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The Aging Workforce

This essay will focus on the aging of the workforce and how this demographic shift will impact the human resource function in organizations. The primary focus will be on workers in the United States, as many from the baby boomer generation are nearing retirement age. Feinsod & Davenport (2006) explained that a variety of possible scenarios may occur over the next five to ten years, ranging from a massive shortage of workers as baby boomers exit the job market to a lesser impact if baby boomers continue working past the traditional retirement age. As the workforce ages, employers must utilize innovative techniques to attract and retain older workers, while simultaneously balancing the challenges of managing an intergenerational workforce. This essay will review how older workers can enhance an organization’s success by using their lifetime experience, the reasons older workers plan on working beyond a traditional retirement age, how productive older workers are in comparison to younger workers, and how organizations can balance the value of an older workforce with the potentially higher costs associated with injuries and insurance.

Reasons underlying the older worker boom

Arnone (2006) argued that two major factors influenced the aging workforce, including an increased life expectancy and growth variances of different generations. By 2030, one in five Americans (20%) will be aged 65 and older, compared to the current rate of 12.4% (Arnone). The potential implication from a shrinking labor pool may cause employers to experience difficulty in finding talented workers as older employees exit the workforce. Furthermore, it is estimated that workers over the age of 45 will comprise approximately 42% of the U.S. population by 2030 (Haight & Belwal, 2006). The main concern with an older workforce revolves around safety and productivity issues, as older individuals lose some cognitive and physical ability with age (Haight & Belwal). The challenge for today’s organizations is to create systems that ensure the talent of older workers is retained, while also keeping related health costs low.

Financial needs also plague older workers, adding another factor to the increased number of those working past traditional retirement age. Wellner (2002) discussed how two thirds of older boomers aged 48 to 56 have failed to save enough for retirement. A scant 20% of older workers are highly confident that they will have enough money to comfortably retire, requiring the majority of older workers to remain in the labor force longer (Wellner). Wellner argued that better health care, and the boomer generation’s enhanced awareness of how diet and physical activity affect well being, will allow many older workers to continue being very productive workers. Arnone (2006) described how changes in society’s view of retirement and work in general have impacted older workers, explaining that these new views make working past the traditional retirement age more acceptable as the norm.

Lindquist (2006) estimated that in the next two to ten years, a large percentage of the workforce will be retiring and this will make it hard for organizations to meet the needs of their clients. However, there is a beneficial outcome for older workers resulting from the demand that will be in place for their knowledge in the future. As Lindquist explained, while older workers were passed over for jobs or promotions in the past, the most enlightened CEOs understand the need to retain these workers to utilize their knowledge and talent. Computerworld (2006) explained that seventy five percent of older workers surveyed in the IT field indicated they would like to work at least part time into retirement. Although the majority of older workers want to work beyond traditional retirement age, many indicated they didn’t want the same amount of responsibility and instead expressed an interest in working for a new employer (Computerworld). This is a promising figure, especially because younger workers have much experience to gain from their older counterparts.

Benefits from the older worker

The greatest benefit the older worker can provide any organization is their experience, which simply can not be replaced in a quick fashion by younger employees. As Lindquist (2006) suggested, progressive organizations will quickly transition and try out new techniques to retain older workers, especially since they could open new businesses and compete directly with their old employers. Available data suggests that older workers are more than willing to continue working; Arnone (2004) reported that in 2004 69% of men and 54% of women aged 55 to 64 were working or looking for work. With over half of the older workforce still gainfully employed, organizations must ensure they capitalize on this talent and use it to their advantage. As Lindquist explained, many college students would jump on the opportunity to be paired with an experienced counterpart on the job. The benefit of pairing the experienced older worker with a young employee possessing a positive attitude for work could yield massive benefits to the employer harnessing this opportunity (Lindquist).

Griffiths (1999) argued that it is the best interest of employers worldwide to retain older workers since governments will be challenged to support an increased number of workers with a smaller workforce. Arnone (2006) explained that only 29.8% of surveyed organizations have an understanding of business wisdom, yet two thirds of organizations have systems in place to capture and transmit the wisdom of older workers to younger ones. This subject represents a potential disconnect between understanding and transmitting value between older and younger workers. Based on the available data, organizations still have many opportunities to capitalize on the talent and knowledge held by older employees, especially since so few of them seem to understand what knowledge is most important to transfer among employees.

Generational Differences

Dittmann (2005) explained that a poor level of understanding among individuals of different generations can severely impact their ability to communicate and work productively. Dittmann’s observation stresses the importance of maintaining positive intergenerational relations and highlights that role human resources must play to ensure that the different generations of workers are more easily able to relate to one another, share ideas, and enjoy the benefits provided from their different life and working experiences. As Molas (2006) argued, each generation carries a unique attitude and set of expectations towards work. Employers must seek to understand these differences and utilize the strengths inherent within each generation to undermine any potential weaknesses that could stifle productivity in the workplace.

Thiedke (1998) pointed out that older workers believe their younger counterparts to be pompous, materialistic, and hypocritical; however, younger workers tend to assume the same of their older counterparts. It is crucial that organizations dispel these assumptions and create an environment that encourages employees, regardless of their generation, to work seamlessly with one another. Gittlen (2007) explained that it is important for companies to ensure they have a healthy balance of younger and older workers, not only to avoid claims of discrimination but most importantly because a diverse workforce offers a melting pot of talent for organizations to utilize.

Older workers bring business acumen to the workplace that may not be ingrained in the mindset of younger workers (Gittlen, 2007). It is imperative that older workers teach younger employees the broad concepts of their career area and organizations that fail to embrace this notion will be setting themselves up to fail subsequent generations of workers that aren’t provided experiential knowledge. Miller (2004) suggested that the most effective way to address generational differences rests in communicating information in multiple ways, especially accounting for the technological savvy of younger workers and the more formal communication preferences of older workers. A survey by the Society for Human Resource Management on generational differences survey report stated, “Communicating in a variety of ways increases the likelihood that workers within and among generations receive the information in a way which they are comfortable with” (Miller, p.1). As a result, companies that are aware of the different communication preferences of workers will stand to reap the greatest reward of employee cooperation and increased productivity throughout the business.

Dan Gingras, a partner at an executive consulting firm, suggests that employers should create a working environment that allows for a “cross fertilization” of skills (Gittlen, 2007, p.1). Putting younger workers with older ones that have matching skills may be the key to success in allowing intergenerational differences to work advantageously (Gittlen). Organizations that encourage younger workers to integrate with their older counterparts are doing the right thing from a strategic and ethical perspective. Gittlen argued that the key to avoiding age discrimination doesn’t come from assuming that everyone is equal but through the acknowledgement of generational differences. Although there may be differences in work style and ethic among older and younger workers, organizations can experience benefits that help every generation of worker succeed when it is acknowledged and fine tuned.

Feinsod and Davenport (2006) revealed interesting information when they reported that a 2003 study found that workers aged 55 and older scored seven points higher than the youngest demographic aged 18-29 in regards to employee motivation. Additionally, younger workers are more likely to become disengaged with their employer; only 8% of workers aged 29 and younger described themselves as highly engaged on the job versus 22% of workers aged 55 and older (Feinsod & Davenport). These findings substantiate the need for organizations to retain older workers, especially since they are more motivated on the job. Additionally, human resource professionals should aim to determine how older workers can impact the opinions and attitudes of younger workers towards their work, especially in regards to employee motivation. Organizations that ensure knowledge, skills, and attitude are transferable between younger and older employees will be able to extract the maximum value out of their entire workforce.

The different worker generations are unified in their desire to have a work/life balance. As Molas (2006) explained, many older workers quickly tire of working long hours coupled with nights, weekends, and holidays. The key to fulfilling not only boomers’ but every generation’s needs may rest in employers creating working arrangements that allows for equanimity and a better work/life balance. Older workers cite a desire to spend more time with their families, despite a pressing desire or need to continue working (Molas). Thus, companies that take this important aspect into consideration will be able to extract the greatest value out of every worker they have, despite what generation they belong to.

Motivation in older workers

There are many stereotypes in the workplace today regarding older workers and it is important these are dispelled if organizations expect to get the best value out of the older worker. Lord & Farrington (2006) explained that older workers have been described as lacking flexibility, resisting new technology, and unwilling or unable to learn new skills. Mary Ballas, a 63 year old Staples employee and ex-retiree, refuted these claims, explaining that older workers such as her are more than willing to adapt to changes in the workplace but simply need extra guidance to understand new technology (M.A. Ballas, personal interview, February 27, 2007). Lord & Farrington supported this conclusion, explaining that the turnover rate for older employees is far less than that of younger workers. Further, older workers are just as willing to learn as their younger counterparts (Lord & Farrington). Interestingly, in a study conducted by Roper Starch Worldwide for Randstad North America, the number one work priority among older workers involved trying new things on the job (Lord & Farrington). Sadly, Lord & Farrington reported that a study conducted by AARP found only three out of ten companies included older employees in their training programs. These findings show that a major disservice is being done to older workers, despite the fact that they rank learning and adapting to change as some of the most important factors contributing to job satisfaction. As a result, organizations need to utilize the information already discovered and create a nurturing environment for older employees by allowing them to experience continuous growth and learning in the workplace.

Lindquist (2006) asserted that it is in the best interest of any organization to retain older workers containing “extremely well developed talent,” especially since younger workers can learn more from them than they would in traditional training programs (p.4). Many organizations grapple with how they will retain older workers or attract new ones after retirement. Lindquist suggested that companies offer ex-retirees part time or consulting options, which allows the older worker an opportunity to still contribute value to the organization while not requiring them to work full time. Options such as this can be used to help increase the motivation of older workers on the job and assure they will remain with an organization long enough to create value. Coombes (2006) reported that a Towers Perrin survey of 35,000 workers at large companies found that worker motivation actually increased with age, despite assumptions that the opposite was true. It may be difficult for organizations to offer alternative working solutions for older workers but the inherent value brought into a company by the older, more motivated worker should be factored into any related cost the company is considering.

Older employees have much more to offer companies, aside from higher motivation levels. As Coombes (2006) explained, many business leaders assume that innovation is tied to the youthful worker, which is accurate but fails to consider the talent older employees can bring to the table. However, companies can play the differences in innovative talent among older and workers against each other in a complementary fashion. Younger employees often procure ideas that break traditional rules, whereas older employees can utilize their longevity and experience to make changes that are less risky and more calculated (Coombes). As a result, it is important for companies to recognize that older employees can still innovate but they may do so differently than younger workers.

Balancing the risks

Taylor (2006) explained that many employers see hiring older workers as a double edged sword: They can bring a variety of benefits to the workplace as a result of their experience but the possibility for increased healthcare costs and losing talent to retirement is a concern. Van Yoder (2000) discussed how older workers experience fewer injuries than younger ones, but their injuries are usually more severe in nature. Although there are fewer injuries among older workers, the fact that injuries are more severe can present a risk to employers, especially since it tends to cost more to treat more severe injuries. The time older workers that are injured spend away from work is also longer than younger employees, averaging ten days for those 55 and older compared to 4 days for those 24 and younger (National Academy of Sciences, 2007). Although older employees tend to be away from work longer when they’re injured, organizations should not forget the added value they can add to the workplace.

McMahan & Sturz (2006) pointed out that changes in health as a result of aging does not always mean performance will be significantly affected. The fact that older workers believe organizations deserve their loyalty more than younger employees can provide some peace of mind to organizational leaders worried about the increased risk of employing older workers (Lord & Farrington, 2006). It is important to note that there is no irrefutable claim that older workers are safer or more productive than younger workers and there is no proof of why this is the case, based on data from the Bureau of Labor Statistics (Haight & Belwal, 2006). More research in this area will be necessary to draw a solid conclusion, based on available data, to discern with complete assuredness whether or not older employees are less of a health risk to an organization.

As McMahan & Sturz (2006) explained, current research has found that intervention programs designed to maintain the health and minimize the impacts of aging on the older worker are beneficial. As a result of the current evidence available, employers shouldn’t discount the opportunities older workers have to add value to their companies until more research provides conclusive evidence in favor or against employing older workers. Even if such evidence works in favor of employing younger workers, organizations must remain cognizant of the Age Discrimination in Employment Act or risk legal sanctions (Arnone, 2006). Haight & Belwal (2006) suggested that organizations shouldn’t count older workers out, especially since they offer a great deal of opportunity to train younger workers with their experience. Haight & Belwal recommended that organizations make accommodations in the workplace, of which many are inexpensive and require little or no training. It is important for employers to take a proactive stance to ensure working conditions are created that reduce the likelihood of employee injury, especially with older workers.


Many managers and organizational leaders may find it difficult to handle the aging of the workforce, especially since the issues to consider are multifaceted in nature. Haight & Belwal (2006) argued that workplaces must accommodate older workers in the future, as they will comprise a larger portion of the workforce. The shortage of talented workers will present the greatest threat to companies in the future. Taylor (2006) explained that once the pool of qualified employees begins to decrease when baby boomers retire, organizations may see older workers’ loyalty as a valuable opportunity. Companies that encourage younger workers to gain experience from their older counterparts stand to gain a competitive advantage, especially against those that fail to act.

There is a major concern among employers about the increased cost of healthcare associated with older workers. Coombes (2006) pointed to the fact that extra healthcare costs can be easily offset by the lowered costs organizations incur as a result of turnover. This greater benefit to an organization from a cost standpoint is a major consideration that organizations must take into account when determining if older workers have value to them. Lindquist (2006) suggested that planning is of primary concern when dealing with fewer employees in the workforce. If experienced employees are planning on retiring, it would be smart to ensure they can transfer as much knowledge as possible before leaving (Lindquist). In this instance, preparation for an event that is happening and will continue to occur well into the future may mean the difference between profitability or financial losses for organizations throughout the United States and world.

It is in the best interest of organizations in any type of business to consider the value older workers present them. The strength of their experience and their willingness to learn are valuable traits that can be passed down to future generations. Additionally, the fact the older workers are more motivated than younger workers can prove highly beneficial to the business, not only in terms of a better working environment but in profitability as well. As Coombes (2006) detailed, companies with highly engaged workers exceeded their industry average revenue growth. It not only makes sense for companies to ensure they do everything possible to attract and retain older workers, but common sense can translate into cents, something every business leader is sure to turn his or head about.

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