The baby boomer population continues to age, heading towards retirement. Admittedly a large contingent of the workforce, baby boomers have managed to change the face of the workplace through innovations and technology. Today they are beginning to face the years before retirement. Business executives are aware of the approaching exodus of workers, but are they prepared?
In a survey done by AARP and published in 2006 business executives and managers expressed an understanding of the fundamental shifts in the workplace as the baby boomers approached retirement age. There were very few however that had taken action to ease the impact on the company.
79% of the executives agreed that the experience that older employees will take with them when leaving the company can hurt the business financially. And another 74% believed that it is becoming more and more difficult to find and retain talented employees.
And interestingly over 50% of the companies surveyed believed that they should be thinking about how to retain the employees approaching retirement so the impact to their bottom line is significantly less.
On the flip side of this problem is the recognition that an aging workforce also has a higher impact on the health benefits of a company. As the work force ages so does the number of people with chronic conditions. These rising healthcare costs can also negatively impact the financial status of a company.
In a study by the Center for Retirement Research employer attitudes were surveyed. The study shined a light on different key points. There was evidence that employer attitudes were changing toward older workers. There continues to be evidence that employers shy away from hiring new employees who are 50 and older due to concerns about rising health costs, ingrained bad habits, and the “I”ll do it my way” attitude that some older employees demonstrate.
Statistics from a number of different companies demonstrate that workers over 50 sometimes have a more difficult time finding work. In a survey of 400 private sector employers they were asked to evaluate the relative productivity and cost of workers age 55 and older. Very few of the employers viewed these employees as less productive and in fact stated they were more productive.
Employees who were seen as less productive over age 55 were also the ones who were less experienced in the positions they held. In addition to the advantages of having an older employee relating to an older customer population base the baby boomer generation is more educated than previous generations and more likely to hold white-collar jobs.
Apparently it is the cost of the older worker and not the fear of less productivity that drives employers to hire younger workers. There is hire cost in orienting and teaching these employees new tasks quickly, in higher health care costs, in their physical health and stamina and how long and older worker will stay in their job.
However, in a study conducted by Towers Perrin for AARP in 2005 researchers found that the additional cost of retaining workers 50 and older is modest (between 0 and 3% a year). These costs are lower than the cost of hiring and training new employees.
The study also acknowledged that companies are slow to adapt to using an aging workforce. Instead employers appear to be turning to outsourcing or using a younger pool of employees.