As the US workforce undergoes a labor shortage, tapping into this key demographic can help employers BUILD RESILIENT TEAMS.
The American economy has been downright jumbled over the last few years, defying patterns and precedent.
First, the pandemic ground local economies to a halt and prompted mass layoffs. Unemployment rates approached record highs, then record lows — leaving employers scrambling to hire amid a subsequent labor shortage. Workers have been seeking more autonomy and improved conditions, leading to power shifts that some called “the Great Resignation” and others later characterized as a “Great Reshuffle.”
These seismic changes are happening against the backdrop of broader demographic trends: a fast-growing aging population. Nearly half of the country will be in their 40s or older by 2040, according to research from the University of Virginia.
Workers above 65 make up the fastest-growing segment of the labor force, according to the US Bureau of Labor Statistics (BLS). In fact, the only age group whose labor force participation is projected to rise in the next decade are those ages 75 and older.
At the same time, the rising cost of living is requiring Americans to work later in life. A Gallup survey from 2017 found that roughly 3 out of 4 U.S. adults intend to remain employed past age 65. In a country with steep health care, long-term care, and housing costs, winding down one’s career by 65 feels out of reach for many.
Highlighting overlooked talent
What do all of these coalescing trends mean for talent development teams? There are more than 10 million available jobs but only about 6 million unemployed workers to fill them, according to November 2022 data from the US Chamber of Commerce. While mass layoffs and hiring freezes before the holidays are compounding the current volatility of the labor market, the aging workforce is a fact that hiring managers must acknowledge as they build out their plans for upcoming years.
Whether employers are contending with hiring freezes or looking to fill key roles amid the current labor shortage, hiring older workers — defined as workers age 55 and older, according to the BLS — presents a double-edged solution that can benefit employers and employees alike.
Recruiting and retaining this overlooked population is a crucial strategy not only to fill these gaps, but also to integrate a valuable demographic into the workforce.
Employers need to view aging workers as an opportunity to build more diverse and representative teams that reflect the American population — and propel our businesses forward. Too often, older workers are cast aside, overlooked or treated as a liability. Instead, we see these workers are key assets that are vital to continued workforce growth, industry innovation and talent development over the long term.
Incorporating anti-ageism into DEI initiatives
When it comes to where American companies land on age-inclusive hiring and workplace retention, where are we right now? The short answer: not where we should be.
Most American companies don’t integrate anti-ageism training into their HR strategies and DEI programs. While 64 percent of CEOs surveyed by PwC reported having diversity and inclusion initiatives in place, a mere 8 percent include age in those efforts. Microaggressions in the workplace can present in everything from insensitive language to policies that effectively push older workers out of their jobs.
Many companies have made much-needed strides in recognizing and dismantling biased hiring practices, particularly regarding anti-racism initiatives and support for LGBTQ+ workers. Since the murder of George Floyd and rise of the Black Lives Matter movement, leaders have become more explicit about expressing their values. HR teams have been focused on rebuilding their policies from the ground up.
This has translated to thinking about talent development and retention in innovative ways, including dismantling hiring procedures that perpetuate bias and developing new recruitment strategies. This approach is not just the right thing for business leaders to do, but also is necessary for doing business. In a job-seeker’s market, companies have a responsibility to prove that they are inclusive, secure, and safe places to work.
However, many employers have a long way to go in integrating older generations. Two out of three older workers have seen or experienced age discrimination, according to an AARP report. Ageism hurts companies’ bottom lines and stunts broader economic growth: age discrimination cost the U.S. $850 billion in GDP in 2018, according to the report — a figure the size of Pennyslvania’s economy.
Companies cannot afford to lose potential talent right now and miss out on investing in this demographic. Breaking down age bias will help organizations during this labor shortage, as well as help to develop the talent that will lead and sustain organizations in years to come.
Why recruiting older workers gives companies a competitive edge
Employers face an opportunity to bring myriad benefits to their organization by hiring experienced and older workers. To start, this demographic can help companies improve longevity and retention: about 2 in 3 workers between ages 45 to 54 stayed at their jobs for more than two years, according to NerdWallet. On the other hand, more than half of workers between ages 25 to 34 left their jobs within two years.
What’s more, research shows that employees in a higher age bracket tend to have a wider range of skills than younger workers. A study of small businesses in New York City highlighted how older workers, in particular, tend to have deep experience, a strong work ethic and can share crucial knowledge with colleagues, according to research from Columbia’s Aging Center and School of Public Health.
Given that many older workers have pursued a range of roles across industries, they’re well-positioned to bring informed perspectives to the table when it comes to problem-solving, decision making and execution. Moreover, such insights can translate to entrepreneurial pursuits: MIT’s Pierre Azoulay and his colleagues found that entrepreneurs over the age of 40 are three times more likely to set up successful companies.
Above all, research demonstrates that mixed-age teams are more motivated than those with workers of the same age, according to research published in the American Psychological Association in 2020.
How to attract and retain older workers
For workplace leaders, maximizing the potential of older workers to contribute, reshape organizations, and drive growth is contingent on creating policies and practices to support them.
First, employers must evaluate their hiring processes and identify opportunities to break down age bias. Are there systemic inequeities — such as ageism and discrimination — or other barriers that hiring managers must address? For instance, what are the communication tools that your hiring team uses to interview recruits? Are your platforms and communication software accessible? Are your healthcare, family leave policies and EAP programs comprehensive? What kinds of accommodations do you offer for employees with disabilities?
It’s also important to think about what older workers want to optimize for in job opportunities — and how you can meet those needs. Here, a few key themes emerge to attract top talent:
- Provide flexibility. Since the pandemic, American workers across generations have been demanding more flexible schedules. This is no different for older workers. Remote work was the most popular form of flexibility sought by professionals over 50 surveyed by FlexJobs, a site for remote and flexible job opportunities.
- Create opportunities for mentorship and engagement. Older workers are critical to training the next generation of business leaders. Many are interested in mentoring colleagues. Facilitating these relationships can increase older employees’ engagement and demonstrate that companies value their expertise.
- Offer upskilling opportunities and continuing education. Consider (and directly ask) what kind of enrichment may appeal to your older workers and tailor opportunities accordingly. Workers later in their careers might be less interested in another promotion to climb the ladder, but might be keen to use their skills in new ways. Businesses should keep tabs on their employees’ interests and upskilling goals, according to Jerry W. Hedge, program director at RTI International, a North Carolina-based research institute.
Age-inclusive strategies are the next frontier of hiring equity
Amidst the tumultuous economic climate and ensuing labor shortage, employers need to invest in older talent. Dismantling ageist practices will help organizations boost their talent pipelines, improve employee retention and build more effective teams.
Companies need to consider how to design and implement policies to support employees at various life stages — and offer the benefits that older workers want.