Hiring older workers - employer concerns

Aging, Feb-March, 1984 by Sally Coberly, Deborah Newquist

The agencies and organizations that make up the aging network are spending more and more time on helping older people to find jobs. Unemployment is high, more older persons are expressing an interest in alternatives to retirement, and recent legislation provides new opportunities for training middle-aged and older persons.

As members of the aging network become more involved in developing and coordinating employment services for older persons, it will be particularly important for them to have an understanding of the questions and concerns that employers often raise with regard to hiring older persons. The purpose of this article is to identify these major questions and to provide information which will be useful in talking with employers about their concerns. Costs

As managers concerned with operating costs, employers often raise questions about the costs of hiring older workers: "Won't it cost me more to hire an older employee than a younger worker?" or "Won't the costs of hiring an older worker outweigh the benefits?" While the answers to these questions will obviously vary from firm to firm and from individual to individual, we do know that the costs of some employee benefits, such as indemnity plan health insurance, long-term disability insurance and life insurance, tend to increase with worker age. The costs of other fringe benefits, however, such as vacation time and pensions, are more closely tied to length of service and salary level than to age. Thus it is not surprising that the results of a study of worker age and employee benefit costs at the Travelers Insurance Companies led the author to conclude that "it is not safe to assume that older workers cost more or cost less than younger workers."

Whether the total costs of employing an older worker outweigh the total benefits also depends on how costs and benefits are measured and defined. For example, in addition to the value of his output, the older worker may generate a benefit to the organization through the positive influence he has on the work habits and productivity of younger workers. While difficult to quantify, these less tangible, hidden benefits should be included in any cost/benefit accounting. Productivity

Another concern employers often express relates to productivity, "Will an older worker meet my productivity standards?" they wonder. "How do older workers compare to younger workers on performance?" "Will an older worker add to or detract from our firm's overall output?"

Productivity can be defined in several ways. In its most rudimentary form, productivity can be thought of as units produced per standard interval of time (for example, units produced per hour). Thought of more broadly, productivity also encompasses a worker's attendance and loyalty, and the contribution he or she makes to work morale and efficiency within the organization. Some of these qualities are difficult to quantify and measure.

Several studies have been conducted to assess the productivity of older workers. The findings from these studies repeatedly credit older employees with acceptable productivity ratings. They show that performance does not decline merely because of a worker's age. In most job situations older employees perform as well as or better than younger employees. Moreover, employers report that their older workers meet company productivity expectations. Thus the age of an employee, in and of itself, should have no effect on that person's performance. Rather, the factors which are important to assess when making hiring decisions are the applicant's qualifications, experience, and work attitudes and interests. Worker Health

Employers, like other members of society, see aging as a period of physical decline and voice worries about what it may mean for their organization. They fear that older workers will be absent from work more than younger workers, that they will be sick more often, and that they will have more workplace accidents. We will address these concerns in turn.

Studies of work-loss due to illness show that workers aged 65 and over have attendance records equal to or better than most other age group of workers. For example, the National Center for Health Statistics found that in 1981 workers aged 65 and over had 4.2 work-loss days per year compared to 4.1 days for workers aged 17-24, and 5.7 days for workers aged 45-64. Workers aged 45-64 had the highest incidence of work-loss days per year, but even for them the average was less than six days per year.

Some illnesses are more common with age, some are less common. Persons aged 45 and over have 52% fewer episodes of acute illness per year than do younger persons. Persons in this age group are also absent from work less often because of acute illnesses. On the other hand, the prevalence of chronic conditions generally increases with age but these conditions do not always impair functioning.

Contrary to popular notions, older workers are safe workers; they have fewer workplace accidents than younger workers. Studies conducted by the Bureau of Labor Statistics find that workers over age 55 account for under 10% of all workplace injuries even though they make up almost 14% of the labor force. Once an older worker is injured, however, that worker is more apt to have a serious injury and be out of work longer than a younger worker. Adaptability