1. Workforce Planning: Aging and Employment Module 1: Background Barbara McIntosh, Ph.D., SPHR 2010

2. ©SHRM 2010 2 Module 1: Learning Objectives At the end of this module students will be able to: Appreciate the characteristics of normal, successful aging. Understand the legal and social policy backdrop for the aging U.S. labor force. Discuss the labor force dynamics facing older workers and employers.

3. ©SHRM 2010 3 Learning Objectives Continued Recognize changing perceptions about aging and contribution in society. Identify the issues confronting employers regarding older workers. Understand the effect of age on work role. Outline necessary changes in HR policies and practices with respect to aging workers. Explain the economic incentives and disincentives to work confronting aging Americans. Analyze employment options and the applicability of international examples.

4. ©SHRM 2010 4 Suggested Texts Leibold, M., & Voelpel, S. (2006). Managing the Aging Workforce. Germany: Wiley-VCH. Rothwell, W.J., Sterns, H.L., Spokus, D.& Reaser, J. (2008). Working Longer. New York: AMACOM. Hedge, J., Borman, W., & Lammlein, S. (2006). The Aging Workforce. Washington DC: The American Psychological Association.

5. ©SHRM 2010 5 Essential Resources: Professional Associations Society for Human Resource Management (SHRM), www.shrm.org. AARP, www.aarp.org. Gerontological Society of America, www.geron.org. National Council on the Aging (MaturityWorks Alliance),www.ncoa.org. American Society on Aging (Business Forum on Aging), www.asaging.org. Association for Gerontology in Higher Education (AGHE), www.aghe.org. Chamber of Commerce, Institute for a Competitive Workforce, www.uschamber.com. Urban Institute, www.urban.org.

6. ©SHRM 2010 6 The Current Pulse Government sources U.S. Department of Labor: The Women’s Bureau and the Bureau of Labor Statistics Governmental Accountability Office: Administration on Aging, etc. Clipping service Daily clipping service of where aging issues appear in the worldwide press: Current Awareness in Aging Research E-Clippings (fiss@ssc.wisc.edu).

7. Modules Overview Background. Labor markets. Aging employee perspective. Employer perspective. Managing productivity. Careers and aging workers. Economic considerations; incentives and disincentives to work. International perspectives. ©SHRM 2010 7

8. Module 1: Background Introduction: > Why are we concerned? > Definitions. Forces extending work life. Forces restraining work/life extensions. Overview of demographics/context. Normal aging and health. Stereotypes. Age discrimination issues. Legislative proposals. ©SHRM 2010 8

9. Aging and Employment: Why Is HR Concerned? The economic downturn means people are working longer and delaying retirement. Shifting demographics. Predicted labor shortages (even with the economic downturn; industry-specific). Brain drain and organizational learning. Improvements in life expectancy mean more workers are productive in later life. Pensions and health care financing. Intergenerational issues and HR policies and practices. ©SHRM 2010 9

10. Definitions What is old? > Perception. > Legal definition. > Behavior. > Cohorts. What is work? > Productive activity. ©SHRM 2010 10

11. Forces That Extend Work Life Economic necessity (older employee). Psycho-social needs (older employee). Better jobs (knowledge workers). Flexibility (hours) availability. Increased work/life balance emphasis. HR policies (employer). > Labor shortages, particularly in the health care industry. > No mandatory retirement age. Government policy. > Social Security viability. ©SHRM 2010 11

12. ©SHRM 2010 12 More Americans Are Working Longer Between 2000 and 2008, the number of workers aged:  65 to 69 increased 25 percent.  70 to 74 increased 32 percent.  75 to 79 increased 38 percent.  80 and older increased 67 percent (BLS, 2009). Living longer and public expectations about retirement are in transition (Pew Research Center).

13. Men’s Participation in the Labor Force ©SHRM 2010 13

14. Women’s Participation in the Labor Force ©SHRM 2010 14

15. ©SHRM 2010 15 Forces Restraining Extension of Work Life High unemployment. Slow-growth economy. Changing skill mix in demand. Youth culture. Hiring and retention practices. Increased labor costs. Labor union policy (in some cases). Intergenerational conflict. Negative stereotypes about older workers.

16. ©SHRM 2010 16 Demographics In 2000, there were 35 million Americans aged 65 and older in the U.S., representing 1 in 8 Americans. By 2030, 1 in 5 (20 percent) will be 65 and older. The increase is due to the baby boom; 76 million Americans were born between 1946 and 1964. The “old-old” (85 and older) is the fastest growing cohort. Decreasing fertility: The “baby bust.” Gender gap: Women outlive men. At age 85, there are 41 men for every 100 women. Diversity: In 2000, 84 percent were white. It is forecast that this will drop to 64 percent by 2050.

17. Number of Older Americans ©SHRM 2010 17

18. Number of Older Americans ©SHRM 2010 18

19. Educational Attainment ©SHRM 2010 19

20. Poverty ©SHRM 2010 20

21. Life Expectancy ©SHRM 2010 21

22. ©SHRM 2010 22 Projected Demographic Shift Ratio of population age 20 to 64 compared to age 65 and older. (Those working to those traditionally not working.) Source: Congressional Budget Office Based on Social Security Administration Data

23. ©SHRM 2010 23 Normal Aging: Health Physical: > Strength. > Reaction time. > Senses. Mental. Psycho-social. Self-perceptions (social-cognition).

24. Respondent-Assessed Health Status ©SHRM 2010 24

25. Future Expectations on Health Behavioral changes, e.g., smoking cessation. Self-perception changing re: physical and mental conditions. Continuous improvement in availability of preventative care. Changes in societal/market/organizational responses to health limitations. Medical advances, e.g., joint replacement and continued activity. ©SHRM 2010 25

26. Factors Influencing Health Economic security, i ncluding the opportunity to work. Access to preventative care. Education. Family relations (care giving, support, stress). Social cognition (perceived role in society). Community support. ©SHRM 2010 26

27. ©SHRM 2010 27 Life Expectancy of 65-Year-Olds Over Time Source: Congressional Budget Office based on Social Security Administration

28. ©SHRM 2010 28 Commonly Held Stereotypes “To be old is to be sick” ~ 50% of American believe health is a “very serious problem” for individuals over age 65 Reality? [See: Palmore, E. (1999). Ageism. Springer Publishing]

29. ©SHRM 2010 29 Commonly Held Stereotypes (continued) Older people have more accidents. Reality? Mental abilities decline with age. Reality? You can’t teach an old dog new tricks. Reality?

30. ©SHRM 2010 30 Commonly Held Stereotypes (continued) Older workers usually cannot work as effectively as younger workers (Palmore, 1998). Reality?

31. ©SHRM 2010 31 Age Discrimination in Employment Increasing prevalence:Increasing prevalence: > 24,582 age discrimination cases filed with EEOC in 2008 (a 30 percent increase over 2007). This represents 26 percent of all discrimination cases. In 2004, the cost of negotiated settlements in federal age discrimination complaints totaled $69 million (AARP, 2006).In 2004, the cost of negotiated settlements in federal age discrimination complaints totaled $69 million (AARP, 2006). In 2002, 67 percent of surveyed workers 45 to 74 (n=1500) reported that they believed there was age discrimination in the workplace (AARP, 2003). This dropped to 60 percent in 2007 (AARP, 2008).In 2002, 67 percent of surveyed workers 45 to 74 (n=1500) reported that they believed there was age discrimination in the workplace (AARP, 2003). This dropped to 60 percent in 2007 (AARP, 2008).

32. ©SHRM 2010 32 Types of Employment Discrimination An AARP survey showed that: > Nine percent of respondents reported being passed up for promotion or a chance to get ahead because of age. > Fifteen percent of respondents reported not getting hired for a job applied for because of age. > Six percent of respondents reported being laid off, fired or forced out of a job because of age. > Five percent of respondents reported being passed up for a raise because of age. Source: AARP, 2002

33. ©SHRM 2010 33 Legal Sources Bill of Rights/Constitution.Bill of Rights/Constitution. Civil Rights Act 1964.Civil Rights Act 1964. Age Discrimination in Employment Act (ADEA) 1967.Age Discrimination in Employment Act (ADEA) 1967. Future:Future: > Americans with Disabilities Act (1990). > Case law. > New legislation.

34. ©SHRM 2010 34 Age Discrimination in Employment Act Right to gainful employment has long been recognized. Originally passed in 1967 with a mandatory retirement age 70, it was amended in 1987 to eliminate mandatory retirement.Right to gainful employment has long been recognized. Originally passed in 1967 with a mandatory retirement age 70, it was amended in 1987 to eliminate mandatory retirement. Use of an individual’s age as a criterion for employment is generally forbidden; only where age is a bona fide occupation qualification (BFOQ) may it be used as a factor in employment decisions.Use of an individual’s age as a criterion for employment is generally forbidden; only where age is a bona fide occupation qualification (BFOQ) may it be used as a factor in employment decisions.

35. ©SHRM 2010 35 ADEA Protection Covers workers 40 years of age and older.Covers workers 40 years of age and older. Applies to organizations with 20 or more employees.Applies to organizations with 20 or more employees. Applies to organizations engaged in interstate commerce.Applies to organizations engaged in interstate commerce. Does not cover bona fide executive or high policy makers (attained the age of 65 and held the position for two years) if entitled to a retirement benefit of at least $44,000.Does not cover bona fide executive or high policy makers (attained the age of 65 and held the position for two years) if entitled to a retirement benefit of at least $44,000.

36. ©SHRM 2010 36 Unlawful Employer Practices To fail or refuse to hire or discharge any individual or otherwise discriminate against any individual with respect to his or her compensation, terms, conditions or privileges of employment because of the individual’s age;To fail or refuse to hire or discharge any individual or otherwise discriminate against any individual with respect to his or her compensation, terms, conditions or privileges of employment because of the individual’s age; To limit, segregate or classify employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his or her status as an employee because of the individual’s age; orTo limit, segregate or classify employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his or her status as an employee because of the individual’s age; or To reduce the age rate of any employee in order to comply with this chapter.To reduce the age rate of any employee in order to comply with this chapter.

37. ©SHRM 2010 37 Exceptions Age as a bona fide occupational qualification.Age as a bona fide occupational qualification. Other reasonable factors.Other reasonable factors. Laws of a foreign workplace.Laws of a foreign workplace. Seniority system.Seniority system. Employee benefits system.Employee benefits system. Discipline or discharge for good cause.Discipline or discharge for good cause.

38. ©SHRM 2010 38 Court Interpretations Applicants must be judged on non-age related issues:Applicants must be judged on non-age related issues: Courtney v. Biosound, Inc., 42 F3rd 414 (7 th Cir. 1994). Promotions must be based on merit:Promotions must be based on merit: Barber v. CSX Distribution Services, 68 F. 3d694 (3 rd Cir. 1995).

39. ©SHRM 2010 39 Court Interpretations (continued) It is illegal to terminate an employee due to age considerations:It is illegal to terminate an employee due to age considerations: Benjamin v. United Merchants and Manufacturers, Inc., 873 F.2d 41(2nd Cir. 1989). It is illegal, with exceptions under ADEA, to force an employee to retire:It is illegal, with exceptions under ADEA, to force an employee to retire: Verbracken v. Westinghouse Electric Corp., 881 F.2d 1041 (11th Cir.1989).

40. ©SHRM 2010 40 Labor Market Realities You are over qualified.You are over qualified. This job would not be a good fit for you.This job would not be a good fit for you. The job has been filled.The job has been filled. We will keep you posted.We will keep you posted.

41. ©SHRM 2010 41 Educate All Recruiters Recruiters and interviewing managers should be sensitized to conscious and unconscious stereotypes.Recruiters and interviewing managers should be sensitized to conscious and unconscious stereotypes. Focus should be on job description and required job performance.Focus should be on job description and required job performance. Interviewing teams should include at least one mature worker.Interviewing teams should include at least one mature worker. Screening materials and tests should be printed in 12-pt or 14-pt type.Screening materials and tests should be printed in 12-pt or 14-pt type. Screening materials and tests should allow for variation in completion time.Screening materials and tests should allow for variation in completion time.

42. ©SHRM 2010 42 Tips for the Older Applicant Facing Discrimination Options: Walk away or educate (flight or fight).Options: Walk away or educate (flight or fight). Prepare :Prepare : > Network: Contacts could be respected community members, business associates and former bosses. Who do you know? > Do your homework: Be articulate about financial position, growth profile and development opportunities. What do you know? Present with a smile.Present with a smile. Other??Other??

43. ©SHRM 2010 43 The Bottom Line The economy is pushing older workers to remain in the labor force.The economy is pushing older workers to remain in the labor force. American workers are living longer, healthier lives.American workers are living longer, healthier lives. Expectations about work in later life are changing.Expectations about work in later life are changing. Stereotypes about older workers still exist.Stereotypes about older workers still exist. The legal environment and the increasing numbers of older workers mean that discrimination must be actively addressed.The legal environment and the increasing numbers of older workers mean that discrimination must be actively addressed. The business environment needs to change in response to the aging workforce.The business environment needs to change in response to the aging workforce.