A demographic shift has taken place in the workplace. For some employers, this shift has the potential to represent the perfect storm if not addressed. Approximately 10,000 baby boomers are reaching full retirement every day, but that doesn’t mean these individuals plan to retire in the near future.
Why Are Some Older Workers Staying on the Job?
What some employers may not realize is that many older workers cannot afford to retire. The great recession, insufficient retirement investments, the likelihood of having to finance two or three additional decades of living, and rising healthcare costs may have affected the financial side of retirement readiness for many workers.
Other older workers will continue to stay in the workplace because they are not psychologically prepared to exit. For today’s workers, the notion of retirement means something much different than it did for previous generations. We’ve entered the era of longevity. Workers need to have an idea of what the next twenty, thirty, or more years will look like for them. They need to know how they’ll find a new identity and a sense of meaning after they leave the workplace. And they will also need to prepare for one of the biggest transitions they will ever face.
With a growing number of older employees hanging onto their jobs, what does this mean in the workplace?
- Studies have suggested that outdated stereotyping of older employees is common in many workplaces. Such stereotypes include the belief that older workers are uninterested in learning, they aren’t interested in technology, and they are generally out of touch.
- Some may believe that older workers tend to ‘coast’ their way to retirement. It is true that the majority of older workers might be disengaged. Results of a 2014 Gallup Poll revealed that 68% of workers between 50-59 were not engaged or actively disengaged at work. The same poll found that 65% of workers between 60-68 were not engaged or actively disengaged. However, a 2016 Gallup Poll found that younger workers were the least engaged as employees. In fact, 71% of younger workers were disengaged or actively disengaged. In addition, younger workers changed jobs more often than older workers.
- Particularly in environments where work spaces are open, the social connections younger workers might share with each can highlight a lack of belonging among older workers.
- Results of a recent poll also reveal that between 40-44% of younger employees between 18-49 believe that the aging workforce is a negative trend. With this underlying attitude about an aging workforce, the fact that the Equal Employment Opportunity Commission reported 60% of older workers have seen or experienced age discrimination. Ninety percent of older works said age discrimination is common.
The bottom line is this: Unless addressed, stereotyping, a lack of inclusion, discrimination, and a lack of engagement can adversely affect how older employees perceive the workplace environment and psychological atmosphere—the organizational climate. The perceived organizational climate can affect motivation, productivity, and workplace behavior. Older employees may also feel ‘pushed out’ of the workplace before they are ready to leave. This is the perfect storm that employers need to address.
What are some ways employers can more effectively work with older employees?
The Equal Employment Opportunity Commission recommends that employers define what they want from their employees. For example, is the goal to retain older workers because of their knowledge and expertise, or is the goal to help them transition into retirement?
If the goal is to retain the older workforce because of their experience and expertise, then the Gallup organization recommends appealing to the psychological needs of these workers to maximize motivation. For example, recognizing the insights of older workers may increase engagement.
Older workers can use their expertise by helping mentor younger and newer employees. They can also engage with other employees through reverse mentoring.
Addressing ageism as part of diversity training for all employees is another important step employers can take to create a more positive work environment for all employees. According to a survey from the TransAmerica Center for Retirement Studies, only 23% of employers specifically address age as part of inclusion training.
If the goal is to phase out the oldest workers, then providing all employees with needed information on both the financial and nonfinancial aspects of retirement can help prepare workers. One study suggested that only 11% of employers offered any education about transitioning into retirement.
In addition to offering financial planning workshops, helping employees prepare for the nonfinancial aspects of moving beyond work is important. Feel free to use the free planning guide I’ve prepared to get started.
Offering modified work schedules or duties as employees gradually phase out of the workplace can also help older employees prepare to leave the workplace. Yet research suggests only 1 in 10 large employers offer this type of phased-retirement approach.
Addressing the realities of an older workforce can benefit everyone concerned. Doing nothing is not an option!