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Unlock the Potential of Older Workers

October 1, 1995
Companies don't seem to know what to do with them. Ineffectively recruited, ineffectively retained, they have been confined to the fringes of the organization by employers—or have been unintentionally barred completely. They are older workers, and companies had better sit up and take notice. Their ranks are swelling, and this rapid growth will continue as the oldest of the 76 million baby boomers born between 1946 and 1964 begin hitting their fifth decade. According to the Washington, D.C.-based American Association of Retired Persons (AARP), one in eight Americans is older than 65, and by 2030 that figure will rise to 20%. Already, people older than 55 account for 20% of the U.S. population.

What does all this have to do with you? A lot. This labor force will become absolutely critical to your business in the next few years—for several reasons. First, older people are staying in the work force longer than ever before. Thanks to laws such as the Age Discrimination in Employment Act, people in most professions are no longer forced to retire, and they're enjoying extensive protection of pension benefits.

Technology is also playing its part. The information revolution is creating jobs that are less physically demanding, so individuals will work longer, and older workers will contribute more to economic growth.

"Major labor shortages loom ahead. With 76 million baby boomers and only 56 million baby busters, businesses will need to recruit and retain older workers."

But there's a second piece of the puzzle that soon will make mature workers indispensable. Because of the baby bust, major labor shortages loom on the horizon. With 76 million boomers and only 56 million baby busters (born between 1965 and 1976) to take their places, companies trying to fill entry-level positions will be searching mightily for viable candidates to fill those slots.

Unfortunately, there are still many barriers to employing mature workers. Today's workplace isn't particularly friendly or accessible to older people. They suffer from great earning disparities with younger workers. They're forced into uncomfortable decisions by rigid scheduling structures. The option—either retirement or full-time work—causes many to shy away from employment. Finally, many myths and prejudices about older workers keep them from the workplace. For instance, a 1989 report by the Bureau of Labor Statistics, "Labor Market Problems of Older Workers," indicates that many older workers who want to find jobs give up because of age discrimination.

So just because companies will need older workers and this group is eager for employment doesn't, unfortunately, mean the problem is solved. Organizations that want to successfully employ this segment of the labor force must recognize the particular needs of older workers and create policies to ensure their success.

Recruiting, training, managing and retaining all must be approached with a bit of a twist. Companies that do it right—such as McDonald's, Home Shopping Network, AT&T, Texas Refinery Corp. and Good Samaritan Hospital—will tell you a little extra effort pays off.

Before you do anything else, dispel the misconceptions.
Older people are constantly being questioned about their ability to stand up in the work force. The older the person, the greater the skepticism. Even a July Time magazine cover story on presidential candidate Bob Dole chose to focus on age: "Is Dole Too Old for the Job?"

"The biggest barriers to the employment of older workers are myths about productivity, safety and costs of employing these workers," says Catherine D. Fyock, president of Prospect, Kentucky-based Innovative Management Concepts and author of the book, "America's Work Force is Coming of Age."

Yet none of these rumors have proven to be substantial. For instance, AARP states that workers between the ages of 50 and 60 stay on the job an average of 15 years, and their attendance is as good or better than other groups. Safety also should be of limited concern, according to the AARP. In most occupations, mature workers have a lower accident rate, with workers 55 and older accounting for 13.6% of the work force but for only 9.7% of on-the-job injuries.

Finally, there's little proof that older workers cost more to employ. For instance, the belief that older workers cause increased health-care costs—one of the most tenacious myths—has proven to be unfounded by several studies. In particular, one by Yankelovich, Skelly and White Inc. showed that health-care costs between 30-year-old males, women with dependents and 65-year-old retirees are about the same. It also proved that 55-year-olds are the least costly of all groups. And, in a number of surveys, according to Fyock, respondents revealed that even if health-care costs were higher, the advantages of employing mature workers offset any additional cost because of lower absenteeism and turnover.

These concerns aside, there still remains a lingering theory that older Americans either don't need or don't want to work. This too is untrue. According to AARP, 3.5 million people aged 55 and older were below the poverty line in 1985—with the rate being higher for those older than 65. That translates into nearly one-fifth of the older population. Indeed, for many older workers, there's great financial need to gain employment.

Plus, many want to work. They like the idea of dipping a foot back into the labor pool, or even remaining there for the long haul. In a 1981 Louis Harris poll, 79% of those aged 55 to 64 and 73% of those older than 65 said they'd prefer to work part time. In a 1983 AARP survey, 74% said they'd prefer working to retiring. The stance was still strong in a 1988 AARP study, in which 40% to 50% said they'd work past retirement age if they could have flexible schedules, part-time and temporary employment.

So the first step is an important one: Acknowledge and dispel the myths about older workers. Educate yourself and your company. "One main issue is awareness," says Fyock. "Sometimes it's just talking about these kinds of things in a discussion group or in a classroom setting. People will suddenly realize that they've been operating with these kinds of assumptions or biases or stereotypes. HR people really do need to get educated on the issues of aging and an aging work force."

Recruiting older workers: Unleash your creativity.
Just as you'd alter your recruiting approach for college students or working mothers, companies must adjust their efforts to attract older employees. Consider what they want (flexible working hours, for instance) and where to find them (older communities, for example).

One company that takes these ideas seriously—to its success—is Clearwater, Florida-based Home Shopping Network (HSN), a cable television company. Calling itself an "electronic retailer" that broadcasts 24 hours a day to more than 70 million American households, the company has tremendous staffing needs for people to answer phones and take orders for merchandise.

"We needed a flexible part-time work force to answer the telephones during the peak periods," says Mount Burns, a company HR representative. "We're located in an area where there are many retired folks who need and want a little extra income. We knew they were there, but we didn't know how they'd get hold of us."

In 1990, the company established Prime Timer, a program that invites people older than 55 to become part of their work force. It encourages them with policies such as flexible and part-time jobs and by recruiting practices that systematically seek out seniors.

Burns, himself 67 and formerly retired, took on the task of recruiting. First, the local television station ran spots publicizing the company's needs. Then Burns visited the various community agencies that served older adults, such as the senior-citizen centers at each of the county's seven or eight cities. Burns contacted each center's director and developed slide presentations to show people exactly what the job entailed. He worked with the Chamber of Commerce, and he also attended Senior Job Fairs and placed ads in local newspapers. Basically, HSN combed the area for potential applicants.

The company has been successful—both in quantity and in quality. Its first training class, which began on March 21, 1990, had 12 people; today more than 500 individuals have come through the Prime Timer training program. Burns himself moved from a two-day-a-week slot to a full-time human resources position and a role as the Prime Timer coordinator. In addition, according to Burns, the Prime Timers who were hired in 1992 had a 30% lower turnover rate than other hires—and these are individuals who range up to 84 years old.

HSN's recruiting success is largely a result of its commitment to and understanding of the older population of workers. The company creates policies that address their needs for varied schedules and responsibility, and it recognizes that mature individuals are a very diverse group and require different recruiting techniques.

It's important to remember that although some recruiting generalizations can be made about older workers, individuals in this group are as varied as any other large segment of the population. They include people who are in mid-life career changes, early retirees, older retirees, displaced workers and people who've never worked outside the home before. Each group has its own motivations to work and benefits needs. In addition, each group has its own concerns about Social Security benefits and how those will be affected by employment (see "Part-time Work Protects Social Security Benefits").

Fyock, who had years of experience developing programs for older workers at Louisville, Kentucky-based Kentucky Fried Chicken, suggests that recruiting messages are extremely important. Mature adults work for several reasons—financial needs, security requirements, social needs and self-esteem. Recruitment messages should not only segment the market, but also speak to those needs. These messages can be presented at a variety of venues such as job fairs, through direct mail or via a hotline.

For instance, Fyock helped develop strategies that located older adults in the course of their daily activities. KFC made presentations at senior centers, at coffee-klatch meetings, at mall-walker groups. The company targeted certain neighborhoods in the community that had pockets of older people.

"Generally, HR people have never targeted older adults," she says. "In fact, the whole notion of targeting [seniors] may be new and unique. So you want to focus your thinking on how you can reach older adults, what they're doing, what their daily activities are like and how you can reach out to those individuals. You even can create messages that are appealing to them."

Oak Brook, Illinois-based McDonald's Corp. has long been admired for its success in targeting mature individuals. And so it should be. Company founder Ray A. Kroc was 52 when he established the company in 1955. McDonald's ReHIREment program was formed in the '80s when the company recognized the employee shortage it was facing. Now ReHIREment entices older individuals to rejoin the work force, or to join it for the first time, as in the case of many homemakers. "We looked at other markets and found that we already had many successful older workers in our restaurants, and we could probably find ways to recruit more," says Barry Mehrman, employment development consultant for McDonald's Corp.

But McDonald's had to overcome some interesting recruiting challenges. For instance, one of the corporation's unique aspects is that approximately 40% to 50% of its employees are young—in high school and college. Mehrman says that when young managers in their 20s sit down to interview someone old enough to be their parent or grandparent, it may be awkward. To alleviate that problem, the company works with the managers to rehearse scenarios. It also adjusts some of its selection questions. For instance, it isn't much use to ask a 65-year-old who's coming out of retirement to work part time what his career goals are or what he wants to do in the future. "We found you really don't need to approach it like that when you're interviewing," says Mehrman. Instead, McDonald's developed specific recruiting materials to help older candidates talk about how they can share their skills and experience with others; they sell McDonald's as a career opportunity based on scheduling flexibility and the fact that they help individuals so they don't jeopardize their Social Security earnings.

To minimize older workers' fears of moving into the work force, McDonald's also sets up a buddy system so that each older worker has someone to help acclimate him or her to the way things are done at McDonald's. Workers can choose one restaurant position that they're particularly interested in, or they can choose to learn a variety of positions. The company's approach to recruitment works: Today, more than 40,000 senior employees serve McDonald's customers worldwide.

Training: Establish adult learning goals.
Regardless of age, training and retraining employees ensures that they remain up to date on new skills and refreshed on old ones. Training older workers isn't too far a reach from training younger ones. Many companies use this three-pronged strategy:

  • Continually training mature workers who've remained in the workforce
  • Training new hires
  • Training supervisors on how to manage older workers.

Continued training is key for workers as they mature on the job. According to AARP, the three common mid-career problems that lower productivity are career burnout, career plateauing and career obsolescence. These can be alleviated substantially by career management and effective training.

The first situation, career burnout, requires early diagnosis and intervention. It can be helped by job redesign or rotation, since burnout is usually associated with high-pressure jobs. Temporary assignments, reassignments as mentors or trainers, stress management training and sabbaticals also can be of use.

Career plateauing can be addressed by assigning employees to projects that use their special skills. For instance, if an individual is skilled at sales but has been doing it for many years, the person could be assigned to a new advertising campaign for the company. This way the employee continues to sharpen his or her skills—but in a new way with a new approach. In addition, alternative career paths, as well as opportunities for training and development, can also thwart career plateauing.

Career obsolescence requires retraining to sharpen existing skills or supply new skills. Other solutions are to encourage employees to take classes to keep up with new developments, join professional organizations and consider career contingency plans. Employers may also consider offering career-planning workshops or starting an information center.

When it comes to training new hires who are older, the process isn't actually too much different from training new hires who are young. Find out what areas they need to work on, and then jump in. For instance, AARP studies show that many managers view older workers as lacking technological skills. But that didn't stop HSN from hiring them. The company designed a very specific training program to teach people who'd never used a computer before exactly how to handle the data entry the business required. In addition, the company reminded managers that training older workers shouldn't be approached too differently than any other training. "We put a lot of supervisory personnel through a [sensitivity] course so they would know how to react to these individuals and how they should be treated—not as school children but as adults," says Burns.

In general, when training and retraining older workers, remember this: While adult learners have different needs, most older adults thrive in a friendly, supportive learning arena. They need to know why they're learning something, what they're learning and how to apply it. Adult learners need to build on past experiences. The challenge is to incorporate all of these aspects into a creative, supportive learning climate.

You can best create this climate by following these five suggestions:

  1. Identify employees who need training and help with career development
  2. Motivate employees to take advantage of training programs
  3. Improve flexibility and capacity of employees to learn new skills
  4. Modify training to accommodate employees with special needs
  5. Determine cost-effectiveness of training and employee development.

McDonald's McMasters programs, active in California and Washington, D.C., provide training exclusively for older workers. Candidates are screened through state and local agencies (including the Department of Aging and AARP), and referred to the company for interviews. The program includes coaching by McDonald's managers, who provide one-on-one training for these candidates for a four-week period. They also receive classroom instruction, operational demonstrations and training in a variety of positions. They learn how to use the restaurant's computerized cash register system, and how to make salad and cook fries. Orientation for all workers lasts about two hours, and the training focuses on hospitality skills and customer service—two areas that older workers tend to excel at anyway. "From a generational standpoint, people who are in their 60s and 70s are absolutely outstanding when it comes to being friendly and offering quality service," says Mehrman. At the end of the program, McMasters employees have a graduation ceremony. They're then integrated into the work force at the restaurant at which they were trained.

But managers must also undergo training if older people are to successfully acclimate to the workplace. McDonald's recognizes this fact: Like HSN, the company provides sensitivity training to restaurant employees and managers to dispel myths and answer questions about older workers. McMasters managers are encouraged to schedule team-building sessions involving older workers, other restaurant employees and the management team. "We try to create a family feeling in the restaurants, and one of the important aspects of that is respect," says Mehrman.

McDonald's managers also are trained to recognize the different management issues regarding mature workers. For example, mature workers tend to have a lot of social needs. For management, this means that supervisors must be trained to look for different goals that older people may have. Mehrman provides an example: "We promote internally. So a lot of young people learn skills and want to move up. That's different for someone who's coming back after retirement to work part-time. So, you're not going to say, 'Gee, you're doing a great job, do you want to be a swing manager?'" They may not want that additional responsibility or time frame.

However, managers must also be trained to keep an eye on older workers who want the opportunity. In the Chicago area, for instance, McDonald's hired a retired international banker who'd worked all over the world. He was originally hired as a regular crew person but then decided that he wanted to become a recruiter. He's now working full time doing recruiting and building relationships with schools and other organizations.

Managing and retaining seniors: Know what's important.
Managing and retaining mature people is another facet that requires HR know-how. Fort Worth-based Texas Refinery Corp. is respected for its policies regarding seniors. Indeed, the company's No. 4 salesperson is 74 years old—and this employee isn't alone. With a sales force of more than 3,000, the company has held on to 500 members who are 60, 70 and 80.

Company President Jerry Hopkins will tell you the reason the company works so hard to hold on to its older workers is pure business. TR believes that older people are more inclined to be self-starters and interested in establishing long-term relationships with clients. "Their age is immaterial to us," says Hopkins. "We put a great deal of value on life experience, and we think that in relationships, often an older, more experienced person probably has a distinct advantage."

Most of these older individuals are hired as independent contractors who receive commissions and benefits based on their sales. Many work demanding full-time schedules—such as Bill Shapiro, a 75-year-old sales representative who has been with the company 31 years. The definition of self-starter, he averages 55 hours a week, drives 100 miles a day and can drive as many as 300 to 400 miles to do business. Shapiro still climbs ladders to do roof inspections of industrial buildings.

Others take advantage of the independent contractor status to work flexible, part-time hours to protect their Social Security. This option is a key provision to Texas Refinery's retention. According to AARP, one of the most significant factors that stands in the way of employment is that older workers are forced to choose between full-time work and retirement. They express a preference for phased retirement and reduced work schedules.

As Texas Refinery illustrates, flexible work arrangements that can be adjusted by each individual are an important component of retention. Companies can use a variety of flexible options, from job sharing and on-call work, to part-time and phased-in retirement.

But flexible work arrangements are only part of retaining older workers; another is an atmosphere that respects and values seniors. A corporate culture that accepts and encourages aging workers describes Los Angeles-based Good Samaritan Hospital. Take Inez Hamilton, for instance. She may be 76 years old, but you'd never know it by the work she does. As an instrument technician for Good Samaritan Hospital, Hamilton is responsible for the exacting and critical task of cleaning and preparing surgical instrument trays. Day after day, from 2 p.m. to 10 p.m.—and sometimes more—Hamilton cleans and sorts scalpels and scissors, forceps and needles. The great-great-grandmother of four continues to be so skilled that the cardiac surgeon she worked with previously called her out of retirement to work for him again when he changed hospitals.

The hospital's embracing attitude is one that keeps older workers around. Says Margaret Hambleton, director of compensation and benefits: "Many of the people who work directly with patients tend to stay in the positions much longer. We have many employees who've been with us for 35 years, and we appreciate having employees who continue to remind us of our history. We encourage our older workers to stay on with us."

How does the hospital encourage them? Although the administration is careful not to compromise patient care, it helps to create an environment that accommodates some physical limitations of the older worker. For example, a nurse's aide will help move a patient or change bedsheets for a mature individual who has trouble with those strenuous activities.

The hospital also keeps a close eye on pay equity for its work force—15% of employees are older than 55; 6% are older than 65. Although the company works with a merit-based pay system, Hambleton says that it's careful to be sure the pay levels for senior workers keep up with those of the younger staff. At one time, younger workers tended to be "leap-frogged" in and often were put at higher rates. This was especially true with nurses who were in serious demand.

That kind of pay environment no longer exists at the hospital; Hambleton says it now makes a special effort to maintain pay equity. The hospital does an annual performance review and, at the same time, determines that salaries of long-time employees don't lag behind younger—or newer—workers. While pay is merit-based, Hambleton and the director of human resources go through the entire employee population by hire date, seniority and number of years of experience to ensure that salaries are fair—that individuals don't fall behind simply because they're with the organization longer.

Perhaps most importantly, the corporate culture simply values seniors. For example, during the hospital's cultural-diversity week, it highlights older workers as part of the cultural richness. "We talked about some of the needs of the older worker, and about making use of older workers. [We talked about] their history at the hospital and using them as mentors. It was really an education," Hambleton says.

The hospital also sponsors a mentoring program that works informally to acknowledge the experience of seniors. "All patient care people require a mentor as they go through their orientation. They go through a period of up to six weeks during which they have a buddy who's one of the best performers and someone with a lot of knowledge. Often our older workers [act as buddies]."

Just as many younger people have concerns about interviewing people twice their age, so can younger-to-older management raise some concerns. Joan L. Kelly, manager of the Business Partnerships Program at AARP, explains that this is, in fact, a major management hurdle. "Sometimes you find younger managers saying, 'I feel like I'm supervising my mom or dad,' and they feel a little remiss to do that. But, we need to remember there's respect due on both sides. Age has nothing to do with it. It gets back to respecting all employees and being even-handed with your treatment of everyone."

Says Fyock: "One of the biggest issues is that different aged workers tend to share certain value systems based on the beliefs at the time in which they grew up. Younger workers tend to share a [core of similar] values; older workers do as well."

One of the big problems with managers is that they sometimes don't understand differences that are generationally based—yet to effectively manage, they must acknowledge them. Fyock recalls a time at KFC when many managers were so accustomed to the value systems of young people that when older adults entered the work force with different values and different ways of looking at work, they needed to completely rethink how to manage those individuals.

For example, young people almost always responded positively to a participative management style, whereas older adults sometimes found it a little confusing. "First of all, participative management may not have been used throughout their years in the workplace," says Fyock, "and also they have a very strong ethic of respecting authority. They may even feel that participatory management is almost an abdication of authority."

Furthermore, she says, older adults generally place a high importance on work. They see it as a duty, a responsibility, an important part of their life. Younger adults may tend to see work as a means to an end. It should be fun, it should be exciting, it should be more than just the work itself. Their views about authority may also be vastly different. "We talk about how young people see authority as a sort of necessary evil, something that must be tolerated, something that also should be questioned and challenged. Older adults tend to see authority as something to be respected and valued."

When you have differences like these, it's important that everyone recognize them. Moreover, young managers need to understand the influences and backgrounds of their different employees and understand those biases when attempting to manage them.

Yes—even in retention and management, much of the key to success resides in dispelling prejudices about mature employees. The AARP recommends that age stereotypes can be overcome through education, communication about the problem, participation in task forces to investigate the problem, rewards for managers who fully train and utilize the talents of older individuals and strict enforcement of age discrimination regulations. In situations in which younger people supervise older workers, AARP suggests a frank discussion and open communication between the two. It also suggests that one way in which younger people may overcome problems is to utilize the older employee's expertise. For instance, if the older person has a background in teaching, the younger person could ask for some input on a company training program.

What's the bottom line on all this? Brush up on marketing your company to older workers, rethink your current policies and re\examine your beliefs about mature employees—because HR professionals are going to need the skills to work with older people. "In the next 15 to 20 years, one out of every four employees is going to be over the age of 55. It means a whole new workplace for us, with a whole new set of needs. It's going to be a very big issue," says Fyock.

So open your doors to these workers. Invite them to the table. You can't afford to keep them on the fringes any longer.

Personnel Journal, October 1995, Vol. 74, No. 10, pp. 56-66.