The Great Recession is pushing older workers to postpone retirement, but will employers accommodate them?
Demographics dictate that the workforce will age in the years ahead. By 2016, one-third of the U.S. workforce will be age 50 or older, compared with 28 percent in 2007, according to AARP.
But the current brutal jobs climate raises questions about the future prospects of older workers. The jobless rate for adults age 55 to 64 has more than doubled since November 2007, just before the recession began; in July, 7.2 percent of workers age 55 to 64 were out of work. That's a troubling number, although it's still about 2.5 percentage points lower than the overall national rate of 9.7 percent in August.
Even in a tough economy, older workers are valued in some industries. Technology-oriented companies that depend on experienced scientists and engineers are worried about brain drain as the baby boomer generation retires. Many are scrambling to implement retention programs aimed at keeping these high-value knowledge workers on the job as long as possible. Some offer flexible work arrangements to accommodate the changing lifestyle needs of older employees.
Companies say older workers are among their most productive, and that this offsets their higher compensation and benefit expenses. One study several years ago for AARP, for example, attempted to quantify productivity and cost advantages of retaining and hiring older workers by showing that turnover and training costs can exceed 50 percent of a worker's annual salary, while higher compensation and benefit costs for older workers were only marginally higher than for younger people.
At the same time, there's strong evidence of age discrimination by employers on the hiring and firing side. As I noted here recently, age discrimination claims filed with the Equal Employment Opportunity Commission were at a record high in 2008, and researchers have been able to establish that it's much harder for older workers to land job interviews.
Against that backdrop, it's instructive to see employers compete for the honor of being age-friendly. AARP conducts an annual contest culminating in the Best Employers for Workers over 50 award; the 2009 winners were announced earlier this month.
The AARP award offers a snapshot of the most age-friendly large employers in the country. Employers submit comprehensive applications, answering questions about their human resources practices and policies. The selection criteria include recruiting practices; opportunities for on-the-job training; education and career development; flexible work arrangements; and employee and retiree benefits, such as pensions.
One lesson I draw from the winners' list is that best employment practices for older workers are being implemented in a somewhat narrow range of economic sectors. This year, 40 percent of the top 50 come from education, government and the non-profit sector. The financial service sector was another big winner, grabbing 20 percent of the age-friendly awards.
Some of the names popping up at the top of the list include Cornell University, the Massachusetts Institute of Technology and S.C. Johnson and Son, Inc. After that, it's a potpourri of technology and service companies.
What's the best way to identify prospective employers that are age-friendly?
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