Employers are creating reward programs that cater to the needs of older workers.
Years ago, it was not uncommon for companies to make room for upcoming, fresh talent by offering financial incentives that encouraged older workers to retire. How times have changed. Now it's the older worker who may prove to be the panacea for the labor shortage confronting corporate America.
American employers support nearly 24 million workers over the age of 55, up from almost 21 million in 2003, according to the Bureau of Labor Statistics. As America's workforce continues to gray, companies are faced with a unique challenge: how to reward the older worker.
While promotions, cash bonuses or even electronic gadgets may motivate workers in their 20s or 30s, that's typically not the case with older employees, many of whom may be financially secure. Many prefer health-care benefits, says Kenneth Mitchell, vice president of return-to-work development at UnumProvident Corp., a disability insurer in Chattanooga, Tenn.
"You have to provide the right incentives," Mitchell says. "When an older worker has arthritis or another condition, that's one of the first things that affects their productivity. It's very important that employers enhance the accessibility and affordability of their health-care programs to support the older worker."
But health issues can sometimes extend beyond the worker. Last year, UnumProvident conducted a research study on family medical leave, surveying roughly 140,000 employees. Results revealed that one area of concern for older employees was dealing with family issues, particularly elder relatives. Receiving time off to care for an ill parent, for example, ranked high on their list of priorities.
Mitchell says employers with at least 25 percent of their workforce over the age of 55 must be very conscious of this productive life stage. At UnumProvident, phased retirement is an option. Senior execs and other employees can spend anywhere from six months to several years transitioning into retirement. Not only does it benefit and reward older workers, but the company can also spend more time transferring the knowledge and experience of outgoing workers to existing staff.
Meanwhile, there are many myths surrounding the older worker, such as they want to retire at 65, handle less responsibility or disengage from the workplace. Just the opposite is true. A majority of employees between the ages of 55 and 65 want to continue working, says Marcie Pitt-Catsouphes, co-director at the Center on Aging and Work/Workplace Flexibility, a research center at Boston College in Chestnut Hill, Mass., that helps employers deal with challenges associated with the aging workforce.
"The second thing that's very clear is that most don't want to work a five-day-a-week work schedule," she says, adding that many older workers consider a flexible work schedule a valuable incentive. "And when you ask older workers if they want more responsibility, it's really a minority that say they want to cut back on responsibilities."
But most do want choices and some control over decisions. The lesson here is to solicit input from workers about what really is meaningful for them at different stages of their careers. She says many employers include questions on employee-satisfaction surveys about what rewards or incentives are most appreciated or introduce the topic at retirement workshops or during annual performance reviews. Sometimes, supervisors are even instructed to hold informal conversations with older workers about the types of rewards they would prefer.
However, other companies simply ignore them, falsely assuming that older workers who are on their way out won't respond to recognition programs. Big mistake.
She says workers of any age enjoy flexibility. "If there's an incentive being offered, it makes perfect sense to offer people some options," says Pitt-Catsouphes.
Some companies are moving away from pure financial rewards and focusing on those that create a more amenable workplace, which enhances overall employee satisfaction. For example, consider the following rewards or incentives suggested by Kennette Reed at Kennette Reed & Associates, a consulting firm in San Leandro, Calif., that specializes in employee retention, performance and improvement, and management and leadership coaching:
* Small conveniences like assigned parking spaces close to the front entrance of the workplace;
* Health-care coverage for older workers who've cut back on their work schedule;
* Participation in a wellness program;
* Alternative work schedules, including working on call--even if it's one hour a week;
* Overseas assignments. Older workers with grown children are more free to travel;
* Opportunities to mentor younger workers, a sign from employers that older workers are respected and valued; and
* An invitation to collaborate on special projects with different employee generations.
There are plenty of other ideas, she says, pointing to the 50 Best Employers for Workers Over 50 (www.aarpmagazine.org/lifestyle/best_employers.html), published by the American Association of Retired People, which identifies a variety of "wow factors" or creative incentives being offered to older workers by American employers.
"Look at what's worked at other organizations," says Reed. "Little things can go a long way. See what some of the other top-performing organizations are doing that have high retention rates."
Then present these ideas to older workers, either in the form of a laundry list that can be ranked in order of importance or in the form of forced-choice questions. For example, ask if they would rather receive an employee discount on meals at the onsite cafeteria or an annual membership at a local fitness club. Then track the programs. By measuring their return-on-investment, HR can discover which incentives are the most appreciated and offer the biggest bang for the buck.
Nevertheless, some companies haven't even begun this process and are still designing rewards and incentives in a vacuum, Reed says.
"[Employers] are very slow to change and often won't change unless they're motivated to do so," says Reed, adding that it's been a known fact among HR executives over the past five years that there is going to be a worker shortage. "Are they making changes necessary to manage this? Some are. More are not. Many organizations are going to wait until there's an issue . . . and deal with it."