Workforce Planning: Aging and Employment

Module 1: Background

Barbara McIntosh, Ph.D., SPHR 2010

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Module 1: Learning Objectives

At the end of this module students will be able to:

• Appreciate the characteristics of normal, successful aging.

• Understand the legal and social policy backdrop for the aging U.S. labor force.

• Discuss the labor force dynamics facing older workers and employers.

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Learning Objectives Continued

•Recognize changing perceptions about aging and contribution in society.•Identify the issues confronting employers regarding older workers.•Understand the effect of age on work role.•Outline necessary changes in HR policies and practices with respect to aging workers.•Explain the economic incentives and disincentives to work confronting aging Americans.•Analyze employment options and the applicability of international examples.

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Suggested Texts

• Leibold, M., & Voelpel, S. (2006). Managing the Aging Workforce. Germany: Wiley-VCH.

• Rothwell, W.J., Sterns, H.L., Spokus, D.& Reaser, J. (2008). Working Longer. New York: AMACOM.

• Hedge, J., Borman, W., & Lammlein, S. (2006). The Aging Workforce. Washington DC: The American Psychological Association.

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Essential Resources: Professional Associations

Society for Human Resource Management (SHRM), www.shrm.org.AARP, www.aarp.org.Gerontological Society of America, www.geron.org.National Council on the Aging (MaturityWorks Alliance),www.ncoa.org.American Society on Aging (Business Forum on Aging), www.asaging.org.Association for Gerontology in Higher Education (AGHE), www.aghe.org. Chamber of Commerce, Institute for a Competitive Workforce, www.uschamber.com. Urban Institute, www.urban.org.

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The Current Pulse

Government sourcesU.S. Department of Labor: The Women’s Bureau and the Bureau of Labor Statistics

Governmental Accountability Office: Administration on Aging, etc.

Clipping service• Daily clipping service of where aging issues

appear in the worldwide press: Current Awareness in Aging Research E-Clippings (fiss@ssc.wisc.edu).

Modules Overview

• Background.

• Labor markets.

• Aging employee perspective.

• Employer perspective.

• Managing productivity.

• Careers and aging workers.

• Economic considerations; incentives and disincentives to work.

• International perspectives.

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Module 1: Background

• Introduction:> Why are we concerned?> Definitions.

• Forces extending work life.

• Forces restraining work/life extensions.

• Overview of demographics/context.

• Normal aging and health.

• Stereotypes.

• Age discrimination issues.

• Legislative proposals.

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Aging and Employment: Why Is HR Concerned?

• The economic downturn means people are working longer and delaying retirement.

• Shifting demographics.

• Predicted labor shortages (even with the economic downturn; industry-specific).

• Brain drain and organizational learning.

• Improvements in life expectancy mean more workers are productive in later life.

• Pensions and health care financing.

• Intergenerational issues and HR policies and practices.

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Definitions

• What is old?> Perception.> Legal definition.> Behavior.> Cohorts.

• What is work?> Productive activity.

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Forces That Extend Work Life

• Economic necessity (older employee).

• Psycho-social needs (older employee).

• Better jobs (knowledge workers).

• Flexibility (hours) availability.

• Increased work/life balance emphasis.

• HR policies (employer).> Labor shortages, particularly in the health care

industry.> No mandatory retirement age.

• Government policy.> Social Security viability.

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More Americans Are Working Longer

• Between 2000 and 2008, the number of workers aged: 65 to 69 increased 25 percent. 70 to 74 increased 32 percent. 75 to 79 increased 38 percent. 80 and older increased 67 percent (BLS, 2009).

• Living longer and public expectations about retirement are in transition (Pew Research Center).

Men’s Participation in the Labor Force

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Women’s Participation in the Labor Force

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Forces Restraining Extension of Work Life

• High unemployment.• Slow-growth economy.• Changing skill mix in demand.• Youth culture.• Hiring and retention practices.• Increased labor costs.• Labor union policy (in some cases).• Intergenerational conflict.• Negative stereotypes about older workers.

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Demographics

• In 2000, there were 35 million Americans aged 65 and older in the U.S., representing 1 in 8 Americans.

• By 2030, 1 in 5 (20 percent) will be 65 and older.• The increase is due to the baby boom; 76 million

Americans were born between 1946 and 1964.• The “old-old” (85 and older) is the fastest growing

cohort.• Decreasing fertility: The “baby bust.”• Gender gap: Women outlive men. At age 85, there

are 41 men for every 100 women.• Diversity: In 2000, 84 percent were white. It is

forecast that this will drop to 64 percent by 2050.

Number of Older Americans

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Number of Older Americans

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Educational Attainment

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Poverty

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Life Expectancy

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Projected Demographic Shift

Ratio of population age 20 to 64 compared to age 65 and older. (Those working to those traditionally not working.)

Source: Congressional Budget Office Based on Social Security Administration Data

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Normal Aging: Health

• Physical:> Strength.> Reaction time.> Senses.

• Mental. • Psycho-social. • Self-perceptions (social-cognition).

Respondent-Assessed Health Status

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Future Expectations on Health

• Behavioral changes, e.g., smoking cessation.• Self-perception changing re: physical and mental

conditions.• Continuous improvement in availability of

preventative care.• Changes in societal/market/organizational

responses to health limitations.• Medical advances, e.g., joint replacement and

continued activity.

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Factors Influencing Health

• Economic security, including the opportunity to work.

• Access to preventative care.• Education.• Family relations (care giving, support, stress).• Social cognition (perceived role in society).• Community support.

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Life Expectancy of 65-Year-Olds Over Time

Source: Congressional Budget Office based on Social Security Administration

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Commonly Held Stereotypes

“To be old is to be sick”

~ 50% of American believe health is a “very serious problem” for individuals over age 65

Reality?

[See: Palmore, E. (1999). Ageism. Springer Publishing]

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Commonly Held Stereotypes (continued)

• Older people have more accidents.

Reality?• Mental abilities decline with age.

Reality? • You can’t teach an old dog new tricks.

Reality?

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Commonly Held Stereotypes (continued)

Older workers usually cannot work as effectively as younger workers (Palmore, 1998).

Reality?

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Age Discrimination in EmploymentAge Discrimination in Employment

• Increasing prevalence:Increasing prevalence:> 24,582 age discrimination cases filed with 24,582 age discrimination cases filed with

EEOC in 2008 (a 30 percent increase over EEOC in 2008 (a 30 percent increase over 2007). This represents 26 percent of all 2007). This represents 26 percent of all discrimination cases.discrimination cases.

• In 2004, the cost of negotiated settlements in In 2004, the cost of negotiated settlements in federal age discrimination complaints totaled federal age discrimination complaints totaled $69 million (AARP, 2006).$69 million (AARP, 2006).

• In 2002, 67 percent of surveyed workers 45 to In 2002, 67 percent of surveyed workers 45 to 74 (n=1500) reported that they believed there 74 (n=1500) reported that they believed there was age discrimination in the workplace was age discrimination in the workplace (AARP, 2003). This dropped to 60 percent in (AARP, 2003). This dropped to 60 percent in 2007 (AARP, 2008).2007 (AARP, 2008).

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Types of Employment DiscriminationTypes of Employment Discrimination

An AARP survey showed that:An AARP survey showed that:> Nine percent of respondents reported being Nine percent of respondents reported being

passed up for promotion or a chance to get passed up for promotion or a chance to get ahead because of age.ahead because of age.

> Fifteen percent of respondents reported not Fifteen percent of respondents reported not getting hired for a job applied for because of getting hired for a job applied for because of age.age.

> Six percent of respondents reported being Six percent of respondents reported being laid off, fired or forced out of a job because of laid off, fired or forced out of a job because of age.age.

> Five percent of respondents reported being Five percent of respondents reported being passed up for a raise because of age.passed up for a raise because of age.

Source: AARP, 2002Source: AARP, 2002

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Legal SourcesLegal Sources

• Bill of Rights/Constitution.Bill of Rights/Constitution.• Civil Rights Act 1964.Civil Rights Act 1964.• Age Discrimination in Employment Act (ADEA) Age Discrimination in Employment Act (ADEA)

1967.1967.• Future:Future:

> Americans with Disabilities Act (1990).Americans with Disabilities Act (1990).> Case law.Case law.> New legislation.New legislation.

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Age Discrimination in Employment ActAge Discrimination in Employment Act

• Right to gainful employment has long been Right to gainful employment has long been recognized. Originally passed in 1967 with a recognized. Originally passed in 1967 with a mandatory retirement age 70, it was amended mandatory retirement age 70, it was amended in 1987 to eliminate mandatory retirement. in 1987 to eliminate mandatory retirement.

• Use of an individual’s age as a criterion for Use of an individual’s age as a criterion for employment is generally forbidden; only where employment is generally forbidden; only where age is a bona fide occupation qualification age is a bona fide occupation qualification (BFOQ) may it be used as a factor in (BFOQ) may it be used as a factor in employment decisions.employment decisions.

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ADEA ProtectionADEA Protection

• Covers workers 40 years of age and older.Covers workers 40 years of age and older.• Applies to organizations with 20 or more Applies to organizations with 20 or more

employees.employees.• Applies to organizations engaged in interstate Applies to organizations engaged in interstate

commerce.commerce.• Does not cover bona fide executive or high Does not cover bona fide executive or high

policy makers (attained the age of 65 and held policy makers (attained the age of 65 and held the position for two years) if entitled to a the position for two years) if entitled to a retirement benefit of at least $44,000.retirement benefit of at least $44,000.

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Unlawful Employer PracticesUnlawful Employer Practices

• To fail or refuse to hire or discharge any To fail or refuse to hire or discharge any individual or otherwise discriminate against individual or otherwise discriminate against any individual with respect to his or her any individual with respect to his or her compensation, terms, conditions or privileges compensation, terms, conditions or privileges of employment because of the individual’s age;of employment because of the individual’s age;

• To limit, segregate or classify employees in To limit, segregate or classify employees in any way which would deprive or tend to any way which would deprive or tend to deprive any individual of employment deprive any individual of employment opportunities or otherwise adversely affect his opportunities or otherwise adversely affect his or her status as an employee because of the or her status as an employee because of the individual’s age; orindividual’s age; or

• To reduce the age rate of any employee in To reduce the age rate of any employee in order to comply with this chapter.order to comply with this chapter.

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ExceptionsExceptions

• Age as a bona fide occupational Age as a bona fide occupational qualification.qualification.

• Other reasonable factors.Other reasonable factors.

• Laws of a foreign workplace.Laws of a foreign workplace.

• Seniority system.Seniority system.

• Employee benefits system.Employee benefits system.

• Discipline or discharge for good cause.Discipline or discharge for good cause.

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Court InterpretationsCourt Interpretations

• Applicants must be judged on non-age Applicants must be judged on non-age related issues:related issues: Courtney v. Biosound, IncCourtney v. Biosound, Inc., 42 F3rd 414 (7., 42 F3rd 414 (7thth Cir. 1994).Cir. 1994).

• Promotions must be based on merit:Promotions must be based on merit:Barber v. CSX Distribution ServicesBarber v. CSX Distribution Services, 68 F. , 68 F. 3d694 (33d694 (3rdrd Cir. 1995). Cir. 1995).

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Court Interpretations (continued)Court Interpretations (continued)

• It is illegal to terminate an employee due to It is illegal to terminate an employee due to age considerations:age considerations:Benjamin v. United Merchants and Benjamin v. United Merchants and Manufacturers, IncManufacturers, Inc., 873 F.2d 41(2nd Cir. ., 873 F.2d 41(2nd Cir. 1989).1989).

• It is illegal, with exceptions under ADEA, to It is illegal, with exceptions under ADEA, to force an employee to retire:force an employee to retire:Verbracken v. Westinghouse Electric CorpVerbracken v. Westinghouse Electric Corp., ., 881 F.2d 1041 (11th Cir.1989). 881 F.2d 1041 (11th Cir.1989).

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Labor Market RealitiesLabor Market Realities

• You are over qualified.You are over qualified.• This job would not be a good fit for you.This job would not be a good fit for you.• The job has been filled.The job has been filled.• We will keep you posted.We will keep you posted.

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Educate All RecruitersEducate All Recruiters

• Recruiters and interviewing managers should Recruiters and interviewing managers should be sensitized to conscious and unconscious be sensitized to conscious and unconscious stereotypes.stereotypes.

• Focus should be on job description and Focus should be on job description and required job performance.required job performance.

• Interviewing teams should include at least one Interviewing teams should include at least one mature worker.mature worker.

• Screening materials and tests should be Screening materials and tests should be printed in 12-pt or 14-pt type.printed in 12-pt or 14-pt type.

• Screening materials and tests should allow for Screening materials and tests should allow for variation in completion time.variation in completion time.

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Tips for the Older Applicant Facing Tips for the Older Applicant Facing DiscriminationDiscrimination

• Options: Walk away or educate (flight or fight).Options: Walk away or educate (flight or fight).• Prepare :Prepare :

> Network: Contacts could be respected Network: Contacts could be respected community members, business associates community members, business associates and former bosses. Who do you know?and former bosses. Who do you know?

> Do your homework: Be articulate about Do your homework: Be articulate about financial position, growth profile and financial position, growth profile and development opportunities. What do you development opportunities. What do you know?know?

• Present with a smile.Present with a smile.• Other??Other??

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The Bottom LineThe Bottom Line

• The economy is pushing older workers to The economy is pushing older workers to remain in the labor force.remain in the labor force.

• American workers are living longer, healthier American workers are living longer, healthier lives.lives.

• Expectations about work in later life are Expectations about work in later life are changing.changing.

• Stereotypes about older workers still exist.Stereotypes about older workers still exist.• The legal environment and the increasing The legal environment and the increasing

numbers of older workers mean that numbers of older workers mean that discrimination must be actively addressed.discrimination must be actively addressed.

• The business environment needs to change in The business environment needs to change in response to the aging workforce.response to the aging workforce.