By Professor Philip Taylor
Turbulent economic times mean difficult people decisions. Managers are considering the sustainability of present staffing levels while also thinking ahead to when the economy recovers. Amid immense pressure from stakeholders, when weighing decisions about whether to invest in or let go of staff there are five things to consider.
First, life stage, not age, drives everything. As unemployment rates rise, history tells us that older workers are often pressured to make way for younger ones. Companies have a track record of offering early retirement packages to try to incentivise departures. While it is often considered that workers around the age of 60 are winding down assumptions about age should not drive employer decision-making. Many cannot afford to retire and may not be planning to retire. Workers often regret taking early retirement packages, realising that lifestyles must be drastically scaled back, or that they simply miss work. Also, older workers who have lost their jobs often find themselves among the long-term unemployed. They can neither find a job nor retire, with potential financial and health consequences. Moreover, once early retirement programs have concluded managers have often realised that critical capability has been lost, often forever.
Second, full labour force participation creates more opportunities for all. While older workers are often made to feel unwelcome the research is clear: job markets with higher levels of employment among older individuals are associated with higher levels of youth employment. This means that while it is sometimes assumed that in an economy there is a ‘lump of labour’ that must be fairly distributed, in fact, the number of jobs is not fixed, and older and younger workers might be better viewed as complements rather than competitors in terms of employment.
Third, ageism is illegal and bad for business. Age-based decision-making does not help managers. Common perceptions that older people can’t learn new things, are less productive, and unwilling to change are demonstrably untrue. And just as age stereotypes apply to older people, they can also be associated with youthfulness. For example, younger workers are valued for their presumed ambition, openness to change and understanding of social media and technology. However, again, these are mere stereotypes that don’t acknowledge differences in terms of skill level or outlook among people of similar ages or similarities among people of different ages.
Fourth, generational assumptions thwart organisational success. The research is equivocal. Generally, chronological age does not predict job performance, although there are small yet positive statistical relationships between being of an older age and some job attributes. Importantly, however, research indicates that there is often greater variation, in job-performance terms, between people of the same age than those of different ages. Research has also failed to demonstrate the noted attributes of different generations and not acknowledged differences within generational cohorts. It is therefore unwise to draw on simplistic generationisations about so-called Millennials or Boomers. Age-based decision-making may not only be discriminatory, it also presents no competitive advantage, and overlooks the rich diversity present in workplaces.
Finally, age diversity is the future. There is a perception that by retaining younger workers, a company is looking ahead. However, instead, considering age inclusion over the entire employee lifecycle is key — from graduates looking for their first job to people building a career after raising children, through to older workers looking to transition to a new challenge. It used to be considered that lives could be divided into three broad phases: school, paid work, and retirement. But today it is recognised that life phases are becoming blurred, less predictable and more flexible. That means labour pools are diverse and, as the COVID-19 crisis passes, employers will need to implement a diverse range of strategies focused on employing workers of all ages and life stages.
The lesson of all of this is to look beyond simple categorisations of workers to instead consider their range of experiences. This diversity, deployed properly, can be a source of immense strength. While undeniably adding a layer of complexity to decision-making during what is a period of unprecedented economic uncertainty, adopting open-minded, flexible approaches to workforce planning will leave businesses better positioned for when the economy recovers.
Philip Taylor is Professor of Human Resource Management at Federation University Australia. He is a Fellow of the Gerontological Society of America and was the 2018 Australian Association of Gerontology Glenda Powell Travelling Fellow on the topic of work and ageing. The project on which this article was based was funded by AARP International.