A REVOLUTION in the workforce is creating an underutilized resource: workers over age 50. These workers represent more than a quarter of the U.S. labor force, and that number is expected to climb sharply as the population ages.
For these workers, it would be a boon—financially and otherwise—if they could stay in the workforce for longer. It would also be great for the economy, ensuring we continue to have enough workers to produce the goods and services that society needs. But what’s often overlooked is that hiring and retaining older workers can also be a bonanza for employers.
To be sure, many folks believe otherwise. Facebook co-founder Mark Zuckerberg has declared that, “Young people are just smarter.” The legend of the prodigy business founder took shape in the 1980s. That was the decade when brash, young geniuses like Bill Gates and Steve Jobs took their companies public and became billionaires. Since then, some of the most renowned companies in the world have been founded by people in their 20s, including Amazon, Facebook, Snap and Stripe. Meanwhile, older workers have a reputation for being out-of-sync with technology, lacking drive and resisting change.
But this caricature appears to be a myth. Harvard Business Review crunched the numbers on the average age of successful entrepreneurs, and it turns out to be 45. Admittedly, in software and information technology, founders tend to be younger—age 40, on average. By contrast, in industry sectors like energy and biotechnology, the founders are somewhat older, averaging age 47.
Those middle-aged and older don’t just launch innovative companies. They can also make great employees. True, younger workers often don’t have families, so employers assume they’ll have more time for work, plus they can be paid less. Companies also assume that younger workers are more driven and that they have an innate understanding of technology.
But this picture overlooks the downside of younger workers. They may have greater enthusiasm, but they lack experience. Younger workers are also more likely to switch jobs for modest increases in pay—and that creates significant costs for employers. Every business knows it’s expensive to bring new employees on board and train them.
By contrast, older workers have the experience to know what they bring to the table and the wisdom to turn down a new position that isn’t a good fit. In addition, older workers are generally more dependable and harder working.
In fact, a 2015 study by Columbia University’s Aging Center found that businesses with high turnover typically prefer older workers: “Business after business spoke about older workers being the first ones to arrive for a shift, as remaining focused throughout the day and as people who rarely miss work, even in fast-paced, physically demanding businesses.”
Older workers also bring greater emotional intelligence to their work. As Josh Bersin and Tomas Chamorro-Premuzic explained, “For most people, raw mental horsepower declines after the age of 30, but knowledge and expertise—the main predictors of job performance—keep increasing even beyond the age of 80.”
Indeed, management, leadership and communication skills all continue to develop as we age. On top of that, people who have spent decades learning the first principles of how businesses work, and the rules about what’s an effective method and what’s a waste of time, adapt easily to new institutions and rules.
As Marick Masters, a professor of management at Wayne State University, puts it, “Having an older workforce provides great opportunities for building institutional capital in the workplace. Between great mentorship and the ability to experiment with working arrangements, productivity is boosted.”
Are employers—captive of prevailing myths about older workers—missing out? Andrew Chamberlain, chief economist for Glassdoor, thinks so. In his study on job and hiring trends for 2020, he argues, “Employers who broaden their definition of inclusivity to welcome older workers, and develop the learning programs to make the most of the 65-plus talent pool, will enjoy a strategic hiring advantage in 2020 and beyond.”
Stephen Chen is the founder and chief executive of NewRetirement.com, which offers independent, low-cost online financial planning. The site has helped almost 100,000 people build free plans. Follow Steve on Twitter @NewRetirement.
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Good read. I’m 67 retired for 5 years. I really enjoyed my sales career…I like being retired even more.
Based on my experience companies should incorporate both. I know working side by side with less experience workers challenged me to look at things differently and try fresh ideas. I like to think my experience influenced them too.
I retired from full time work 3 years ago. Since then I have been able to participate as a consultant for a variety of organizations. It can be a great relationship – you get paid an attractive rate to provide your experience and expertise. The company only pays for what they need. The challenge is often the schedule – when they need you they need you, and then you are done. So you need to be flexible about schedule.
Good read, and I hope upper management will pay attention. I worked for a major insurer for 33 years and moved up the ranks, with major successes that helped the company financially far above my salary and benefits. Then one day when I was 61 while on vacation I was told to get on a teleconference where the General Counsel told a group of us that while we have done very well for the company, the CEO has decided to go in a different direction and all of us on the call would see our jobs eliminated. They forced out 75% of the department, including my boss and his boss, the department head.
I had saved and invested over the years and will be fine, doing volunteer work in retirement which I enjoy. Most of those let go by the company got better jobs with competitors and took their institutional knowledge, industry contacts, and skills with them. The company came to realize they sacrificed a lot for a small savings in the budget, and that we had done a lot more for them than they realized. Maybe there is something to this idea of loyalty being a two way street.