Managing the Older Worker (by Peter Cappelli)

Experience counts, especially when a talent pool lacks tacit knowledge,

needs to meet unusual demands at peak times, or needs to contain

on-boarding and turnover costs.

 

Talent managers continue to complain about the job applicant pool. The problem isn’t lack of academic skills.  Poor   work ethics, lack of interpersonal skills and notenough work experience head the list of complaints. What’s missing is the tacit knowledge that  can only be learned on the job. Talent managers also complain they don’t have the time to train or develop employees, though they admit employees need skills to do their jobs. To find a pool of qualified applicants who have the experience needed to succeed, companies can stop looking to India and the developing world and instead look in their own backyards at the huge, growing pool of older workers.

Older workers do better on every relevant measure of job performance. They are absent less, have less turnover, have better interpersonal skills and are better at job tasks they have been performing for years. They are already trained, and many are not looking for career advancement. Nor do they cost more. Wages are higher for experience in the labor market because that reflects better job skills and performance, but there is no premium for age. Using retired employees, for example, is especially effective as it saves the organization the cost to on-board a new hire, or bring in a temp or contract worker, and the retirees also know the culture and the organization’s operating procedures.

Hiring Older Workers Is a Good Move

The growing life expectancy of baby boomers is an important factor driving the need to employ older individuals. Longer life spans mean people both want and need to keep working. Older workers often experience a fundamental change in their employment relationship related to age. This may happen via retirement policies or late-career layoffs causing them to seek new jobs or work in a different way. Older workers are also victims of age-related prejudice, which can appear as young as 40 for workers in some industries, and in the United States that is when legislative protections against age discrimination begin. In professions where skills are portable, it may be later, into the 60s.

Discrimination against older individuals is common and especially pernicious because it eventually affects everyone who lives to their life expectancy. The difficulty they face securing employment relates in part to misunderstandings about their abilities, in part to management practices that don’t allow employers to engage them, and in part to outright prejudice. To prevent recruiters from discriminating and to get older individuals in the door, talent leaders need to ensure their recruiting materials show older employees. They need to train recruiters to focus on experience rather than age — some companies have moved to phone interviews to reduce age bias — and they need to highlight success stories about older candidates. Employers are trying to figure out how to engage young workers, fixating on trivial differences in the interests of Generation X, Generation Y and whatever name comes next, while ignoring the massive workforce represented by older workers.

The biggest obstacle to getting access to jobs lies with younger managers, who are often concerned that hiring older workers will lead to conflicts when they are managed by younger supervisors. It could happen, but it won’t if talent leaders ensure younger managers know how to manage older workers, and if older workers are taught how to get what they need from younger managers. The military often has to address the supervisor-subordinate conflicts when junior officers lead older and more experienced personnel. To address these challenges, West Point rotates majors and captains from command positions back into the academy of leading in the field, and the issue of working witholder noncommissioned officers features prominently in those discussions. The Naval Academy takes a more structured, classroom-based approach to the topic through its required leadership course. Donald Horner, a leadership professor there, said the underlying model begins with an understanding of the attributes of the officers and of the personnel they command: How do differences or similarities in age between us affect the approach I should take to lead each group?

Different Management Practices Make Sense

Managing older workers requires a different approach than what is traditionally used. Trying to motivate employees with money, promises of promotions and career advancement — and at least implicitly with thefear of being fired if they don’t perform — doesn’t work so well with older individuals, who likely are near the end of their careers. Older workers are an asset for almost any organization, but they are not identical to their younger colleagues. Their reasons for working are typically different and can lead to mismatches with many employers’ management practices. Older workers may not care about an opportunity to compete for promotions. Those who have had career success already have experienced the joys and headaches of leadership positions at the top of hierarchies.

Those who have had less success in climbing the career ladder are unlikely to be motivated by the possibility of a promotion toward the end of their careers. They may not have the time left for the prospect of an eventual promotion to be attractive. It also can be a mismatch to focus on financial rewards. Money is of interest to older workers, but not always as much as for younger employees who still face financial challenges such as buying houses, funding college and saving for retirement. The third and perhaps worst mismatch is to rely on the fear of being fired to motivate and manage older employees. Few talent managers will threaten employees with dismissals to keep them in line, but many do fall back on the fear of being fired as a default management technique because they don’t offer much else to motivate and manage their workforce.

To make better use of the mature workforce, begin by offering opportunities to extend the employees’ working life. To become an employer of choice for this talent pool, companies should:

Lead with mission: Older workers are often motivated by the chance to contribute something. There are two parts to that sense of mission. The first is the importance of doing good, of contributing something important to the community and to others. To attract older workers, companies can highlight the social purposes their organization serves, perhaps assigning older workers to projects that target community interests and good works. A second more general aspect of mission gets at the more basic sense of being useful, of making a contribution. Individuals should be able to see the connection between what they are doing in their individual jobs and the service or product being produced.

Build social relationships: It’s important for older workers to develop and maintain relationships with others. GlaxoSmithKline builds social relationships and support systems for older employees via an affinity group. Its Prime Time Partners Network, which began in 2007, is targeted to mid- and later-career employees, and brings them together for lunch-hour meetings and other programs on life-phase transitions that focus on older workers and retirees who have come back for project work. Promote flexibility and work-life balance: Younger workers aren’t the only ones interested in work-life balance. Flexible work arrangements could include: when the employee works (outside the traditional 9 to 5); where the employee works (telecommuting); how the employee works (job sharing); and what the employee receives for working (benefits are dependent on an employee’s needs and stages of life).

Train to upgrade skills: Older workers also can be motivated by offering opportunities to upgrade their skills. The chance to learn new things can be compelling for older individuals who want or have to keep working, and training may be especially important for older workers whose self-confidence in changing jobs or roles is low.

Some companies expand these opportunities to alumni who may have left before retirement. A few novel arrangements have developed where companies make their retirees available to each other, effectively swapping them back and forth. Cigna, for example, has been bringing back its retirees for the past 20 years with its Encore Program. Under this program, Cinga retirees can work up to 80 hours per month. They are considered hourly part-time employees and as such can receive retiree medical insurance coverage and can contribute to their 401(k) plans.

Monsanto’s Retiree Resource Corps is built around an advanced database outlining the skills and competencies of its retirees who want to work part-time, full-time or on special assignment.

The Benefits of Experience

Older workers can meet special needs in organizations that younger workers cannot. Some of these have to do with talent management issues, including:

• Knowledge transfer: Older workers have tacit knowledge their younger peers have yet to acquire. Even in technical roles where knowledge dates quickly, experienced individuals understand issues around application and execution about which the latest college graduate has no idea. Attempting to capture all of the knowledge in advance of an older worker’s retirement is a huge undertaking. A good process to follow is to keep on the employee as a mentor, consultant or in-house expert, rather than trying to pay two employees during the knowledge transfer process or to copy down all the knowledge in advance. This process is cheaper and ensures the transition isn’t constrained to a fixed period.

• Mentoring: Experienced employees, especially those who have finished their careers and are officially retired, make excellent mentors for younger employees, as the former know a lot about the organization, no longer have a personal stake in office politics and can be objective. They typically are at the point in their lives where giving back and helping others is important, which can make them excellent coaches.

• Solidifying culture: Experienced workers, especially retirees returning to an organization, already know the norms and values and are able to pass them along to new hires in a credible way. “I was there when this happened” beats having a trainer tell a story about company history every day.

• Unusual demands: Older workers can serve as a just-in-time workforce for special projects, meeting peak/seasonal business demands and other one-offneeds. Using retired employees saves the organization on-boarding costs for new hires or temp or contractworker fees, and retirees already know the culture and operating procedures. Even if they are not former employees, older workers often have an understanding of how things work that lets them fit in and figure out what needs to be done without a lot of explanation. Efforts to make better use of older individuals in the workplace represent one of the greatest opportunities available for business. The question is, how long will it take for organizations to decide which way to go: be at the front of the trend and get the benefits first, or lose out by trailing behind?

Peter Cappelli is the George W. Taylor Professor of Management at The Wharton School, director of Wharton’s Center for Human Resources and co-author of Managing the Older Worker: How to Prepare for the New Organizational Order. He can be reached at editor@talentmgt.com.