By AARP, Special for USDR
A new AARP study debunks myths about age 50+ workers, showing that they have productive advantages that can make them a “critical component” of a successful business.
The report, “A Business Case for Workers Age 50+: A Look at the Value of Experience 2015,” was prepared by Aon Hewitt, the global talent, retirement, and health solutions company of Aon plc. It finds that the business case for employing workers age 50+ has grown even stronger in the last 10 years, reinforcing a 2005 AARP study that found that these experienced workers are highly motivated, productive and cost effective.
“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 today in releasing the 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.
Roselyn Feinsod, senior partner at Aon Hewitt, said “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.”
The AARP report comes at a time when experienced workers are playing an increasing role in the workplace. In 2002, workers age 50+ made up 24.6 percent of the workforce. By 2012, they were 32.3 percent. And by 2022, they are projected to represent 35.4 percent of the total workforce.
The new study addresses the misconception that older workers cost “significantly more” than younger workers. In fact, adding more age 50+ talent to a workforce “results in only minimal increases in…labor costs,” AARP found. For one thing, the report notes that 90 percent of large employers now base pay in part on performance, rather than exclusively on tenure.
In addition, in terms of retirement costs, only 22 percent of large companies now offer a defined benefit pension plan, down dramatically from the 68 percent in 2004.
Looking at the 50+ segment of the workforce from a performance standpoint, AARP and Aon Hewitt report that older workers remain the most engaged age group. The study states 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,” according to the report.
That translates 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.”
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.
The Business Case study is the second major workforce-related report by AARP in the past several weeks. On March 30, the AARP Public Policy Institute released a landmark report showing that, despite recent economic gains, half of the people ages 45 to 70 who experienced unemployment during the past five years are not currently working. Among those who had become reemployed, nearly half said they were earning less than in their previous jobs.
AARP is a nonprofit, nonpartisan organization, with a membership of nearly 38 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name as well as help our members obtain discounts on a wide range of products, travel, and services. A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the world’s largest circulation magazine; AARP Bulletin; www.aarp.org; AARP TV & Radio; AARP Books; and AARP en Español, a Spanish-language website addressing the interests and needs of Hispanics. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. The AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at www.aarp.org.