Philip Moeller

Philip Moeller

Research and anecdotal evidence find that workplaces often are not welcoming or friendly to older workers, and may be condescending if not actively hostile to them. Employers may be unwilling, unable or simply clueless about the well-established needs of older employees.

Meanwhile, mounds of research also have solidly established that older employees bring a wealth of experience to their jobs. They can be an organization’s most stable and loyal employees, are very trustworthy, great mentors, enjoy work more than younger cohorts and can be every bit as productive as workers in younger generations. If—and it’s a big one—if they are intelligently managed and supported by employers.

Now, hold this thought for a moment and consider a bit of irrefutable demographic information. The United States is running short of workers. Yes, lots of older Baby Boomers are extending their working lives, leading to alarmist stories that they are taking work from younger jobseekers and stalling efforts to begin and establish career paths. But the bigger picture here is that millions and millions of other Boomers are retiring, and their numbers will not be replaced over time by younger and smaller generations. Short of a large and totally unlikely flood of new immigrants into the U.S., many employers will have increasing trouble finding enough new employees, let alone qualified ones.

The happy solution, of course, would be for employers to close this manpower gap by embracing their older workers, retaining the ones who want to stay and putting out the welcome mat for new employees who are in their 60s and even 70s. They would get a great reception from older people who either want to keep working because they enjoy it, or need to keep working because their retirement portraits look like Dorian Gray.

There is a lot that education could do to produce better matches for older employees and workplaces. Often, reading about employer concerns regarding older workers seems like a story written in a foreign language compared with the narrative about how valuable a resource older employees can be.

Even so, the main spoiler to a happy ending to this story is—simply but profoundly—money. Older employees often represent higher expenses to employers. They may make higher salaries than comparably skilled younger persons. Their healthcare costs are higher. In many work settings, they are more likely to become injured and their rehabilitations are longer and costlier. Older employees may receive less training for skills maintenance and upgrading because they are viewed as sunset workers for whom such spending would be a bad investment.

What to do?

More studies and mindfulness strategies are nice thoughts but do we really need more research here? Experience suggests that employers with sizable older workforces will develop effective ways to handle them. The key is to encourage them to develop such workforces. And the best way to do that is to make it worth their while financially.

The biggest levers that exist to effect large-scale behavioral changes among employers are retirement and healthcare costs. These are big employer expenses.

If there’s any good news here it’s that they also are enormous public expenses. Social Security and Medicare have huge price tags that are only going to rise as Boomers get older. Less visible, perhaps, are the sizable hits to the U.S. Treasury from the breaks for tax-deferred retirement accounts and the tax deductibility of employer healthcare premiums.

Obamacare already has caused big attitudinal changes toward employer healthcare funding and, of equal importance, the notion that employers even are the best places to offer healthcare in the first place. It is not hard to see a future where employees go directly to a public or private healthcare exchange for their insurance.

As this likely evolution occurs, healthcare and retirement benefits are more and more likely to be viewed as coming from the same expense bucket. They will be managed as part of a single expense pool and employee costs will be looked at accordingly. Employers would pay “X” dollars for each employee’s benefits. And they shouldn’t care whether those dollars are spent in retirement security or healthcare. Nor where they are spent.

This is all by means of suggesting that changes could be made in Medicare and Social Security that would save employers enough money on the older members of their work forces to greatly reduce if not eliminate any added costs posed by them.

To name one example, why couldn’t Medicare be redesigned to accommodate older persons who are still working? Employers could shoulder some of these healthcare costs, although far less than they’d pay for a non-Medicare employer. Medicare would save money as well. Employees shouldn’t care whether their premiums go to a private insurer though a marketplace or to a private insurer participating in Medicare.

Further, older employers—and their employers—today continue to pay Social Security payroll taxes even if such taxes will add not a single penny to their eventual Social Security benefits. What about creating a payroll tax reduction or exemption for employees of a certain age? This might cost Uncle Sam some payroll tax dollars but wouldn’t the income tax benefit of keeping an older worker on the job more than make up for that hit?

Removing the reality and perception that older employees are a cost burden would lead to the retention and hiring of more aging Boomers. They would be better off and so, likely, would society.


Philip Moeller
Contributing WriterMoney
Authorbook on Social Security, under contract with Simon & Schuster
Speakeron retirement and successful aging
Journalist and EditorAmerican History of Business Journalism
Research FellowSloan Center on Aging & Work, Boston College