Maximizing The Powers Of The Elderly

Maximizing The Powers Of The Elderly

Judy Olian

(Judy Olian is Dean of Penn State's Smeal College of Business and a leading expert in strategic human resources management.)

It's not surprising that anyone selling anything -- consumer products, drugs, financial services, or education -- is showing intense interest in older Americans. Recent census data show an increase of 12 percent in the over 65 year old U.S. population since 1990, and life expectancy continues its upward trend from 68 years in 1950, to almost 77 in 2000. Projections are that there will be more than 40 million Americans over age 65 in 2010, and close to 60 million by 2020. In contrast, the 40 - 55 year old cohort will decline by 2020.

As many industries recognize, that's an opportunity -- and an imperative -- waiting to be seized. For example, in the last 5 years some 70 colleges and universities - from Ithaca College to Penn State University -- have partnered with private developers to offer retirement facilities that draw on the services and programs of the college or university. In one novel arrangement, Lasell College in Massachusetts avoided bankruptcy by building a retirement community on campus and requiring residents, as a condition of membership in the community, to maintain a full program of learning as long as they retained their health. That's a win-win. Elderly residents enjoy the continuing intellectual stimulation of the learning environment, interactions with much younger people, and many cultural and physical activities offered through the College. Lasell reaps substantial financial benefits, and the close association with the college has proven to be a selling point to potential residents.

Seniors offer similar advantages in the workplace. According to estimates from the International Longevity Center, about 4 million Americans aged 65 and over are working. Retirees often return to the work force at the behest of their employer who can't afford to lose the knowledge accumulated by long-time employees, or their reliable work habits that have a positive effect on the entire work group. Many older workers gravitate to non-full time forms of work, especially independent contracting or consulting, on-call work (such as substitute nursing or teaching), or temporary work in administrative or IT roles. Some temporary employment agencies, like Experience Works or Retstart Temps, focus exclusively on placing older and retired workers.

For some firms, especially in jobs where it's difficult to attract and retain skilled, reliable employees, older workers can be the permanent solution to an intractable problem. At Bonne Bell, which makes cosmetics and beauty aids, the production line is composed of men and women in their 60s to 80s. There's even one great-grandmother aged 91. Other positions paying $7.50 an hour are staffed with retired teachers and nurses working 4 hour shifts to accommodate their needs. Whether it's shift work that deters employees with young families, customer service positions that call for broad knowledge of the business and supreme patience, or delicate team issues that require the finesse of an experienced handler, older employees brought back from retirement can be the best solution.

Why target older workers for employment?

They have broad and deep experiences that can be transferred to more junior employees to replenish the company's brainpower. They are often politically safe choices in situations rife with controversy. They may be more acceptable because they have no personal ambition, and they'll be temporary. They may be especially suited to certain jobs, like customer service positions. Their work habits can be more reliable because they have simpler family lives. They won't pick up and move as long as they're working in their chosen retirement community. Typically, they no longer seek career advancement and for many, the income is supplemental to other retirement funds. They work because they seek social and intellectual returns.

Fringe benefits are often lower for retirees working partial schedules. Watson Wyatt's recent retirement survey reported that 55 percent of responding employers pay reduced life insurance benefits for returning retirees, and 47 percent provide fewer vacations. If it weren't for older workers, some hard-to-fill jobs -- especially in the service and hospitality sectors - would remain vacant.

But are we ready for this form of employee diversity? We've gotten used to tech companies whose work force looks like a fraternity house gathering, where innovation and growth are equated with youth. But high performance does not hinge on youth, and healthy cultures are those that engage people and stimulate performance regardless of age. It's inevitable -- changing demographics will necessitate retention and re-employment of older workers because of severe workforce shortages, challenging companies to become more inclusive of all age, as well as other demographic groups. It's worth making that shift, early.