corporate America can use the experience and productivity of older executives to stay competitive. As the workforce grows older, doing otherwise will not be an option.