ACCOMMODATING OLDER WORKERS’ NEEDS FOR FLEXIBLE WORK OPTIONS
by Kathleen Christensen and Marcie Pitt-Catsouphes
The Workplace |
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For all the right reasons, older worker want keep working, whether they are retired or approaching retirement. They form a pool of loyal, talented workers. The challenge is for organizations to decide to hire such workers and design flexible work options that make working an appealing option.

A funny thing is happening on the way to retirement for America’s baby boomer population. Rather than going quietly off into the sunset, older workers are actively looking for options to keep working. In fact, a recent AARP study found that 80% of baby boomers expect or want to continue working, and that the majority of them seek some form of flexibility – particularly part-time or partyear work. To be certain, these older workers, for whom retirement is neither an option nor a priority, constitute a significant population. The Department of Commerce recently estimated that the number of people between the ages of 25 and 54 will drop between the years 2000 and 2020. Yet during those same years, the number of people between 55 and 64 years is expected to increase by more than 73%. Consequently, not only is the population of older workers growing, but the percentage of those workers who want to keep working longer also is increasing.

Unfortunately, for workers approaching retirement in the United States, there have historically been only four viable choices: continue to work full-time, take a bridge job that is lower in pay and status than previous career work, become self-employed or withdraw from the labor force entirely. Barring fundamental shifts in these traditional work options, huge pools of talented, experienced workers will find themselves either stuck in undesirable labor situations or aged out of the work force. A massive move into retirement would fail to meet the needs and desires of so many older workers looking for career-continuous work that is both flexibly structured and fairly compensated. And it would leave a strain on businesses, which would be burdened with having to recruit and retain replacement talent.

What is developing in the U.S. labour market is a mismatch between the desire of older workers to continue working and the availability of viable opportunities for them. That mismatch makes it incumbent upon business leaders and policy makers to look at options for capitalizing on the talents and interests of older workers. To do so, they will need to understand some of the factors that have led to the labor mismatch as well as to consider some viable solutions. But first, a bit of background is needed, starting with why older workers want to continue working, more so than did their predecessors.

A working retirement

Recent studies have shown that older workers offer a variety of reasons for not wanting to retire, ranging from liking what they’re doing to striving toward unmet career goals. Among the 52% of respondents to a 2002 Conference Board survey who said they were not planning to retire, 62% said that one factor in their decision to keep working was that they found their jobs interesting; 46% of those older workers said they hadn’t yet reached their career goals; 72% said they felt capable of assuming more responsibilities. Also, a 2004 Roper Survey found that 25% of older workers plan to work part time for “enjoyment’s sake.” In addition, an AARP Survey conducted in 2003 revealed that 2 out of 3 older workers continue to work, in part because it makes them feel useful; more than 2 out of 3 work because they like being productive and helping others; and more than 3 out of 4 work because they enjoy the job.

There are also myriad factors outside of work that affect many individuals’ decisions to remain on the job. Often, the choice revolves around a family situation. Research indicates that married couples will often coordinate their decisions to retire. In many other cases, care giving responsibilities rest with the older worker, and a flexible work schedule not only allows them to provide care but also to continue earning a living, including income and benefits. The Conference Board has found that 23% of older workers care for an elderly parent, 22% care for a spouse, 21% care for a school-age child, and 8% care for some other dependent.

What is it, then, that older workers are looking for, in terms of flexible work arrangements?

  • Flexibility in the scheduling of full-time work hours, including flextime or compressed workweeks;
  • Flexibility in the amount of time spent working, including part-time, part-year, or job-sharing and phasing into retirement on a reduced-hours basis; and
  • Career flexibility with multiple points for entry, exit and re-entry, including formal leaves and sabbaticals.

Such flexible schedule options typically are offered for all employees, and not just older workers. It should be pointed out, however, that these flexible options make particular sense for older workers because they allow valued, mature employees to remain active in the work force while still having the opportunity to tend to matters outside of work. Flexible options also make business sense in that they are consistently identified as one of the most effective ways to attract and retain older workers. In a recent Conference Board survey, one out of four older workers indicated that they continue to work because their company provided them with needed flexibility. And, nearly half said that more flexibility would prevent them from retiring.

The ability to work a flexible schedule is the most prevalent work-life policy established by U.S. corporations, according to the Business Work-Life Study conducted by the Families and Work Institute. Flexible schedules can either be fixed (the employee works an alternative schedule that remains consistent) or varied (often requiring that the employee be present during “core” business hours). Four companies recently recognized by AARP as being among the best companies for offering flexible schedules to older workers are Scripps Health, First Horizon National Corporation, Volkswagen of America, Inc., and St. Mary’s Medical Center. Varian also has been recognized for offering this option to its older workers.

A significant group of older workers is interested in either working jobs that allow them to develop new competencies or to work in positions that are less demanding. In many cases, these workers may be interested in making transitions within their same company, either to lateral jobs or to positions which result in a pay decrease. This option is made possible by the availability of company-sponsored training programs that emphasize a company’s commitment to lifelong learning. Among companies recognized by the AARP for their retraining and job transition programs for older workers are The Principal Financial Group, and Deere and Company. The management and consulting firm Deloitte & Touche is also seen as a leader for redesigning career paths to better fit the needs and desires of its older workers.

Organizational obstacles

There are four basic factors, however, that tend to stop employers from developing plans that would support the flexible employment of older workers:

  1. The rigid design and structure of full-time jobs that reflect the priorities and needs of younger workers who are willing to work with less flexible schedules;
  2. Attitudes that stereotype and stigmatize older workers;
  3. Inadequate opportunities for older workers to update their skills so that they match the demands of contemporary jobs; and
  4. An overemphasis on “bottom line” thinking (including focusing on real and perceived costs of retaining and recruiting older workers) and limited attention on the “cost savings” (realized by keeping highly skilled employees who have knowledge about the firm and its practices, as well as by not having to absorb increased recruiting and training costs for new workers).

It’s worth noting that these same obstacles also stand largely in the way of workplace flexibility for all workers, but the mismatch between flexibility supply and demand is particularly apparent for older workers. That mismatch is seen in the results of a recent survey conducted by the Society of Human Resource Management, which suggests that most employers are not yet ready for the graying of the work force:

  • 59% of U.S. employers do not actively recruit older workers.
  • 65% do not actively attempt to retain valued older workers.
  • 80% do not offer employment options, such as flexible schedules, to older workers.
  • 60% of CEOs say their companies do not consider the aging workforce in their longterm,strategic business plans.

Given the lack of active recruitment of older workers and the concomitant lack of choices for quality employment available to older workers, it is not surprising that the Committee for Economic Development found that nearly two-thirds of U.S. firms reported in 1999 that they had difficulty finding older worker job candidates.

Fortunately, there are opportunities to restructure jobs and work so that:

  • businesses benefit from the continued contributions of valued
  • society profits from the extended productivity of those older workers who choose to remain in the labor force, and
  • older workers and their families benefit from the increased resilience that can result fromcontinued labor force affiliation.

A more flexible future

How, then, do American businesses work toward a more flexible future? Fundamental shifts would need to take place, allowing not only for accommodations for older employees who have been with the same employer for a period of time but also for specifically seeking out older workers as part of the recruitment processes. The University of North Carolina has been offering a phased retirement program to faculty since 1998. One primary goal of the program was to provide flexibility and support for faculty nearing retirement. And that seems to be working: a recent survey found that 93% of participants would make the same choice again. The university, meantime, has been able to improve its personnel planning as it relates to retirement. The bottom line of any flexibility initiative is that innovative strategies will need to be pursued, both in terms of voluntary employer and employee practices and public sector policies.

On the matter of public policy, it is worth pointing out that existing policies have often failed to provide incentives for employers to embrace flexibility. That shortcoming would largely be addressed by proposed policy innovations in the following categories:

  1. Policies that promote the likelihood of longer workforce engagement (including Social Security reforms);
  2. Policies that promote phased retirement opportunities (including eliminating legal impediments to formal programs);
  3. Policies that facilitate appropriate job development and re-design, training, retraining, and placement for older workers and their employers; and
  4. Policies that assure workplace and community-based social, economic and other support needed to successfully maintain work.

Barring the types of changes discussed in this paper, U.S. businesses soon will find themselves saddled with either inadequate staffing due to large numbers of baby boomer retirees or inflated payrolls necessitated by having to recruit and employ those workers young enough to stay on the job. At the same time, huge numbers of seasoned, valuable workers would find themselves working under less than ideal conditions, or pushed into retirement at an age at which they are still willing, able and qualified to work.

Clearly then, with the graying of the work force, now is the time for employers to resolve this issue before it becomes an unmanageable problem. Older workers want, and in many cases, need to keep working. The talents and expertise they possess are in demand among employers. And with anticipated changes in public policies, these workers will be encouraged to extend their careers. In the end, even though the U.S. work force will continue to age, the age at which individuals retire will be more acceptable to both worker and employer.

The Authors:

Kathleen Christensen

Kathleen Christensen is the Program Director, Alfred P. Sloan Foundation



Marcie Pitt-Catsouphes

Marcie Pitt-Catsouphes is the Co-Director, Sloan Center for Flexible Work Options and Older Workers



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