It’s Time for Some Bold Strokes to Support Older Employees

Posted Wednesday, May 28th, 2014  | Comments (3) rule

Philip Moeller
Contributing Writer, Money
Author, book on Social Security, under contract with Simon & Schuster
Speaker, on retirement and successful aging
Journalist and Editor, American History of Business Journalism
Research Fellow, Sloan Center on Aging & Work, Boston College

Research and anecdotal evidence find that workplaces often are not welcoming or friendly to older workers, and may be condescending if not actively hostile to them. Employers may be unwilling, unable or simply clueless about the well-established needs of older employees.

Meanwhile, mounds of research also have solidly established that older employees bring a wealth of experience to their jobs. They can be an organization’s most stable and loyal employees, are very trustworthy, great mentors, enjoy work more than younger cohorts and can be every bit as productive as workers in younger generations. If—and it’s a big one—if they are intelligently managed and supported by employers.

Now, hold this thought for a moment and consider a bit of irrefutable demographic information. The United States is running short of workers. Yes, lots of older Baby Boomers are extending their working lives, leading to alarmist stories that they are taking work from younger jobseekers and stalling efforts to begin and establish career paths. But the bigger picture here is that millions and millions of other Boomers are retiring, and their numbers will not be replaced over time by younger and smaller generations. Short of a large and totally unlikely flood of new immigrants into the U.S., many employers will have increasing trouble finding enough new employees, let alone qualified ones.

The happy solution, of course, would be for employers to close this manpower gap by embracing their older workers, retaining the ones who want to stay and putting out the welcome mat for new employees who are in their 60s and even 70s. They would get a great reception from older people who either want to keep working because they enjoy it, or need to keep working because their retirement portraits look like Dorian Gray.

There is a lot that education could do to produce better matches for older employees and workplaces. Often, reading about employer concerns regarding older workers seems like a story written in a foreign language compared with the narrative about how valuable a resource older employees can be.

Even so, the main spoiler to a happy ending to this story is—simply but profoundly—money. Older employees often represent higher expenses to employers. They may make higher salaries than comparably skilled younger persons. Their healthcare costs are higher. In many work settings, they are more likely to become injured and their rehabilitations are longer and costlier. Older employees may receive less training for skills maintenance and upgrading because they are viewed as sunset workers for whom such spending would be a bad investment.

What to do?

More studies and mindfulness strategies are nice thoughts but do we really need more research here? Experience suggests that employers with sizable older workforces will develop effective ways to handle them. The key is to encourage them to develop such workforces. And the best way to do that is to make it worth their while financially.

The biggest levers that exist to effect large-scale behavioral changes among employers are retirement and healthcare costs. These are big employer expenses.

If there’s any good news here it’s that they also are enormous public expenses. Social Security and Medicare have huge price tags that are only going to rise as Boomers get older. Less visible, perhaps, are the sizable hits to the U.S. Treasury from the breaks for tax-deferred retirement accounts and the tax deductibility of employer healthcare premiums.

Obamacare already has caused big attitudinal changes toward employer healthcare funding and, of equal importance, the notion that employers even are the best places to offer healthcare in the first place. It is not hard to see a future where employees go directly to a public or private healthcare exchange for their insurance.

As this likely evolution occurs, healthcare and retirement benefits are more and more likely to be viewed as coming from the same expense bucket. They will be managed as part of a single expense pool and employee costs will be looked at accordingly. Employers would pay “X” dollars for each employee’s benefits. And they shouldn’t care whether those dollars are spent in retirement security or healthcare. Nor where they are spent.

This is all by means of suggesting that changes could be made in Medicare and Social Security that would save employers enough money on the older members of their work forces to greatly reduce if not eliminate any added costs posed by them.

To name one example, why couldn’t Medicare be redesigned to accommodate older persons who are still working? Employers could shoulder some of these healthcare costs, although far less than they’d pay for a non-Medicare employer. Medicare would save money as well. Employees shouldn’t care whether their premiums go to a private insurer though a marketplace or to a private insurer participating in Medicare.

Further, older employers—and their employers—today continue to pay Social Security payroll taxes even if such taxes will add not a single penny to their eventual Social Security benefits. What about creating a payroll tax reduction or exemption for employees of a certain age? This might cost Uncle Sam some payroll tax dollars but wouldn’t the income tax benefit of keeping an older worker on the job more than make up for that hit?

Removing the reality and perception that older employees are a cost burden would lead to the retention and hiring of more aging Boomers. They would be better off and so, likely, would society.

Comments (3) for "It’s Time for Some Bold Strokes to Support Older Employees"


The Logics of Change

Posted Wednesday, May 14th, 2014  | Comments Off on The Logics of Change rule

Stephen Sweet, PhD
Associate Professor of Sociology
Ithaca College
Research Fellow
Sloan Center on Aging & Work, Boston College
617.552.9195 | ssweet@ithaca.edu

Many good reasons exist to promote age-responsive workplace policies, but different logics underpin the arguments advanced.

First, consider the logic of economic productivity. This rationale for age-responsive workplaces focuses on the risks of losing talented staff and makes the most of a multigenerational workforce. For example, an all-in or all-out retirement policy can lead some workers to exit their jobs sooner than their employers might desire, and hamper knowledge transfer between generations. Because such a policy can cause recruitment costs to escalate, productivity to fall, and profit to suffer, the option of bridge jobs looks like a better bet by comparison.

Second, the logic of social justice can be applied. This rationale focuses on the issue of inequity and how age or life-stage discriminatory practices create disadvantage. Applying this logic focuses on unfairness in the blunt use of age and parental status as markers of employability. Social injustice can result in the disillusionment and debasement of those who have been treated unfairly. It can also create entitlement for those advantaged by the status quo. The logic of social justice presents equity in workplace policies as an uphill battle of the weak against the strong, and its effectiveness is enhanced by social organization.

Third is the logic of collective interests. This rationale considers the health of society as a whole as the primary concern. Plato discussed this rationale in his treatise The Republic, showing that some types of unfairness or inequity can actually serve to create a more powerful society. For example, in the realm of retirement policy there may be very good reasons to encourage an older generation to exit the workforce in order to make room for the entry of a younger generation. Similarly, collective interests might also be served by policies that promote shorter work weeks and more vacation time as ways to reallocate work and reduce unemployment.

Weighing the arguments

If one is seeking to catalyze discretionary change within organizations, economic productivity is the logic that will have the greatest force. Can age responsiveness improve brand reputation? Will it facilitate recruitment and retention of the best workers? Will it enhance a company’s capacity to serve an age-diverse client or customer base? These are all relevant questions, which in turn beg for some type of cost-benefit analysis. The reality is that sometimes it makes economic sense for employers not to be age-responsive, and when that’s the case, those who fight for reform must fall back on the logics of social justice and collective interests.

The civil rights and gay rights movements reveal the remarkable sway that social justice arguments can have on workplace policy. How the Baby Boom generation will change the terms of employment for older workers is an open question. If its impact on the anti-Vietnam War movement, the sexual revolution, and popular culture are indicators, the effect is likely to be substantial but even so, it is not inevitable. Social justice may align with demands for nondiscretionary labor protections, but political will and political organization are necessary to back those demands up.

Owing to the individualistic orientation of American culture, the logic of collective interests might be more difficult to mobilize into action. However, remember that a shared spirit was a foundation of the commitment to World War II and underpinned many of the policies for returning soldiers (such as the GI Bill). The application of the logic of collective interests to age-responsive workplace policies requires considering not only what is best for older workers but also what is best for workers at all stages of life, as well as for those who are outside of the workforce. Ultimately, this question asks us to think about why age-responsive workplaces are important not only for securing the interests of older workers and their employers but also for the interests of a remarkably diverse society.

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Stephen Sweet, Associate Professor of Sociology at Ithaca College, author of The Work-Family Interface (2014 Sage), and Research Fellow at the Sloan Center on Aging & Work

Comments Off on The Logics of Change for "The Logics of Change"




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