The Growing Dilemma

This excerpt from "Managing the Older Worker: How to Prepare for the New Organizational Order" looks at some of the issues involved in the increasing number of older adults in the workplace.
This article accompanies When Junior's in Charge

By Peter Cappelli and Bill Novelli


With the growing number of older workers in the workplace or trying to get back in, and as the baby boomer generation "retires retirement" and stays in the workforce longer, it is now becoming more and more common to find older workers being managed by younger managers.

This reversal of the traditional reporting hierarchy, seen in more and more organizations, introduces a new set of challenges for younger managers and older workers alike.

Older workers are a tremendous resource for employers, but they are having great difficulty being accepted back into organizations. The main constraint is conflicts and misunderstandings with younger managers.

To oversimplify, younger managers don't really know how to manage older workers -- and older workers don't know how to get what they need from their younger managers.

In the chapters that follow, we describe the opportunities that the rapidly expanding older workforce offers employers; the challenges that at present stand in the way of engaging these workers, particularly with their younger managers; and specific strategies and practices for younger managers to manage more effectively their older workers.

The Growing Dilemma

Individuals in society want to work longer and will need to do so in order to support longer and healthier lives. They don't always want to keep doing the same jobs, they generally want to work less in terms of hours and effort, and they clearly have different priorities about the outcomes they want from work.

But a huge majority want to keep working. The difficulty that they face in 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.

Discrimination against older individuals is common and especially pernicious because it eventually affects everyone, if we have the good fortune to live long enough.

At the same time that we see widespread discrimination against older workers, employers are complaining about not being able to get workers with the skills and competencies they need, especially strong work ethics and good interpersonal skills.

These are exactly the competencies that older workers offer. Employers are tying themselves in knots trying to figure out how to engage young workers, fixating on trivial differences in the interests of Generation X, Generation Y, Millennials, and whatever name comes next, while ignoring the massive and permanent workforce presented by older workers.

As we argue below, older workers are not necessarily more expensive than their younger colleagues, and they perform better on virtually every relevant aspect of job performance. But the most powerful case for retaining existing older workers and bringing on new ones relies on their ability to meet demands that other workers cannot.

These include the following:

* Helping with the problem of knowledge transfer between generations, an issue rooted in the fact that older workers have lots of tacit knowledge that their younger peers have yet to acquire.

* Solidifying culture. Experienced workers know the norms and values of the organization and are able to pass them along to new hires, especially through formal "partnerships" that pair up older and younger workers.

* Mentoring. Experienced employees, especially those who have finished their careers and are officially retired from their firms, 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, and typically are at the point in their lives where altruistic goals become more important. They make excellent coaches.

* Most importantly, serving as a "just-in-time" workforce for special projects, meeting peak demands in business, and other one-off needs.

Using retired employees saves the organization all the "onboarding" costs of a new hire, or even bringing in a temp or contract worker, and the retirees also know the culture and the operating procedures of the organization.

The word on every CEO's lips after the financial meltdown and associated recession is flexibility -- how we are able to scale down and then scale back up quickly when circumstances change.

Older workers provide that flexibility. Older workers provide exactly what employers say they need at the same time that there is widespread discrimination just in keeping them in organizations, let alone bringing them back in.

Who Are the Older Workers?

The challenges and also the opportunity offered by an aging workforce begin with demographics. Most observers think that the aging of the baby boomers is the important factor driving a big expansion of older individuals, and there is no doubt that it matters a lot.

But the biggest factor by far is growing life expectancy, something that will continue after baby boomers pass from the scene. The fact that people are living longer and therefore both need and want to keep working is the issue.

When does one become a mature or older worker? Part of the definition relates to chronological age, but the more important component may be one's stage in their working life.

We define older workers as those who are experiencing a fundamental change in their employment relationship that is related to age, most often employer driven through retirement policies or layoffs late in one's career that cause individuals to seek new jobs or work in a different way.

The most common of the different approaches is to keep working beyond the usual retirement age, but other challenges include working in a different way -- something other than full-time, for example, in roles that are usually seen as full-time -- or changing direction completely.

We traditionally thought that individuals changed careers or went back to school early in their working life. Now that is happening for people who are much older, who have already worked for thirty or forty years.

That juxtaposition of an older individual following what had been a younger person's path is creating new challenges.

The most fundamental challenge, though, is simply to get and keep a job when one is older. Most individuals who approach the traditional retirement age of sixty-five want to keep working in some capacity, but most end up not doing so. And the reason has to do with a lack of opportunity.

Another way to define when one is an older worker, therefore, is when age-related prejudice kicks in: for some jobs it may be as young as forty, and indeed in the United States that is when legislative protections against age discrimination begin. In professions and other fields where skills are portable, it may be much later, into the sixties.

The Employer Side of the Equation

Why is it that we have such a hard time continuing to find work as we grow older, especially as employers complain about not being able to find workers with the right attitudes, who have the skills to "hit the ground running," and who can make immediate contributions?

One would think employers would be falling over themselves to retain older employees, to let them keep working in more flexible ways, and to hire other older workers. But they are not.

There may be many reasons why older workers are not able to find opportunities to keep working, but most of them have to do with misperceptions about older workers.

These are so widespread yet without basis that they can be thought of as myths, and they include the following: older workers don't perform as well as younger workers, they demand high pay and cost a lot more, they don't want to change, they won't take a step down in role, and so forth.

Discrimination against older workers is widespread -- indeed, by most measures, greater than that confronting minorities and women.

And the biggest obstacle in getting access to jobs lies with younger managers. The biggest concern about hiring older workers expressed by employers is that conflicts would result when they are managed by invariably younger supervisors.

An incredible 88 percent of employers worry about hiring older workers because of such conflicts.

The heart of the difficulty of getting older workers into successful work relationships lies with the challenge of having younger managers supervise employees who are older than they are.

Research suggests conclusively that both younger managers and their older subordinates distrust each other and that negative attributions on both sides are common -- although frankly much more common among younger supervisors than older subordinates.

The cause appears to have less to do with the age differences per se and more to do with the difference in experience and the way in which younger managers try to supervise their more experienced subordinates.

Managing older workers, therefore, requires a different approach. It is not one that is untested, however, and it conforms to many of the contemporary ideas about effective leadership, from the military down to start-up firms: communicate clearly about issues and challenges, involve employees in decisions, delegate tasks, and recognize contributions. Above all, acknowledge what the older subordinates know.

Older Workers in the Movies

The experience of older employees being managed by younger supervisors came to the big screen with the 2004 movie In Good Company. In it, Dennis Quaid plays a successful middle-aged salesman who is demoted to make room for a much younger outsider.

The plot plays out all the age-related stereotypes: the older man is portrayed as humiliated at having to work for the younger, inexperienced boss, who in turn is presented as being ruthless and having a single-minded ambition.

Having the younger executive manage the older and more experienced man is depicted as not only unnatural but dysfunctional. The two battle for control over workplace priorities, and the conflict between them eventually gets resolved when they bond over a last-ditch work project.

Their relationship in the end evolves into a traditional father-son model that largely ignores the fact that the younger executive is still the boss.

Management Practices for Older Subordinates

Older workers are a tremendous asset for almost any organization. In terms of work ethic, absenteeism, and turnover, they score better than their younger peers.

But they are not identical to their younger colleagues. In particular, their reasons for working are often different and can lead to mismatches with the management practices of many employers.

Beyond the interaction with supervisors, older workers benefit from a somewhat different employment model, although it is not so different that it need shake the basic assumptions of the organization.

Many and arguably most large employers motivate employees with money, with promises of promotions and career advancement, and at least implicitly with the fear of being fired if they don't perform.

None of these factors matter as much to older individuals, who are near the end of their career.

Attracting and then engaging the older workforce begins with a different and distinctive value proposition that includes giving greater importance to a sense of mission; serving a social purpose or at least one that goes beyond simply making money for shareholders; offering flexibility in terms of work schedules; and offering greater choice in benefits that might include some targeted to older individuals (e.g., elder care insurance along with day care programs).

An interesting point about the above list is that it is not unlike a list we would see generated to attract young workers. In fact, the interests of older and younger employees are highly similar. Perhaps it is those in the middle who represent the more unusual case.

More generally, employers interested in making better use of the mature workforce should begin with opportunities to extend the working life of their own employees. Some companies expand these opportunities to alumni of their organization, those who may have left before retirement. And a few novel arrangements have developed where companies make their retirees available to each other, effectively swapping them back and forth.

Overall, efforts to make better use of older individuals in the workplace represent one of the greatest opportunities available for improving society.

It is about the only way to provide the resources necessary to pay for longer lives; it helps address exactly the needs employers say they have for a skilled, just-in-time workforce; and it provides some of the best opportunities for older individuals to stay active and engaged.

The arguments are so compelling that they may seem inevitable. The question is simply how long it will take and whether your organization wants to be at the front of that trend, getting the benefits first, or losing out by trailing behind. This book tells you how to get on board.


Having workers remain in the workforce longer as productive employees has significant benefits for our society.

It helps employers avert potential labor shortages and receive the contributions of experienced, reliable, and knowledgeable people. It helps individuals meet their needs for income during their later years and provide for continued productive engagement in society.

And older workers continue to earn money in addition to their public and private pensions. And while they are getting their retirement benefits, their wages and salaries are still subject to FICA withholding, so they continue to pay into a system that is paying them.

As we have attempted to demonstrate throughout, employers, government, and employees themselves all have key roles and responsibilities for making this happen.

Government has a responsibility to continue enforcing laws against age discrimination in the workplace and can support a new vision of work in retirement by providing incentives for employers to hire older workers and for individuals to continue working.

Individuals have a responsibility to remain employable by updating and learning new skills and ways of working.

And employers can implement best practices and gain competitive advantages by retaining and recruiting older workers.

All this constitutes change in the way our workforce is organized and managed. Twenty-five years ago (more recently, in some industries and sectors), a key question being asked and pondered among many male workers was, "Can I report to a woman?"

Today, in virtually every sector of our society, the question has been answered in the affirmative. We have women running corporations, large and small. University presidents and deans are women. Women are over-seeing sports teams, military units, and major nonprofit organizations. Women MBAs are proliferating. We have many women in key government positions, including cabinet members, governors, and mayors. They are leading and managing, and the idea of a man reporting to a woman is virtually a nonissue.

Now the question that may be asked among older workers is, "Can I report to a younger person?" More specifically, "At age sixty-five or seventy, am I going to be able to work for a young person who is half my age and has less than half my experience?"

We believe that the answer will again be in the affirmative.

It is happening more and more, and it will become even more commonplace as the demographics continue to shift. But as we have pointed out, it will take change: in the way managers lead and teach, in the way they present expectations and conduct performance reviews. And it will take skills and a willingness to accept a new order of things among older workers.

It can all be done, and the result can be a better, stronger, more productive workforce.

By coming together and working toward a common vision with shared goals, different stakeholders can have a tremendous impact on society while benefiting employers and employees alike.

Reprinted by permission of Harvard Business Review Press. Excerpted from Managing the Older Worker: How to Prepare for the New Organizational Order. Copyright 2010 Peter Cappelli and William Novelli. All rights reserved.

Feb 7, 2011
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