Meeting of November 17, 2010 - Impact Of Economy On Older Workers
Chairwoman Berrien and Commissioners, thank you for inviting AARP to participate in today’s meeting on “The Pressing Problem of Age Discrimination in Today’s Economic Times.” I am Deborah Russell, Director of Workforce Issues in AARP’s Education and Outreach Department. As you know, AARP is the nation’s largest membership organization for people 50+, working to help people 50 and over improve the quality of their lives; the opportunity to work free from age discrimination on the job is central to that quality of life.
We sincerely appreciate the Commission’s continuing attention to age discrimination, as exemplified by hearings such the one today, and by your proposed regulations on disparate impact under the Age Discrimination in Employment Act (ADEA). We strongly support those proposed regulations and urge the Commission to finalize them before the year is out.
As you are well aware, the financial meltdown of 2008 and the recession that has followed in its wake have had a devastating impact on older workers. Unemployment among older workers age 55 and older is at records highs of over 7 percent; for older men, it is over 8 percent. Compared to workers of other ages, older workers have seen the sharpest increase in their unemployment rate, and once jobless, suffer much longer spells of unemployment than younger workers. On average, workers 55+ were unemployed for 44.3 weeks in October, 2010, nearly three months longer than the average of 33.2 weeks for workers under the age of 55. To help address this new reality, AARP sponsored 40 career fairs in 19 states with the highest unemployment rates amongst older workers. These career fairs included workshops addressing issues such as branding yourself at 50+ and how to leverage networking. In addition, we offered one-on-one counseling, instruction on how to search for jobs online and posting online resumes. These events also offered 50+ jobseekers a host of resources and tools to increase success rates in securing employment. In total, AARP served over 50,000 people in 2010. These events taught us a lot about what is really happening across America with respect to older jobseekers and their success in finding and securing employment. And our members tell us that age discrimination is definitely a factor in their difficulties finding a new job.(1) In addition to job loss, the stock market crash and the bursting of the housing bubble inflicted a double whammy on older workers’ retirement savings and housing wealth. The bottom line is that, as a result of this recession, many older workers will have no choice but to work longer since they won’t have the financial ability to retire.
But even before this recession, it was clear that a significant proportion of older workers would need or want to stay in the workforce past traditional retirement age. AARP’s own surveys indicate that as many as 70% of older workers expect to remain in the workforce beyond normal retirement age.(2) The top two reasons for wanting to continue working are economically driven: for the money and the health insurance. However, Boomers also want to remain engaged in the workforce. They tell us they want to remain mentally and physically active, and they want to contribute their knowledge and skills in mentoring younger workers and “give back.” As people are living longer, the idea of retiring at 65 is less appealing when you have the potential for living into your late 80s or even 90s.
The Bureau of Labor Statistics predicts that older workers will account for almost all of the growth in the labor force over the next decade. Between 2008 and 2018, the workforce is projected to grow by 12.6 million workers; 12 million of those workers will be 55 and older.(3) Consequently, workers 55 and older will constitute nearly one-fourth of the labor force in 2018.(4)
In an effort to address these issues, AARP has several initiatives that help employers value and prepare for an aging workforce.
AARP’s hiring partnership called the National Employer team recruits employers who have a specific interest in hiring the mature workforce. Established through collaborations with Home Depot, AARP now supports 42 NET members that represent diverse industries such as CVS, Johns Hopkins, Kelly Services, Allied Barton as well as government agencies such as the Small Business Administration and the IRS.
These companies are required to participate in management training that ensures ongoing development of managers on how to recruit, manage and retain older workers. In addition, NET members participate in career fairs, collaborate on web based seminars and participate in AARP-sponsored business roundtables.
AARP assembled over 30 associations that represent employer groups. AARP shares tools, information and resources that are passed along through these associations. Industries such as healthcare through the American Hospital Association, human resources through the Society for Human Resource Management, transportation through the American Trucking Association are better prepared for the demographic shift as a result of working with AARP. One example of this work includes a joint marketing and outreach effort AARP and the American Trucking Association to encourage older workers to consider a career in trucking. Ads that depicted driving a truck and seeing the American landscape as an “encore career” yielded over 50 new truckers for Schneider’s Trucking, including a husband and wife team that are spending their retirement driving trucks cross country.
AARP’s biennial awards program recognizes companies that demonstrate their commitment to the recruitment and retention of older workers. To date, we have recognized over 350 companies. I will be discussing trends we have learned through this awards program later.
AARP offers quarterly web-based seminars that cover a variety of topics pertinent to the management and retention of older workers. We invite winners of our Best Employers award and members of our National Employer team to participate in these webinars. This is a great opportunity to showcase employer best practices to other employers that are facing the challenge of addressing an increasingly multigenerational and aging workforce.
In addressing the return on investment with respect to the hiring and retaining of older workers, AARP conducts annual research to educate employers about the workplace needs of 50+ workers as well as understanding the cost associated with recruiting this demographic. Significant reports include: AARP/Towers Perrin Business Case for 50+ Workers;AARP Staying Ahead of the Curve report; AARP 50+ Hispanic Workforce report. This year in partnership with the National Urban League, we are releasing a study in December that will focus on the 50+ African American workforce.
The Employer Resource Center is an internet site on the aarp.org website targeted to employers that interested in finding information pertaining to the aging of the workforce. On the site you will find information relating to employer best practices, webinars that can be downloaded, tips and tools, management trainings on recruitment and managing a multigenerational workforce and much more.
Managing the Older Worker: How to Prepare for the New Organizational Order is a recently published book authored by AARP former CEO Bill Novelli and renowned professor of business at the Wharton School, Peter Cappelli. In this book, Novelli and Cappelli explain how companies are facing a multigenerational workforce and what needs to be done to maximize the value provided by older workers with the main focus being on adapting management practices with practical examples.
Finally, AARP is pleased to have established a strategic partnership with the Society for Human Resource Management.
In an effort to determine the prevalence of workforce planning to anticipate demographic changes in the workplace, SHRM and AARP conducted a strategic workforce poll of close to 400 SHRM members. Results show that 39% of poll respondents reported that their companies were examining internal policies and practices in preparation for workforce shortages when older workers retire. I believe that my esteemed colleague representing SHRM will be providing additional results of this poll.
These polling results underscore the need for more employers to recognize the value of long-term talent management planning in order to anticipate shifts and changes in the workforce. SHRM has joined AARP to co-sponsor the AARP Workforce Assessment Tool. This free, 30-minute tool was developed by AARP in 2008 to help employers plan for the demographic realities of their workforce. The tool allows an employer to input current demographic data, record average ages of retirement and take an inventory of current policies and practices that are meeting the needs of workers. A report is generated that provides a visual presentation of current workforce demographics and anticipated talent shifts (due to retirement patterns) in the next 5, 10 and 15 years. To date, there are close to 3,000 entries into the Workforce Assessment Tool representing such companies as Toys R Us, Intel, Nike and the National Institutes of Health and we are learning a lot about where companies are with respect to the aging of their workforce.
As mentioned earlier, AARP publicizes employers that value the skills and experience of older workers through the AARP Best Employers for Workers Over 50. In its tenth year, we have learned a lot about what employers are doing to meet the needs of this demographic in the workplace. I just want to highlight a few examples.
The healthcare industry recognized that with the challenge of recruiting younger individuals into healthcare-related jobs, recruiting and retaining and older workforce had to be a strategy to address labor shortages. Healthcare represents almost a third of our list and they are the gold standard with respect to implementing policies and practices that impact their aging workforce.
These include workplace accommodations:
Manufacturing recognizes the need to examine their production floor to determine whether they are “older worker friendly.”
Many of our employer partners and AARP Best Employer recipients offer benefits that attract a multigenerational workforce including:
In yesterday’s world, most people went through a fairly sequential pattern in their lives: education was for the young, work was for adults, and leisure (retirement) was for the old. But that pattern has changed. Age no longer defines what we do in our lives, or when we do it. This is especially evident in the workplace. Just as the population is getting older as a result of the aging of the boomers and people living longer, so too is the workforce. People are working longer, either out of choice or necessity. It’s time for workplace practices to catch up with today’s workplace reality. To stay competitive on a global scale, businesses must plan now to recruit, train and retain workers of all ages, just as they must plan for other elements of diversity. For those businesses that ignore this reality, the consequences could be significant as seasoned workers with institutional knowledge leave and seek other opportunities…perhaps with their competitors.
Thank you again for invitation to participate in today’s hearing. AARP looks forward to working with the commission to ensure older workers equal opportunity in the workplace, and I would be happy to answer any questions you may have.
1. For instance, they have alerted us to an emerging issue related to the proliferation of online job posting and application systems. Many of these systems request the applicant’s date of birth and/or dates of graduation, and will not allow the applicant to continue with the application until that information is submitted, which can allow age discrimination to creep into hiring decisions. The EEOC’s current position on this practice is that a request for information such as date of birth or age on employment application forms is not necessarily a violation of the ADEA, but instead will be closely scrutinized to assure the request is for a permissible purpose. The EEOC should revisit and strengthen its regulations on the use of age and date of birth in job applications, particularly in the online application process.
2. AARP, Staying Ahead of the Curve 2007: The AARP Work and Career Study 12 (Sept. 2008), available at http://assets.aarp.org/rgcenter/econ/work_career_08.pdf.
4. Id., at 31.