Older workers - tolerate unwillingly or actively withhold?

Will the time come when companies, instead of trying to get rid of their older workers, will want to retain them as much as possible? And in that case, what policies should they resort to?

?When we criticize organizations that discriminate against their older workers and pressure them to withdraw from active life, the arguments we commonly use are ethical and qualitative. We decry the prejudice that their intellectual capacities are declining and that the quality of their work is no longer the same, as well as the reasons why they want to replace them with younger, supposedly better qualified and more productive workers - but fundamentally cheaper ones.

These criticisms are well founded. Regarding the alleged loss of skills, the most recent knowledge on the evolution of cognitive skills confirms that the abilities of older workers are effectively underestimated, and that their decline only becomes significant well beyond the statutory retirement age. Exhibit 1 shows that cognitive ability remains high until very late and that for the best performers in their age group, at age 70 it is practically at the level of someone in their 20s.

  Exhibit 1 (source: Journal of Psychological Science in the Public Interest)

Firms, therefore, make a serious mistake by undervaluing the contribution of their older workers and by letting them go, since the slight decline in the cognitive capacities of a few is more than offset by the considerable accumulated knowledge capital. In addition, they risk destroying an important vehicle of transmission of organizational culture between generations and a memory of mistakes made in the past (of great value to prevent their repetition), among other intellectual assets. And even when one wants to break with the past and transform organizational culture, the involvement of older people can be instrumental in identifying obstacles and correcting past mistakes.

This type of criticism, however, has a problem: it presumes that there is a sort of "natural aversion" of organizations for older workers, and that this attitude is a constant, independent of circumstances. Everything points out that what now tends to be seen as a structural factor is, for reasons related to demographic evolution, a contingent variable that is about to be reversed.

The reason is the aging of the population and the progressive contraction of the younger generations entering the workforce, which will inevitably demand longer careers in order to improve the ratio between active and retired workers and thus increase the prospects for sustainable pensions.

However, this is not an issue that will only erupt in the medium and long term; it is hitting us right now. The number of younger workers is already proving to be insufficient to meet the needs of the economy. Let’s take the figures for Portugal [1]. The working-age population (15-64 years) has declined by 380,000 people in the last decade, and the economically active population - those who are employed or looking for work - also decreased in 315 thousand individuals. On the other hand, the non-economically active population (those in the 15-64 age group who do not have a job or cannot work) has shrunk by about 70 thousand individuals between 2016 and 2017, suggesting that at least some of these will have been drawn to fill the void left by the reduction in the number of active workers.

Rather than trying to get rid of their older workers, organizations are therefore on the verge of having to hold on to them at all costs.

Will they stay?

Once again, the debate has overlooked a crucial aspect. When we consider the best policies to make the most of "senior talent", reduced or flexible work schedules are always suggested as a measure to "relieve" older workers of the strains of a full-time job and ease their transition to retirement (in other words, getting them to work less and less so they will not “drop off a cliff” when they stop working at all).

But that is not the main reason why such flexibility is necessary and important. The continuous increase in longevity means that many workers over 55 (the age at which companies begin to consider sending them away) still have living older relatives - parents, perhaps aunts or uncles - who need care. Additionally, they also have grandchildren, born of children at the beginning of their careers, who also require their support. In this sense, many baby boomers are sandwiched between two generations and have to split their time and attention between their older folk and their progeny. Faced with rigid schedules and their bosses’ lack of understanding regarding their predicament, many have no alternative but to prematurely interrupt their careers to the detriment of both parties.

 In these cases, once more, women pay the highest price given the role of caregivers that society still vests on them. And the combination between those shorter contributory careers with wages still significantly lower than the men's eventually has a devastating effect on the value of retirement pensions that condemns many women to an impoverished old age.

Lifelong learning has been the central pillar of career extension policies, on the assumption that it is essential for maintaining and updating the skills of employees all along their careers and optimizing their contribution even at more advanced ages. Such policies are indispensable but they are not sufficient. The retention of older workers - an imperative in the face of the growing shortage of young workers - will require companies to develop benefits packages built around more flexible work arrangements, as they do to support parenting young couples. The latter need help to care for their offspring; the former need help to care for their seniors.

Managing "senior talent" therefore includes developing a specific Employer Value Proposition tailored to older workers’ needs.

[1] All demographic data presented in this paragraph was obtained from PORDATA (www.pordata.pt)