Workforce Planning: Aging and Employment

1. Workforce Planning: Aging and Employment Learning Module 1—Background Barbara McIntosh, Ph.D.

2. Workforce Planning: Aging and Employment Course Objectives • 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.

3. Course Objectives • Identify the issues confronting employers regarding older worker employment. • Understand the effect of age on work role. • Outline necessary changes in human resource 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.

4. Suggested Texts • Beatty, Paulette T., and Visser, Roemer M.S., (Eds.). (2005). Thriving on an Aging Workforce. Malabar Fla. Krieger Publishing Company. • RAND. Karoly, L., and Panis, S. The 21st Century at Work: Forces Shaping the Future Workforce and Workplace in the United States. MR – 164. 2004 (download file at www.rand.org).

5. 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.

6. The Current Pulse Government Sources Department of Labor: Women’s Bureau and Bureau of Labor Statistics Governmental Accountability Office Administration on Aging, etc. Clipping Service Daily clipping service where aging issues appear in the worldwide press: Current Awareness in Aging Research E-Clippings (send e-mail request to subscribe tofiss@ssc.wisc.edu).

7. Course Overview: Modules • Background. • Labor markets. • Employee perspective on aging. • Employer perspective on aging. • Managing productivity. • Careers and aging workers. • Economic considerations: incentives and disincentives to work. • International perspectives.

8. Module 1. Background • Introduction: Why are we concerned? Definitions. • Overview of demographics. • Normal aging: health. • Stereotypes. • Age discrimination issues.

9. Aging and Employment: Why Are We Concerned in HR? • Shifting demographics and predicted future labor shortages. • Brain drain and organizational learning. • Improvements in life expectancy; productive activity in later life. • Pensions and health care financing. • Intergenerational issues and HR policies and practices.

10. Definitions • What is “old”? • Perception. • Legal definition. • Behavior. • Cohorts. • What is “work”? • Productive activity.

11. Forces to Extend Work Life • National policy (government). • Human resource policy (employer) • Labor shortage. • No mandatory retirement age. • Economic necessity (older employee). • Psychosocial needs (older employee). • Better jobs – knowledge workers. • Flexibility (work hours), availability. • Balanced work-life emphasis.

12. Forces Restraining Extension of Work Life • Youth culture. • Slow-growth economy. • Hiring and retention practices of some organizations. • Labor cost inflation. • Labor union policy (in some cases). • Intergenerational conflict. • Negative stereotypes about older workers.

13. Demographics • In 2000, 35 million (1 in 8) in the U.S. are 65 and older. • By 2030, one in five (20 percent) will be 65 and older. • Propelled by the baby boom: 76 million children were born between 1946 and 1964. • Increased longevity: The “old-old” (85 and older) are 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 are white. By 2050, this number will drop to 64 percent.

14. Projected Demographic Shift Ratio of population 20 to 64 compared to 65 and older: Source: Congressional Budget Office Based on Social Security Administration Data

15. Normal Aging: Health • Physical: • Strength. • Reaction time. • Senses. • Mental. • Psychosocial. • Self-perceptions: (social-cognition).

16. Future Expectations Regarding Health • Behavioral changes (e.g., smoking cessation). • Self-perception changing (re: physical and mental conditions). • Continuous improvement in availability of preventive care. • Changes in societal/market/organizational responses to health limitations. • Medical advances (e.g., joint replacement, continuing activity).

17. Future Expectations Regarding Health • Economic security, including the opportunity to work. • Access to preventive care. • Education. • Family relations: caregiving, support, stress. • Social cognition: perceived role in society. • Community support.

18. Life Expectancy of 65-Year-Olds Over Time Source: Congressional Budget Office based on Social Security Administration.

19. Commonly Held Stereotypes(See: Palmore, E. (1999) Ageism, Springer Publishing) “To be old is to be sick.” ~ 50 percent of Americans believe health is a “very serious problem” for individuals over the age of 65. Reality?

20. Commonly Held Stereotypes • Older people have more accidents. Reality? • Mental abilities decline with age. Reality? • You can’t teach old dogs new tricks. Reality? Palmore, E. (1999). Ageism. Springer Publishing.

21. Commonly Held Stereotypes “Older workers usually cannot work as effectively as younger workers.” (Palmore, 1998). Reality?

22. Age Discrimination in Employment It is still prevalent. More than 19,000 cases were filed with EEOC in 2002 (a 14 percent increase over 2001). In 2004, the cost of negotiated settlements in federal age discrimination complaints totaled $69 million (AARP, 2006). 67 percent report age discrimination (AARP, 2003).

23. Types of Employment Discrimination An AARP survey showed that: • Nine percent of respondents were passed up for promotion or a chance to get ahead because of their age. • Fifteen percent of respondents said they did not get hired for a job they applied for because of their age. • Six percent reported being laid off, fired, or forced out of a job because of their age. • Five percent reported they did not get a raise because of their age. Source: AARP, 2002

24. Legal Sources Bill of Rights/Constitution. Civil Rights Act of 1964. Age Discrimination in Employment Act (ADEA) of 1967. Future: Americans with Disabilities Act (1990). Case law. New legislation.

25. Age Discrimination in Employment Act Right to gainful employment has long been recognized. The ADEA passed in 1967 with a mandatory retirement age of 70. In 1987, it was amended to eliminate mandatory retirement. Use of an individual’s age as a criterion for employment is generally forbidden. It is permitted only when age is a bona fide occupation qualification (BFOQ). Then it may be used as a factor in employment decisions.

26. ADEA Protection Covers workers 40 years of age and older. Applies to organizations with 20 or more employees. Applies to organizations that affect interstate commerce. Does not cover bona fide executive or high policy maker (attained 65 and held the position for two years) if entitled to a retirement benefit of at least $44,000.

27. Unlawful Employer Practices To fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to compensation, terms, conditions or privileges of employment because of such individual’s age; To limit, segregate, or classify employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect the individual’s status as an employee because of such individual’s age; or To reduce the age rate of any employee in order to comply with this chapter.

28. Exceptions Age as an occupation qualification. Other reasonable factors. Laws of a foreign workplace. Seniority system. Employee benefit system. Discipline or discharge for good cause.

29. Court Interpretations Applicants judged on non-age related issues: Courtney v. Biosound, Inc., 42 F.3rd 414 (7th Cir. 1994). Promotions must be based on merit: Barber v. CSX Distribution Services, 68 F. 3d 694 (3rd Cir. 1995).

30. Court Interpretations Illegal to terminate an employee due to age considerations: Benjamin v. United Merchants and Manufacturers, Inc., 873 F.2d 41 (2nd Cir. 1989). Illegal, with exceptions under ADEA, to force employee to retire. Verbracken v. Westinghouse Electric Corp., 881 F.2d 1041 (11th Cir. 1989).

31. Labor Market Realities • You are overqualified. • This job would not be a good fit for you. • The job has been filled. • We will keep you posted.

32. Educate Recruiters! Recruiters (and interviewing managers) should be sensitized to stereotypes (both conscious and unconscious). Focus should be on job description and required job performance. Interviewing teams should include at least one mature worker. Screening materials and/or tests should be printed in 12-pt or 14-pt type for visibility and should allow for variation in completion time.

33. The Flip Side: Tips for the Older Applicant Facing Discrimination • Decide to either walk away or educate (flight or fight). • Prepare. • Network. A contact could be respected community or business member or associate/former boss. Who do you know? • Do your homework. Be articulate about financial position/growth profile/development opportunities. What do you know? Present with a smile. • Other??

34. The Bottom Line The population is living longer, healthier lives. Expectations about work in later life are changing. Stereotypes about older workers still exist. The legal environment and the increasing numbers of older workers means that discrimination must be actively addressed! The business environment must change in response to the aging workforce.