November 21, 2010

The Wiser Workers: Why You Should Avoid Age Discrimination

There’s been a lot of media attention lately on the possible increase in the retirement age in the U.S. It’s an interesting issue to debate, as there are both merits and dangers to changing it. Either way, the consequences of potential changes to the legislation are of concern to what are typically referred to as “older workers.” Now if you go by the Age Discrimination in Employment Act, older means 40 and above. As a fairly recent entrant into the above-40 crowd, I don’t much enjoy this definition.

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Who Are Older Workers?

In reality when referring to “older workers” we’re usually talking about those currently 55 and older. This group, according to recent studies, is growing 4 times faster than the workforce as a whole. In 2012, every day approximately 10,000 baby boomers will turn 65. The U.S. Bureau of Labor Statistics predicts that the number of “older employees” in the workforce will increase by at least 80 percent from 2010 to 2016.

This demographic shift obviously has consequences for employers. Increased health care costs, increased disability claims, potential consequences to retirement plans and other changes are imminent. These concerns have lead to an increase in the percentage of laid off workers that are older. The unemployment rate for older workers has soared and some say it is twice as high as it was prior to the recent recession. When downsizing a workforce and deciding “who should go,” employers need to not only look at the legal aspects of discrimination, but other consequences as well.

One of these consequences is a higher risk of legal action taken against the company. When layoffs occur, over-40 workers may feel unfairly targeted because of their age and file an EEOC complaint. Nearly 30 percent more age discrimination charges were filed in 2008 than in 2007, leading the EEOC to state that the American workforce faces "an equal opportunity plague" of age discrimination.

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Benefits of Hiring “Older” Workers

There are other less tangible consequences to companies focusing less of their retention efforts on older workers. Older works are often cited as being more dedicated, more punctual, more honest, more detail-oriented, more mature, more loyal, more respectful, better mentors, and the list goes on. If these qualities are, in fact, more prevalent among older workers, it could be a detriment to the company to lose these people.

Despite these reported advantages, retention of older employees has decreased significantly. Even more significant is the decrease in hiring of older workers as jobs return. The unemployment increase for older workers is not only a function of layoffs, but of the fact that when older workers do lose their jobs, then tend to be out of work for a longer period of time. Their re-employment rate is much worse than that of their younger counterparts. And if they do get re-employed, then often tend to take a much bigger hit with their wages.

Why Employers Hesitate to Hire Older Workers

So why would employers be hesitant to hire older workers? Cost always seems to be the initial consideration. There are concerns of increased health care costs, increased disability claims, and potentially higher wages for those that have steadily remained in the workforce for many years. But there are other concerns as well. Often older workers are assumed to be “behind the times,” insinuating that their skills, education, and training are out-dated and they perhaps won’t be able to “keep up.” This seems to especially be a concern with technology. But there is good reason for that! Many older workers may not have grown up with computers and, for those who didn't, they may not have the same experience and comfort level as a recent college graduate who has been on the internet since he or she was in diapers.

Other seasoned workers may be well ahead of their younger counterparts. Computer skills can be learned, and learned well.

A Balanced Approach

However, older workers are currently the fastest growing group of Internet users, so they are clearly “catching up.” Yes, there may be a learning curve that is longer and arguably more costly to the company. On the other hand, some of the earlier mentioned positive attributes of older workers could surely make up for this in certain situations.

Are employers right to be hesitant, or are older workers getting an unfair shake? There is no one definitive answer this question, but my advice for employers consists of three things: balance, patience and empathy. Younger workers bring with them a whole host of positives and negatives as well, so the best we can do is to try to have a balance in the organization so that you get the best of both worlds. Patience and empathy are often lacking in companies today, but we need them more than ever. The older workforce is not going away. The baby boomers are here in huge numbers, and especially if the retirement age changes, they are here for a long time.

Regards,

Eliza Polly
PayScale.com

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