Report: Hiring Older Workers Makes Good Business Sense

Published in Woonsocket Call on May 3, 2015

Here’s a sound strategy for America’s CEOs to follow to improve their corporation’s bottom line. AARP’s recently released study suggests, just hire or retain older workers.

An AARP study, released on April 27, discredits widespread myths and misconceptions about age 50+ employees, showing that they have skills and abilities that can make them key to operating a successful business. The report, “A Business Case for Workers Age 50+: A Look at the Value of Experience 2015,” says that the argument for employing older employees has grown even stronger during the last decade, reinforcing a 2005 AARP study that found that these experienced workers are highly motivated, productive and even cost-effective.

Researchers claim that this study documents for the “first time why attracting and retaining experienced age 50+ workers is critical for businesses seeking an advantage in the labor market.”

Older Workers Sound Investment

“Leading employers across all industries value the expertise and experience of workers 50+ and know that recruiting, retaining and engaging them will improve their business results,” said AARP CEO Jo Ann Jenkins in her statement on the releasing the 92 page report.

Just as today’s 50+ population is disrupting aging and eroding negative stereotypes, today’s 50+ workforce is adding value by exhibiting traits that are highly sought after in today’s economy,” Jenkins added.

Adds Roselyn Feinsod, senior partner at Aon Hewitt, a multinational company providing human resources, retirement and health solutions, that prepared this report, “Workers age 50+ are highly valuable within many organizations – particularly in those industries that require highly skilled workers or workers with unique skill sets, such as health care or energy.”

Researchers say that the AARP report comes at a time when experienced workers are playing an increasing role in America’s workplace. In 2002, workers age 50+ made up only 24.6 percent of the workforce. By 2012, they were 32.3 percent. By 2022, they are projected to represent 35.4 percent of the nation’s total workforce.

The AARP new study addresses a widespread misconception that older workers cost “significantly more” than younger workers. In fact, adding more talented older employees to your workforce can result in only minimal labor cost increases, says the researchers, noting that 90 percent of large employers now base pay in part on job performance, rather than exclusively on length of employment.

In addition, in terms of retirement costs, only 22 percent of large companies now offer a defined benefit pension plan, down significantly from the 68 percent in 2004.
Looking at the 50+ segment of the workforce from a performance standpoint, AARP and Aon Hewitt say that older workers remain the most engaged age group. The study reports that 65 percent of workers age 55+ are considered “engaged”, based on survey data, while younger employee engagement averages 58 to 60 percent.

Although the generational differences in engagement might not seem large, “it takes only a five percent increase in engagement to achieve three percent incremental revenue growth,” the report finds. This can translate into a large company with $5 billion in revenue achieving a $150 million revenue increase as a result of even a five percent engagement improvement, the study says.

The report concludes “An engaged older workforce can influence and enhance organizational productivity and generate improved business outcomes.” Other advantages of older workers include their job experience, professionalism, strong work ethic, lower turnover, and knowledge.
AARP commissioned the study to assess the advantages of both retaining and attracting older workers. The analysis relies primarily on data from Aon Hewitt databases, an extensive literature review and interviews with 18 large employers to obtain anecdotal information on how they approach older workers.

Contributing to Rhode Island’s Economy

“We have noted in the past the relevance of Rhode Island’s so-called Longevity Economy,” said AARP Rhode Island State Director Kathleen Connell. “Despite being just 36% of Rhode Island’s population in 2013 (expected to grow to 38% by 2040), the total economic contribution of the state’s 50-plus population accounted for 46% of Rhode Island’s GDP ($24 billion). Now we see another reason to embrace the older population.

Connell notes that “This new report reinforces the value of older Rhode Islanders as they continue to be a key asset in the workforce. It is especially good to have reliable data that exposes the false concept that older workers cost significantly more than younger workers. The truth is, that older workers increase labor costs minimally while contributing experience and stability to businesses across the spectrum.

“Many employers in Rhode Island understand this. AARP Rhode Island gets frequent calls from business actively seeking older workers. They know the value and the wisdom they bring to the workplace,” says Connell.

According to Charles Fogarty, Director of the Division of Elderly Affairs (DEA), the recently released AARP study helps his agency spread this message, “older workers are expected to play a key role in sparking Rhode Island’s comeback.”

“We support policies and programs to help this crucial segment remain active in the labor force by connecting older workers to services and training,” says Fogarty, noting that AARP’s study confirms, “our seniors are a valuable asset in our workforce given their wealth of knowledge, ability to mentor younger colleagues, and commitment to hard work.”

Deputy Director Lisa D’Agostino, of the state’s Department of Labor and Training agrees with DEA’s Fogarty. “Age 50+ workers are a talented segment of our workforce that is often overlooked and untapped when businesses seek workforce solutions. Given today’s demand for a skilled workforce the solution is simple – mature workers can bring the talent, leadership and work ethic employers need,” she says, noting that labor force participation for this group is on the rise and unemployment rates are lower than that of the prime working age population and have been for the last ten years.

Oak Hill resident Hank Rosenthal, 64, confirms the importance and value of hiring older workers. But, during his two-year job search, after being laid off, he experienced job discrimination, he claims. “Having been interviewed by numerous Human Resource professionals, they just seem incapable of understanding that the years of experience someone has gained is an asset. They seem unable to appreciate that knowledge, experience, and even skills acquired over a lifetime can be transferred and used in virtually any organization or business,” he says.

Rosenthal, now gainfully employed, views his older contemporaries as being “more stable, reliable, have better work ethics and generally make great employees, in line with the observations of the AARP report. With the difficulty in finding employment he believes that companies have not figured this out yet. “What a terrible waste of human capital,” he says.

While older workers may be forced to continuing working to pay their bills, many employees will take jobs for both psychological and social fulfillment. Hiring and retaining older workers may be a simple way for American businesses to maintain their competitiveness in a world economy. The report says that this can easily be accomplished by having “flexible workplaces, options for transitioning to retirement and fostering generational diversity and inclusion.” The AARP report is a must read for any CEO or Human Resource Director.

For the full report, go to http://www.aarp.org/research/topics/economics/info-2015/business-case-older-workers.html.

Herb Weiss, LRI ’12, is a Pawtucket-based writer who covers aging, health care and medical issues. He can be reached at hweissri@aol.com.

Rhode Island Families Can Benefit from Expanding State’s TDI Program

Published in Pawtucket Times, May 17, 2013

In the 2012 legislative session, it was very easy for Pawtucket Rep. Elaine A. Coderre to say yes to Sen. Rhoda E. Perry, when the Providence lawmaker came looking for a House sponsor of S 2734. Perry’s legislative proposal would amend the State’s existing Temporary Disability Insurance (TDI) program to include coverage for caregivers who care for loved ones during a health care emergency or to take time off to bond with a child.

Years before, unexpectedly being pushed into the role of caregiver would bring Coderre to become the primary sponsor of H 7862, the companion bill to S 2734. To the disappointment of the Pawtucket lawmaker and her Senate colleague, their legislative proposal would be held for further study, effectively killing it.
Understanding a Caregivers Needs

In 1997, taking care of her dying mother became time-consuming for Coderre, a part-time lawmaker who served full-time as Executive Director of the Emergency Shelter of Pawtucket. Before the onset of the terminal illness, Coderre’s 78-year-old mother had lived independently on the second floor of her daughter’s three floor tenement.

With her elderly mother quickly losing her ability to live independently, being diagnosed with fourth stage Alzheimer’s disease and fourth stage colon cancer, the fifty-year old Coderre instantly became a very stressed caregiver

For over ten months, Coderre skillfully juggled the responsibilities of working two very challenging jobs, meeting family demands, and becoming the primary caregiver to her frail mother. To provide care seven days a week, 24 hours a day, Coderre would rely on her husband, three adult children, sister and her husband, to assist.

“It was a scheduling nightmare, remembered Coderre, referring to the complexity of making sure each family member was inked in the schedule and were notified when to report for duty. “We were committed to making my mother, in her final days, feel safe, secure and to have a quality of life,” she said, noting that her family did work well together, making the care giving schedule work

Looking back, Coderre considers herself extremely fortunate because she had her immediate family and was able to hire a homemaker, to provide more of the physical care, from 9:00 a.m. to 4:00 p.m.
Supporting Temporary Caregiver Insurance

But, Coderre realized from this experience and calls from constituents that not everyone has a large network of family and friends, or adequate finances to take care of a very sick loved one, even to know where to find caregiver support services. Becoming a care giver to a frail family member, an experience that many Rhode Islanders will face during their adult life, pushed Coderre to again become the primary sponsor of House legislation to create a Temporary Caregiver Insurance Program (TCIP), for the second time around.

During the 2013 legislative session, Coderre has joined Sen. Gayle Goldin, who represents areas in Providence’s Eastside, to reintroduce companion measures in the Rhode Island General Assembly (H 5889 and S 231) to create a TCIP. The legislative proposal, modified to address opponent concerns from the last session over the length of the benefit, would expand TDI to employees who must take time out of work to care for a family member or bond with a new child in their home.

If enacted, employees would be eligible to receive up to 8 weeks of replacement income while providing care for a seriously ill family member or new child. The law would provide employees with job security by allowing them to return to work when their caregiver responsibilities have concluded. The average weekly benefit for an employee would be $408.

Like Coderre, Goldin, a first-term Senator, had her own life experience as a caregiver. Over the years she, as a family advocate, she has also talked with many parents who told her of their own children’s health needs and financial and emotional stress it created and how important this program was for them.

“Paid family leave is a cost-effective way to give employees the time to balance family and work responsibilities without jeopardizing their economic security,” said Goldin.

In the early 2000s, Goldin’s interest in research on TCIPs was piqued when the program was implemented in California. Last year, as a member of the Providence-based Women’s Fund of Rhode Island’s Policy Institute, she brought this knowledge to the table when working with seven women to get legislation introduced on Smith Hill.

At that time, out of five state’s nationwide that had TDI, like Rhode Island, identified two (California and New Jersey) allowed the program to be used by caregivers, not just those who are suffering the illness or injury themselves.

The research findings gathered from the Women’s Fund of Rhode Island’s Policy Institute would give ammunition to Sen. Perry and Coderre to push for the TDI program expansion in 2012. When Goldin took over Perry’s Senatorial seat when the long-time Providence Senator retired, she picked up the TDI cause, bringing Coderre back to the plate this legislative session, to assist her in the House.
Advocates Rally to Support

On April 11, eleven groups, including AARP Rhode
Island, the Senior Agenda coalition, Woman’s Fund of Rhode Island, the Economic Progress Institute, Rhode Island Kids Count, and the Rhode Island SEIU State Council, came before the House Finance Committee, to push for passage of H 5889.

Dr. Marcia Conè, Ph.D., CEO, of the Woman’s Fund of Rhode Island, told lawmakers that the TCIP is just an updated extension of the current TDI program that “best addresses the new health and lifestyle changes of today’s society, giving “everyone the flexibility of needed to balance the new realities of family and work responsibilities.”

To put the brakes to a “brain drain” out of the Ocean State, due to higher salaries available in bordering states, Dr. Conè stressed that H 5889 would offer what all employees need, time off to care of family business in a crisis. “The prestige of having the most family friendly work environment in New England is a very strong incentive for families to stay in the state to make Rhode Island their home,” she told the panel.

In her testimony, Executive Director Kate Brewster, of The Economic Progress Institute, stated that the state’s Parental and Family Medical Leave Act of 1987, and the Federal Family Medical Leave Act of 1993, give employees up to 13 weeks of “unpaid leave” to care for a family member or new child. “These laws protect employees’ jobs, but not their wages,” she said, observing that low-income Rhode Islanders can not afford to take unpaid time off from work, they need their wages.

Countering Brewster’s comments, submitted testimony by R. Kelly Sheridan, representing The Greater Providence Chamber of Commerce, warned that H 5889 would expand the State’s existing TDI program to allow employees time off to care for family members, when most states do not even have a TDI system. This expansion “would make Rhode Island’s business climate an outlier compared to our neighboring states and would send the wrong message to the business community regarding improving the business climate in our state,” he said.

While Matt Weldon, Assistant Director, of the State’s Department of Labor and Training, took no position on the TCIP legislative proposal, he came to answer questions. Weldon noted that there could be a .2 increase to the rate an employee is mandated to pay into TDI. Currently, the state program takes 1.2% of the first $61,400 out of an employee’s paycheck.

Maureen Maigret, Policy Consultant for the Senior Agenda Coalition of Rhode Island, told the House panel that nobody can predict when a family crisis will come, specifically “the critical illness of a child or spouse, an older person’s fall and subsequent need for care.”

Maigret estimated, for just pennies per week paid by workers – the cost of a cup of coffee — passage of H 5889, would allow workers to take temporary leave to deal with sudden critical family needs and still have some income.

With the Rhode Island General Assembly gearing up to finish the people’s legislative business by the middle of June, We Care for Rhode Island (WCRI), a grass roots coalition consisting of 32 organizations, including small business owners, workers, policy centers and family and health care advocates, was established at the end of April, to push for the passage of a Rhode Island TCIP.

Last Saturday, visiting local retail stores on Hope Street, Steve Gerencser, of WCRI, passed out literature, calling on owners to support his group’s attempts to create a TCIP in the Ocean State. “It can be a boon for businesses,” he says, citing a 2011 research study detailed on his Legislative Fact Sheet, supporting the passage of H 5889 and S 231. Gerencser notes that the findings estimate that program would save employers $89 million a year by improving employee retention and reducing turnover costs.

Goldin agrees with WCRI’s assessment a TCIP’s benefit to businesses. Moreover, she claims that there is really no impact on the State’s budget, to start up this new program. “It’s revenue-neutral and is solely funded by the employee, business owners and taxpayers do not contribute.”

With a negligible expense to implement, with no cost to the taxpayer or even the business community, it’s penny-wise and pound foolish for state lawmakers to not create a Temporary Care Giver Insurance Program, to financially assist Rhode Island employees when they take off time to help seriously ill family members or to care for newly adopted child.

Sound public policy, like this legislative proposal, can only send a clear message across the United States, that the Ocean State is finally taking steps to become more family-friendly, a great way to competitively attract large corporations and even smaller businesses into our borders.

Herb Weiss, LRI ’12, is a writer covering aging, health care and medical issues. He can be reached at hweissri@aol.com.