The Value of Experience

Benefits can outweigh costs of hiring older workers

Jo Ann Jenkins, CEO

AARP

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Published May 19, 2015

/ Updated June 23, 2015

AARP CEO Jo Ann Jenkins

When I decided to leave my job as chief operating officer at the Library of Congress in 2010 to join AARP as president of AARP Foundation, conventional wisdom — as well as many of my friends — said I should just retire. After all, with 25 years of government service, I was eligible for my pension, my husband had just retired and my kids were grown. There was only one thing wrong: I wasn't ready to retire. I just wanted to do something different, and AARP provided me with that opportunity.

My story is not unique. Millions of people are reaching traditional retirement age and discovering that they're not ready to retire. They believe that their experience has value. They want to apply the wisdom they have gained from their life experiences, and they believe, as do I, that they are more purposeful and valuable employees because of their age.

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But they face skeptical employers, many of whom believe that older workers are a detriment to their organizations and therefore are hesitant to recruit, retain and retrain them. These employers are mired in outdated,negative stereotypes of older workers as being too costly, inflexible, not technologically savvy and a drain on the productivity of their businesses.

Thankfully, some employers are beginning to see the light. Facing a declining population of younger workers and a projected shortage of talent in many areas, savvy employers are turning to workers 50-plus to gain and maintain a competitive edge.

A new report, "A Business Case for Workers Age 50+: A Look at the Value of Experience 2015," commissioned by AARP and conducted by Aon Hewitt, debunks the myths about older workers and shows that they have productive advantages that can make them a critical component of a successful business.

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Just as today's 50-plus population is disrupting aging and eroding negative stereotypes, workers 50-plus are adding value by exhibiting highly sought-after traits in today's economy that employers need and want, including: experience and engagement, maturity and professionalism, a strong work ethic, loyalty, reliability, knowledge and understanding, and the ability to serve as mentors. With these traits, they are in a prime position to help close the talent shortage U.S. employers face.

The report also addresses the misconception that older workers cost significantly more than younger workers. Adding more age 50-plus talent to a workforce results in only minimal increases in labor costs, primarily for two reasons. First, more companies now offer 401(k)-style savings plans rather than traditional pensions based on years of service. While this has lessened retirement security for workers, it has virtually eliminated the differences in employers' retirement-benefit costs across employee age groups. Second, over the past decade, employer-paid health care costs for workers 50-plus have risen more slowly than for younger workers. Additionally, 90 percent of large employers now base pay in part on performance, rather than exclusively on tenure.

The fact that employers are beginning to see the value of employees 50-plus is good news for the nearly two-thirds of older workers nationwide who see themselves working in retirement either out of choice or necessity. It's also good news for the growing number of employers who have begun implementing innovative practices to attract and retain workers 50-plus. They are learning that older workers highly value nonfinancial offerings, such as flexible work schedules, telecommuting options, training and education opportunities, phased retirement programs and transition jobs that allow them to move into some other kind of work.

As for those employers who have been slow to adapt to the changing workforce — largely because of negative stereotypes and outdated notions about the value of older workers — they should learn what those of us 50-plus have realized all along: Experience adds value.

Jo Ann Jenkins is the chief executive officer of AARP.

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