Becoming the employer of choice: anticipating and preparing for a graying workforce in industry.

The recent shift in the labor force that has occurred in many developed countries has been greater than any shift prior to 2020. This shift was caused by reduced birthrates coupled with the rising percentage of mature workers in the labor force, compounded by the 2020 global shut-down due to Covid-19. Managers and HR directors need to act now to gather the necessary data on their employees and their company's projected labor needs to accurately plan for their short- and long-term labor needs. A partial solution for this impending labor shortage is for companies to proactively become the "employer of choice" for their graying workforce by making necessary accommodations to retain and recruit mature workers. The concept of employer of choice relates to creating a work climate that attracts and retains workers to a specific employment opportunity. This article focuses on the steps that can be taken by employers to minimize the impact of this looming labor shortage on their company as well as on the overall economy. The article also provides background on some of the reasons why many mature workers want and need to continue working and the imperatives as to why immediate action on the part of employers is necessary.

Introduction

Despite high levels of unemployment since the beginning of the 2008 recession and the precipitous drop in employment following the Covid-19 lockdowns in March 2020, many organizations are currently experiencing chronic shortages of trained workers. The Project Management Institute (2022) summarized data from 38 countries who are members of Organization for Economic Cooperation and Development (OECD) and they reported that 20 million fewer people are working post pandemic and in select countries almost half (49%) of employees are considering leaving their current employers this year. This labor shortage is expected to continue and may worsen in the near future. The 2014 Conference Board Report predicted continuing labor shortages over the next 15 years for the U.S. economy (Levanon et al. 2014), while the overall labor force is expected to grow at a tepid rate of 0.05% per year (Toossi 2013). The most recent unemployment numbers from the U.S. Bureau of Labor Statistics showed unemployment rates hovering around 6% compared to the 3.5% pre-pandemic (Anon 2021a, b).

Management teams must act now to plan and prepare for these projected shortages of workers over a broad spectrum of industrial sectors in the decade between 2020 to 2030 (Strack et al. 2014). To address these anticipated labor shortages, companies need to explore an array of methods and sources of available labor to recruit and retain more of their older, mature, skilled employees. Retaining current, mature employees is, of course, one obvious solution to minimize these labor woes.

Complicating this dramatic drop in the number of available workers, is the fact that most retired workers are living longer. After its implementation in 1935, the United States (U. S.) Social Security Act covered most nonagricultural workers and was financed by employee and employer payroll taxes. Inputs have dramatically changed so that in the 20-year period from 1945 to 1965, the worker-to-Social Security beneficiary ratio plummeted from 41 workers paying into Social Security to the current ratio of four workers per retiree. By 2012, this ratio fell below three, to 2.9 workers/beneficiary, and this ratio is expected to continue dropping to two workers per retiree by 2030 (De Rugy 2012). This is indeed a troubling trend for most of the developed, global economies and this downward trend is expected to continue; for example, in the European Union (EU) fertility rate fell below 1.6 babies per couple in 2017 (Anon 2019).

In the U.S., employment among persons ages 55 to 64 has increased to an all-time high of 60.3% of those age groups (U. S. Bureau of Labor Statistics 2020b). Additionally, nearly one in five (18%) of those over 65 years old are continuing to work (Table 1; U.S. Bureau of Labor Statistics 2020b). The number of Americans over age 55 in the labor force is projected to increase from 35.7 million in 2016 to 42.1 million in 2026, and by 2026, workers in this mature worker category will make up nearly one quarter of the entire labor force (U.S. Senate Special Commission on Aging 2017). This growing number of mature, working employees, in concert with the trend to continue working at older chronological ages, is resulting in a dramatic shift in workforce demographics. Concurrently, the number of younger workers in the 16 to 54 age group is expected to remain steady or even decline, leaving growth in the overall labor force largely dependent on increased and continued participation of mature employees aged 65 and older (Eyster et al. 2008). Managers must recognize that mature workers will be a firm’s largest source of labor over the next 20 years. There will be insufficient younger workers for the positions in many organizations, especially in advanced manufacturing skills or advanced education in science, technology, engineering, and math (Paullin 2014). These changing labor demographic trends are even more pronounced in both Europe and Japan (Weeks 2021). Employment within the food industry itself follows this general trend in age of workers (Table 2).

Table 1

Employment and unemployment by age group (2020)

Area	Population group
		Employed		Unemployed
		Total	Percent of population	Total	Rate
United States	Total	147,795	56.8	12,947	8.1
Arkansas	Total	1271	54	85	6.2
United States	Total, 16 to 19 years	4695	28.3	1025	17.9
United States	Total, 20 to 24 years	12,497	59.7	1990	13.7
United States	Total, 25 to 34 years	33,426	74.5	3080	8.4
United States	Total, 35 to 44 years	31,807	77	2177	6.4
United States	Total, 45 to 54 years	30,099	75.5	2042	6.4
United States	Total, 55 to 64 years	25,454	60.3	1839	6.7
United States	Total, 65 years and over	9818	18	795	7.5

Extracted from Bureau of Labor Statistics (2021a, b)

Table 2

Food manufacturing industry employment by age (in thousands)

Industry	Total	16–19	20–24	25–34	35–44	45–54	55–64	65 +	Avg Age
Food as a whole	1672	41	138	393	378	364	278	80	42.1
Confectionary	60	2	1	9	13	12	18	5	49.4
Fruit/vegetable	138	1	11	31	29	34	24	8	43.7
Dairy	136	0	11	32	29	28	30	6	44.1
Slaughter/process	485	9	43	129	122	98	68	16	40.4
Bakeries	193	3	16	49	42	39	35	10	42.4
Seafood	188	3	18	40	37	47	34	9	43.2
Not specified	87	1	5	16	30	15	14	6	43.9

Data abstracted from U.S. Bureau of Labor Statistics (2020a, b)

What about the longevity of the employees within a single company? Some estimates indicate employees from the Boomer Generation, born between 1946 and 1964, will hold an average of five jobs over their working lives compared to Gen Xs, 30- to 45-year-olds, who will average twice that number of job changes. Gen Ys (15- to 29-year-olds) are the real “job-jumpers” and are expected to change jobs every one to two years during their working lives (Tishman et al. 2012). However, other sources disagree. Job switching (known as churn by labor economists) as opposed to actual career changes appears to be higher in Gen Y than X, averaging about four job changes for new Gen Y employees in their first ten years out of college as opposed to two job changes for Gen X in their first ten years out of college (Young 2017). Whichever is correct, younger employees certainly change employers more frequently than did their parents. These broad statistics reinforce the point that employers need hard data to successfully manage their projected individual companys’ labor needs.

Are there other alternatives? Bogataj et al. (2019) examined alternative methods to maximize mature workers’ desire to continue wanting to continue working and how older workers continuing to work minimized their impact on dwindling public pension funds by comparing two alternative investment strategies for a manufacturing sector in the EU. Using data collected in Italy, for alternative one, these authors measured the effectiveness of funding a supportive pension scheme designed to encourage 62-year-old workers to continue to work until age 70. However, they found a far more beneficial alternative two was to invest in personalized, ergonomic support systems such as personal assistive robots termed “co-bots.” They found that creation of mixed-age manufacturing teams, age-specific job assignments that were less physically demanding, and investment in collaborative robots compared very positively to the costs of labor. Investing in ergonomic accommodations allowed mature workers to continue working longer. Bogataj et al. (2019) projected substantial cost benefit for increasing the capital investments to accommodate co-bots that could improve the working environment for their more mature manufacturing workers.

In summary, it is vital for an employer’s executives, management, and human resources teams to understand and appreciate the unique requirements and benefits more experienced workers bring to their organization. Becoming an “employer of choice” for the graying workforce will occur only by recognizing the potential benefits of making the necessary accommodation to attract and retain these valued employees. This concept is a hot topic in the business literature; a recent internet search conducted by the authors in late 2021 resulted in 706 million results.

Methodology

To gain an insight into the solutions for labor shortages and the possibilities of hiring or retaining older workers we searched for studies: (1) assessing the prevalence labor shortages and (2) evaluating the status of older workers. To this purpose we performed a Web of Science© and Google Scholar© search using the following keywords in various combinations: older workers; labor shortage; labor market(s). Reference lists from each relevant paper were examined to determine if any important studies had been missed during the database searches. In addition, a Google search was used using the same terms alone and in combination to capture the so-called grey literature that is more likely to contain foundations’ reports, conference proceedings, dissertations, magazines, etc., as well as in government reports and statistical sources.

Why do older workers continue to work?

Financial need

An employees’ financial need is the number one reason mature employees continue to work, especially since the recession that began in 2008 (Roundtree 2012). Being able to live comfortably in retirement is a basic desire of most workers (Brandon 2011; Moeller 2010). However, changes in U. S. Social Security policies such as increasing the full retirement age to 67 or providing substantially increased benefits if the employee delays retirement to age 70, are governmental policies that actively encourage many employees to remain in the workforce longer (Greenhouse 2012). For many U. S. workers, there have been unanticipated withdrawals from their 401(k) plans and IRAs due to down-turns in the stock market combined with the financial stress caused by the Covid lockdowns, and additional stresses from caring for children out of school, concerns for elderly parents, 40-year high inflation and shortages in necessities that have stubbornly continued despite a better economy (Robillard et. al. 2020; EBRI 2020).

Healthcare concerns for U. S. workers

Many mature workers in the U.S. have expressed their need or desire to retain their employer-sponsored healthcare and related health care benefits as part of the reason for their continuing employment (EBRI 2020; Moeller 2010). While this is particularly important for those aged 55 and older prior to their becoming eligible for Medicare coverage, it is still an issue for those who are eligible for Medicare as that coverage is perceived by many as being less comprehensive and more restrictive on medical coverage than most private insurance plans (Norris 2020).

However, that perception may not be true. Medicare may provide better coverage at a lower cost than many employer-sponsored health plans (DePietro 2021). Premiums for employer-sponsored insurance plans have increased sharply, prompting employers to shift more of the premium costs to the employee, raising deductibles and copays (Stein 2018). In 2018, workers covered by an employer-sponsored health plan paid 18% of their single coverage and 29% of their family coverage premiums (Kaiser Family Foundation 2018), and the average premium for people in their 60s was $1069 or more per month depending on what state they lived in (Price 2021). Although companies can provide guidance to their mature workers as they navigate these complex healthcare alternatives, companies often choose not to do so. Kaiser reported that large employers’ offering retiree health coverage dropped from 66% in 1988 to only 23% in 2015. (SHRM 2022; Kaiser 2022).

Staying active

Several studies have indicated that mature workers want to stay both physically and mentally active; this relates directly to their health and wellbeing, as staying active has been well-established as leading to better health outcomes (Moeller 2010; Brandon 2011; Wickrama et al. 2013; EBRI 2020). Many mature workers may perceive that their jobs provide a level of mental and physical activity that they would not be able to enjoy once they retired. (Moeller 2010).

Work itself

Some mature workers wish to continue working simply because they enjoy their work (Brandon 2011). Moeller (2010) reported that many mature workers wanted to remain busy and feared that retirement would lead to boredom. Nilsson (2012) also observed that working longer is deemed more motivating and more worthwhile than many leisure activities commonly associated with retirement. In short, many mature employees simply love working!

Why should a company retain/hire mature workers?

Most mature workers have found roles that are well suited to their skill sets and thus their levels of engagement (job satisfaction, commitment to job, organizational citizenship) tend to be much higher for these more mature workers than those of younger employees who are still finding their way (SHRM Foundation 2014). Data confirms that employees who are in the “Baby Boomer” demographic tend to work longer, with greater engagement in their work (Harter and Agrawal 2015). Millennials tend to show the lowest engagement levels, likely because they have not yet settled into their maximum productivity niche, and many are still in entry level positions (Harter et al. 2016). Harter et al. (2016) found that engaged workers performed better on most Key Performance Indicators (KPIs), yielding 21% higher profitability, 40% higher quality work output and 10% stronger customer loyalty and performed 70% better in terms of on-the-job safety. The retirement of mature workers with decades of experience in a company’s culture, many of whom are in senior staff or management positions, represents a tremendous loss of deep, long-term, personal relationships with customers, institutional knowledge, problem-solving skills, and knowledge of proprietary business practices (Tishman et al. 2012).

The graying of agricultural and food companies’ workforce

The average age of employees in agriculture and allied industries is 46.9 years, greater than the average age of workers in all other industries (Paullin 2014). Furthermore, Paullin found that the agriculture sector has the greatest percentage (35%) of their current employees falling into the older-than-55-years-old category. The median age for all industries was 42.5 years of age and only half as many (22%) of their employees were older than 55. In contrast, the food manufacturing industry has only 21% of its workers over 55, with an average age of 42.1 (Table 2). Therefore, it is especially imperative for agricultural and food companies to compile the needed data for making contingent plans on future staffing needs for their companies.

Experience is a critical asset skill builder especially in helping resolve human, social and cultural issues; ones that mature workers have in abundance. In addition, mature workers are more likely to possess greater knowledge of human, social, and cultural issues (Backes-Gellner et al. 2011). Human knowledge can be defined as skills or expertise specific to a role, such as a legacy system or tools, while social knowledge relates to interpersonal relationship skills. Cultural knowledge is a combination of understanding of how things get done together with what has worked within a specific organization.

Contrary to common stereotypes that many mature workers are more rigid and have noticeable cognitive decline, research demonstrates that core task job performance is largely unrelated to age and that some skills, such as social skills, actually improve with age (Ng and Feldman 2008; Ng and Feldman 2013). These researchers point out that although speed and ability to multitask often decline in mature workers, older employees are often highly creative and innovative. The net impact of these negative and positive effects of aging seems to be that, while mature workers take longer to complete tasks, the quality of the work is often higher than that of younger workers (Backes-Gellner et al. 2011).

Accommodations for increased disabilities

Creating a safe and productive environment for an increasingly mature workforce may entail making accommodations for an increasing number of disabilities. The goal for employers of choice is to develop short- and long-term accommodations that fill gaps in their labor needs data by changing practices and policies that encourage and support the retention and recruiting of mature workers whose quality of work overrides the possibility of increased disabilities (Tishman et al. 2012). Although many mature employees are very physically fit, several of them will likely have one or more disabilities. However, these disabilities do not prevent them from working and materially contributing to the company’s bottom-line (Kampfe et al. 2008).

In a low-trust employment situation, mature employees may be reluctant to ask their employer for accommodations that would allow them to continue in their present positions. In such a low-trust environment, many employees reluctantly quit their positions, leading to significant loss of job-specific expertise (McMullin and Shuey 2006). Smith (2019) stated that trust must extend in three directions, managers must trust their workers, workers must trust the manager and the workers must trust one another. Managers may destroy these trust relationships by sharing information only with senior management, favoring a few workers over others, not providing clear job expectations, or simply giving lip service to teamwork, but continuing to reward individuals (Smith 2019). Building trust among team members requires managers to brutally examine their own behavior for indications they are destroying trust and stop those behaviors. Managers must give the workers what they need to do their jobs, including information, and promoting teamwork with policies like work sharing, rotation of leads, and cross training (Smith 2019).

Retaining mature employees can substantially reduce turnover costs (Boushey and Glynn 2012). Assessing such costs is a vital initial step for the team charged with compiling future labor needs. While conducting projections of new labor needs throughout a company, hard data should be collected on what turn-over costs your company every time an employee voluntarily leaves the company’s employment. Estimates from the literature on the costs of turnover, based on an employee’s annual salary, cover a huge range from as little as 25% to as much as 250% of their annual salary depending on the skill level of their position (Allen 2010).

Below are the percentage of Human Resources (HR) professionals (n = 1700) who cited benefits their organization maintains by retaining and/or recruiting mature employees (Schramm 2016):

Having extensive work experience 78%

Having maturity and high levels of professionalism 69%

Willing to serve as mentors for younger colleagues 66%

Strong work ethic 63%

Having established networks and client contacts 56%

Having strong critical thinking and problem-solving skills 53%

Excellent reliability 48%

Low levels of turnover 46%

Ability to bring diversity of thought and approaches to team projects 43%

Barriers to retaining and recruiting more experienced workers

Higher salaries and health coverage costs

Universally, all employees need to be appreciated for their unique contributions to an organization. Furthermore, every employee is an individual with unique needs and aspirations. Traditionally, employers have pointed out that there are several challenges related to recruiting more mature employees to fill a vacancy. These challenges may include: (1) potentially paying a higher initial salary in line with the salary this more experienced employee had in the job they recently left, and often this salary is greater than the salary of a potentially less-experienced, new hire; (2) an assumption that there will be an increase in the cost of a mature hire’s health insurance. We will address ways to remediate the potential increased health care and life insurance costs of more mature workers later in this document; (3) the fear that more mature workers’ knowledge and skills may be out of date; and (4) the perceived possibility that employers will fail to recoup their initial training investments in mature employees.

However, much of this traditional bias does not hold-up to the research findings in the literature, given the significantly higher turnover rates among younger employees (U.S. Bureau of Labor Statistics 2020a). As one labor pundit mused about younger staff members—increasing your training budget only to have your (younger) employees go to your competitor is not a sustainable business practice!

Most employers do not actively recruit or hire more mature workers

As we have established, the labor participation facts are clear: there are and will continue to be more and more mature workers making up an increasingly larger percentage of the labor force. It is essential that employers cooperate in actively recruiting and hiring mature workers (Conen et al. 2011). Despite such positive facts, employers are often reluctant to hire more mature workers (Berghoef 2018). Many older workers report that their age is an obstacle to getting a job, an assumption borne out by resumé-correspondence studies which document that younger applicants get interviews at a higher rate than do older applicants (Lipnic 2018). Some companies may consider using “micro-targeting” practices to recruit younger workers; these include using online application systems that include date of birth or graduation dates in fields that cannot be bypassed (Lipnic 2018). However, this is blatantly illegal and should not be considered an ethical business hiring practice. (Anon 2021c).

Need for greater flexibility by employers

Flexibility is important when contemplating strategies which focus on recruiting and retaining mature workers. These strategies must take into consideration a wide range of variables which cover the gamut of managers’ personal biases compared to written company policies. Examples include (Pitt-Catsouphes et al. 2009):

Flexibility on what constitutes a full day of work, including flexibility from the standard, nine-to-five, five-day traditional work week. Workers can use flextime to determine a schedule that balances their work and their personal needs. Other mature employees may opt for longer workdays than 8-h workday to meet an 80-h per two-week requirement.

Flexibility in career paths. Experienced, mature employees can be placed on retainers to be called back for short-term assignments, allowed to take extended leave to care for an ailing loved one, or offered new challenges within the company as its needs change. Many industries have successfully used teams composed of both mature/younger employee members and phased retirement options.

Flexibility concerning the location of where work gets done. Accommodations for working remotely during the recent pandemic has taught many employers that most employees can maintain a high level of productivity working from remote locations. Not only has this flexibility saved countless hours commuting, but it has also had a net positive impact on the environment of the entire planet!

Flexibility in benefits and Deferred Retirement Option Plans (DROPS) programs. Companies with DROPS plans can allow mature workers who are eligible to retire to choose to receive additional contributions to their retirement account equal to the pension they are forgoing by continuing to work.

Age discrimination in employment act

Even after the passage of the Age Discrimination in Employment Act (ADEA) of 1967 in the U. S. more than 50 years ago, there continues to be a lack of protection for many mature workers looking for work and being invited to interview for new positions. (Anon 2021c). Much of this discrepancy is based on the negative biases of some hiring managers that ‘old age is a down-hill slide’ rather than the more realistic approach that aging often brings functional limitations most of which can be mediated with ergonomic, redesign accommodations or focused training (Tishman et al. 2012). With an ever-increasing number of employees being over the ADEA-protected age of 40 years, managers need to be carefully tutored in the provisions of the ADEA Act and state antidiscrimination laws to avoid charges that they may have discriminated. While the number of ADEA suits filed has increased steadily, the established legal bar is that the plaintiff must prove, beyond a reasonable doubt, that age was the only determining factor in the disputed action.

Business rationale for becoming the “Employer of Choice”

Because making accommodations for a graying workforce is the right thing to do, it is prudent that the Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), Chief Human Resources Officer (CHRO), and other C-level managers weigh the cost and benefits of making such accommodations to their Quarterly and long-term Profit and Loss statements. Below are action steps to help managers begin the process of evaluating their current policies to become an employer of choice by actively recruiting experienced employees and establishing an effective process for attracting and retaining mature workers. An initial step, which should be encouraged, is for the executive team to instruct its managers and HR executives to reach out to other employers in their industries and propose that accommodations for a graying workforce be agreed upon as a “noncompetitive” issue like food safety that has been agreed upon to be a noncompetitive issue. In doing so, employers across an entire industry can share insights and techniques that support and achieve their agreed upon objectives. Following is a compilation of successful techniques from several industries.

Appoint and empower an accommodation team

Determine if your currently available data accurately depicts how many skilled and semi-skilled employees in your operation would likely be retiring or leaving the company voluntarily or involuntary in the next one, two, and five years. Search the internet for “workforce planning” or ask your Human Resource department to reach out to their professional contacts for initial guidance. An accurate cost analysis is vital to accurately estimating what projected employee turnover rates at numerous levels will cost your company. Start collecting data on the turn-over/replacement costs at each level within the company. A study by the professional HR association, SHRM found that less than 10% of the HR managers felt their company had analyzed their projected future workforce needs (Pitt-Catsouphes and Matz-Costa 2009). CAUTION: Do not collect information about employees’ ages and do not stereotype employees based on their ages. Only, collect information on the positions and treat all employee information the same. Obviously, there will be a higher likelihood that senior employees may retire, but generally these costs will be offset by the propensity of younger employees to leave for another job.

Conduct an inventory of “critical positions” and the demographics of the persons currently filling those positions. Critical positions are those positions that, if the current employee is no longer regularly contributing to the team, there would be serious negative implications for meeting customers’ immediate needs. Focus on the position, not on the person. Filling the identified gaps will be critical as vacancies occur, and therefore, cross-over trainings, shadowing, and other means of transferring institutional knowledge will probably need to be put in place before the vacancies occur. Initially, just try to get a ‘read’ on the scale and magnitude of the company’s needs. Now is the time to be sure that written job descriptions are in every employee’s personnel file and that they are up-to-date and based on measurable expectations. Part of becoming an employer of choice is to have formal plans to transfer institutional knowledge and encourage collaboration across the entire workforce.

Get the pulse of current employees’ level of engagement and satisfaction by conducting a survey. Be prepared at the outset of this survey to make changes happen to address any uncovered shortfalls. If identified issues are not addressed, the company could lose a substantial amount of creditability with their workforce! Written policies about advancements, layoffs, and the grounds for termination must be based on objective evaluation criteria. Pay special attention to the unequal impact any potential layoffs would have on protected groups, including mature workers. Employers must recognize that if there is a ‘perceived unequal impact’, they may be asked to provide evidence in court that their plan was based strictly on non-discriminatory factors (Tishman et al. 2012).

One of the end points of this initial labor assessment is to gather and continually review all necessary data and mechanisms required to make timely decisions about employee needs and to create a dynamic, cloud-based human resource system that can be easily queried by hiring personal and management. What resources need to be committed to make a dynamic labor database a reality and what time frame is realistic?

What does diversity at all levels of management and hiring look like? Whether there is a diversity plan in place, or you need to initiate such a plan, be sure to incorporate it into your assessment protocol, assuring that diversity based on age is a primary criterion.

What are the risks and associated cost impacts, over a time frame from short through long-term? In addition to estimating the cost for implementing the needed changes, it is also important to make an accurate assessment of the costs associated with inaction. Is doing nothing or making a puny effort that could be considered perfunctory or symbolic a viable alternative? Why or why not? Are there issues that need to be declared “outside” this initial scope that will require longer term analysis?

Be proactive

What steps does a company need to take immediately to provide additional accommodations for loyal, long-term employees? What changes need to be made so they can continue to contribute? Can you attract recent retirees from allied industries who wish to continue to work? Exploring and finding answers to these questions pushes your organization closer toward becoming an employer of choice.

Once you have the data, the real work can begin. Steven Covey (1989) in his book, 7 Habits of Highly Effective People instructs managers to ‘keep the end in mind’, have clearly defined objectives of what it is that you want to accomplish and have an accurate way accessing progress toward those objectives. Realistically, what does ‘keeping the end goal in mind’ look like for the management of your company? Measurable objectives, timelines, and resource commitments need to be put in place, so the accommodation team knows what the employer of choice for a graying workforce looks like for your company? A measurable, reasonable set of objectives should include action steps in sufficient detail, identifying which person or team is responsible for accomplishing each portion of an objective, and the agreed-on delivery dates. (See writing SMART objectives at https://www.samhsa.gov/sites/default/files/nc-smart-goals-fact-sheet.pdf.

The three “R’s” recruiting, retention, and retirement (benefits)

The following questions need to be considered. What changes need to be made in the current HR policies to target the recruiting of senior employees? What recruitment methods are most effective for this population? What resources are most likely to attract senior workers looking for jobs? What changes are most meaningful to current senior employees that will encourage them to stay? Eaves et al. (2015) made the point that it is imperative to seek and implement suggestions from the employees themselves. In their research with construction workers in the UK, their findings encouraged construction companies to work together to institute needed changes and ensure these accommodations can be sustained across the entire construction industry. Another example of accommodation is a well-known food processor with maximum seasonal sales between Thanksgiving and Christmas followed by a seasonal shutdown. This employer gives mature employees special “snowbird” vacation time and ability to use their accumulated vacation and overtime to maintain their income during the company’s long winter break.

Companies should think long and hard before implementing long-used tactics which may be found illegal and are unwise. Firing employees right before they meet their pension requirements, for example, not only plays havoc on a company’s ability to become an employer of choice but can also have hugely negative impact on the public’s perception of an otherwise good company. With the wide-spread use of social media, this misstep can cost a company dearly.

It is highly recommended that management team members, from line-managers through the C-level, receive focused training or a refresher course on legal issues to avoid age discrimination claims as they seek employees. Managers must have a working knowledge of basic HR laws, principals, policies, guidelines, and written company practices. In addition, each manager should thoroughly understand laws that pertaining to job announcements, including how to state the requirements, including required physical, educational, or experiential demands.

Managers may want to consider using the services of a third-party provider to offer classes that would assist older employees on topics such as financial literacy, online investment opportunities and/or financial planning. To do so, consider whether the classes should be face to face or online. Also, managers would be wise to figure what the cost/benefit ratio of increasing the employer’s contribution to an employee’s 401(k) as the employee ages to encourage longer retention of these knowledgeable employees.

Complying with the spirit and intent of ADEA

As noted earlier the ADEA of 1967 was written to encourage employers to hire employees based on their qualifications and to retain those workers without prejudice or assumptions about their age. It has been amended to strengthen numerous provisions over the past 60 years. The law specifically protects those workers 40 years old and older (Lipnic 2018). This Federal law is only part of the legal requirements of which employers need to be made aware. There are typically State mandated antidiscrimination laws that may be even more stringent than ADEA.

The Federal Equal Employment Opportunity Commission (EEOC) is charged with enforcement authority in this area. An employee who believes that they have suffered an age discrimination action is first encouraged to make reasonable efforts to resolve their complaint with their employer. If those efforts are unsuccessful, the employee must initially file their complaint with the EEOC before being permitted to sue their employer in Federal court. After the EEOC conducts their examination of the facts in the case, they make their findings known, and if they decide there is merit in the case, EEOC may seek to enforce compliance within the statute by conciliation, a conference, or other means of persuasion. All the EEOC’s actions must take place within the prescribed time frames. If this stage is not successful and the complaint moves into court, the complaint needs to be based on either (a) disparate treatment—that age was the only factor in making the contended decision and typically the intent to discriminate on the part of the employer must be established or (b) disparate impact—where an action did not have age as a determinant but there has been unreasonable harm to an employee in a protected class, those over the age of 40.

Initially, the employee has the burden of proof to provide sufficient evidence to establish a Prima Facie case supporting their age discrimination claim. Then the burden of proof shifts to the employer to provide legitimate, non-age-discriminatory reasons to reject the claim. This is where timely and accurate written company records are imperative. Upon substantiation of the claim of age discrimination, the plaintiff is permitted remuneration and the collection of their attorney’s fees and costs.

Complexities are far reaching under these Acts. Currently, the Act permits employers to impose mandatory retirement deadlines on senior executives, firefighters, and law enforcement officers. ADEA prohibits discriminating in favor of younger employees over mature employees, but it does not prohibit favoring mature employees over younger employees when both are in the protected classes and are over 40 years old. Again, being aware of the provisions of ADEA and state antidiscrimination laws is important, as is seeking competent legal advice on specific cases.

An employee’s perception that they have suffered age discrimination is an insufficient basis for filing an EEOC claim. This coupled with many employers’ propensity to avoid the age discrimination topic entirely often make for a confrontational situation. This has resulted in an increasing number of age discrimination lawsuits; however, they are very difficult to win (Selmi 2000). Other authors found evidence of age discrimination in hiring in a study of 40,000 applications to job postings that seemed to discriminate more against older women than older men (Neumark et al. 2015).

There is a graying workforce which likely exists in every company whether large or small. Ensuring that this group is recognized and identified as a part of a corporation’s diversity plan elevates the needs, options, and opportunities of these mature employees. Ask questions, especially of employees, about what changes in specific company policies and management practices need to be made to accommodate mature workers and incorporate necessary changes into the company’s diversity hiring plans. Is a formal review of all hiring practices warranted at this time? The truth is, creating, evaluating, reviewing, and updating the company’s workforce preparation plan is something every manager must recognize as a Key Performance Indicator for their job.

Planning for adjustments in health care costs and benefits

Examples of other factors that need to be evaluated during this initial assessment are the health care and wellness benefits offered by the company up-to-date and competitive? Health insurance is a major expense for many companies. As noted earlier in this paper, mature workers may offer specific proficiencies compared to younger workers (e.g., greater dedication to work, experience and age-related intellectual and personality development). However, mature workers have more self-reported health problems and more long-term absences due to illness (Niedhammer et al. 2008; Streb et al. 2008). At the same time, mature workers have lower accident rates than younger employees, which can be very costly per incident (Shishlov et al. 2011; Schwatka et al. 2012). Additionally, mature workers are more at risk regarding the occurrence of fatal accidents; in 2019, 38% of work fatalities in the U.S. were in workers over 55, as compared to 20% in workers 45 to 54 years old (U. S. Bureau of Labor Statistics 2020b). Approximately 40% of individuals ages 55 to 64 and 62% of individuals ages 65 and above have two or more chronic health conditions, compared to only seven percent of individuals ages 18 to 44 (U.S. Department of Human Services 2017).

Mature employees becoming entrepreneurs

A significant number of mature employees seek career-changes that involve going out on their own and living the dream of being their own boss. Self-employment increases from about one in five full-time employees to one in three for men as they approach their initial retirement age and for women from about one in ten to one in eight becoming self-employed. In the past, senior executives have been required to sign non-compete contracts with former employers that specify the time frame and areas in which the former employees are forbidden to begin a new career. However, this practice has recently been curtailed by the Biden administration and therefore, should be subject to review to be sure a company is in current compliance (Segal 2021).

Chase (2011) has an entire chapter titled “The Role of Re-Entry in the Retirement Process,” in which he pointed out that about one in eight (15%) of mature workers who were relatively younger, held college degrees when they first retired, and were in better health, were more likely to re-enter the labor force after an initial retirement. Seniors who reentered the labor force tended to have access to capital, often their own personal savings, and have held white vs. blue collar positions. Those with encore careers vs. retirees permanently leaving full-time employment tended to have higher incomes, were less dependent on state and federal public support, and continued to produce goods and services rather than requiring them. Women tended to be slightly younger than men and were able to continue working, 48% vs 45% of those more mature than 63 years old (Chase 2011). This gender difference was reversed in the case of self-employment with about 35% of men in this age category being self-employed vs only 16% of the women (Chase 2011). Peralta (2021) determined that 20% of retirees had been asked to return to work by their former employer due to the lack of qualified applicants. However, although 41% were willing to return to their former employer and 69% said they would rather seek a job with a different company or even in a different field (Peralta 2021). This may reflect poorly on the working conditions or the way the employee felt they were treated by their previous employer.

Chase (2011) found that another driving force was the decrease in defined pension benefits. As the number of defined benefit-type pensions declined, so did the number of those who remained in retirement after their initial retirement. Chase’s research (2011) showed that 42% of men who remained out of the labor force after their initial retirement had defined benefit pensions to undergird their initial retirement decision vs. 22% of former full-time employees who had defined contribution-type pensions. This uptick in self-employment is part of a reversal of the trend that had held sway for more than a century in which American males continued to retire at earlier ages than their predecessors. Workers with college degrees in 2016 retired three years later than did their counterparts in 1980, but for those with less than college degrees, the increase was only 0.2 of a year in the average retirement age, perhaps due to their jobs being more physically demanding (Law 2020).

Business rationale for differential health care policies

Most business leaders are under increasing pressure to hold health care costs steady as their labor force aged. There has been a debate as to the application of (a) equal benefits basis for health care benefits that may be set aside for (b) an equal cost principle as applied to mature and retired employees on company health care policies. As a cost-cutting measure, some employers have provided one level of health care costs to employees under the Medicare eligible age and a second level that reduces or eliminates some health care coverage when employees or retirees become Medicare eligible. Typically, HR managers have borne the brunt of negotiating with health care providers, considering self-funded plans, increasing employee deductibles, and/or adding surcharges for spousal and family coverage. Each of these cost-saving measures must be carefully weighed before implementation to estimate their negative vs positive impact on the goal to recruit and retain mature employees. Additional options include offering individual employee-directed health plan designs and incentivizing wellness and exercise provisions such as health screening, health-management programs and/or cessation programs for nicotine or weight control.

A role for higher education

Colleges, Universities, and especially Community Colleges must step-up and take their place as training and education centers, this time for the mature, Boomer Generation, as they train to continue to work, try a new career choice, or volunteer to make their encore careers successful (Wofford 2008). More than 400 university presidents were surveyed to determine the challenges they foresaw impacting their institutions in the next five years (Stokes et al. 2019) The issues they identified included (a) Increasing/new forms of competition for prospective students; (b) declining traditional-age student population; (c) increasing nontraditional (e.g., working adults, degree completers) student population; (d) declining federal and state financial support; (e) declining public confidence in the value of higher education; and (f) geopolitical uncertainty affecting international students (Stokes et al. 2019).

Conclusion

There is no denying it, the available labor force is becoming grayer, and this is a trend that is expected to continue at least into the near future. Employers must make the decision now to allocate the necessary resources so that their managers and HR directors can collect company-specific data on their projected labor needs. To put off making this commitment will ensure that a company will struggle to maintain and recruit the mature workers that could potentially take the company into the future. To become the “employer of choice” for mature workers will take concerted effort, but from all indications, it will be well worth it!