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To Keep Older Workers, Consider New Responsibilities and Guard Against Discrimination

By Eric Townsend

With many firms bracing for a “retirement wave” as the economy emerges from a global recession, retaining older employees with institutional knowledge and strong work ethics remains important to any organization’s bottom line.

Convincing workers to delay retirement and stay motivated can be a challenge if managers aren’t intentional in their efforts. Effective strategies rely on a multiprong approach: demonstrate a need for employees near retirement by giving them additional responsibilities, consider innovative work schedules, and be mindful of the way you handle an older worker’s colleagues, especially if they’re near the same age or belong to the same social networks.

Just as important is to treat older employees as you would their younger counterparts. The perception of “ageism” in the workplace is a strong disincentive to remain with a company. Recent studies funded by the SHRM Foundation outline these recommendations and illustrate a critical role older employees can play in a company’s success.

In “Predicting Retirement Upon Eligibility: An Embeddedness Perspective,” Tel Aviv University researcher Peter Bamberger and Cornell University’s Samuel Bacharach explore three influences that factor into retirement decisions.

Flexible work arrangements—reduced hours or work-from-home opportunities—and additional duties may be enough to convince those newly eligible to retire to consider staying on the job. Indeed, the latter is a bit counterintuitive. Conventional wisdom states that older workers prefer lighter workloads, but Bacharach and Bamberger discovered that many seasoned employees view enhanced responsibilities as positive and rewarding challenges.

Nor do older workers make retirement decisions in a vacuum. They consider the plans of colleagues around them, which places employers in a unique position. If a firm wants to retain a particular employee, according to Bacharach and Bamberger, the company should also examine its treatment of those nearing retirement who work with that employee.

“Our findings are important in that they suggest that employers may have significant leverage in influencing the retirement decisions of employees newly eligible to retire,” they write in their study, published last year in the journal Human Resource Management. “To the extent that job challenge plays an important role in motivating retention … employers interested in retaining such workers might attempt to engage their older workers and deploy them in positions allowing them to apply their experience in new and exciting ways.”

Convincing older workers to stay on the job, however, involves more than adjustable hours or increased responsibilities. Research also points to ageism—the discriminatory attitudes and behaviors toward aging workers—as another consideration among employees nearing the end of their careers.

In a study by Lisa Nishii, Angela Langevin and Susanne Bruyère of Cornell University, productive older workers who reported age-based discrimination at work felt less satisfied and were more likely to quit. Ageism is especially tricky because companies don't pay it as much attention as gender or racial discrimination. Why? For starters, there are far fewer visible signs.

“There also haven’t been any visible societal ‘movements’ about the rights of older workers like there have been for women, ethnic minorities and people with disabilities,” Nishii said in a recent interview, “so people perhaps have not yet been sufficiently sensitized to the issue.”

Nishii and her colleagues examined three ways in which ageism develops and suggested ways to help prevent it: 1) cultivate inclusive climates by implementing HR practices that don’t appear to favor younger employees, 2) create both opportunities and a motivation for employees to develop meaningful interpersonal relationships at work that span age boundaries, and 3) keep older employees part of their manager’s “ingroup.”

Inclusive managers are attentive to the quality of relationships they develop with their employees, Nishii said. They craft strong rapports with all subordinates, not just a chosen few. These types of managers also model the very same inclusive behaviors they try to foster in other employees.

From a legal standpoint, the Cornell team points to an increasing number of court verdicts against employers for age discrimination. Because age stereotypes are thought to operate in subtle ways, courts are more lenient in what they require of plaintiffs filing age discrimination cases, thereby increasing the legal liability that employers face.

“It certainly is the case that issues related to age discrimination are hardly ever at the forefront of discussions that I have with diversity and inclusion officers about their priorities or strategies,” Nishii said. “There is growing attention to the fact that the incidence of disabilities will continue to rise as the workforce ages, but the concern here has less to do with discrimination and more to do with making sure companies have the necessary structures and processes in place to successfully accommodate workers with disabilities.”

About a quarter of the American labor force is over the age of 55, and many workers possess vast levels of knowledge about their companies and industries. For researchers, it can't be understated how important the issue of eligible-to-retire employee retention likely will be in the decade ahead.

“Older, more experienced workers—especially high-performing ones—hold important positions in an organization’s social networks, and they also play a key role in embodying and transmitting the organization’s values,” Nishii said. “For these reasons, failing to retain older workers could have a significant negative impact on an organization.”