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Aged to Perfection or Retired in Place? Managing the Aging Workforce Ethically

by Marcia Dickerson


In the past few weeks, I've had questions from clients about older workers. This is at the same time that news reports tell us that “Roughly 650,000 Americans over 80 were working last year, according to the Census Bureau, about 18% more than a decade earlier.” (Borchers, June 25, 2023, Wall Street Journal). There are many reasons why a person continues to work into their 80s and 90s (read about this here), but this is a relatively new phenomenon, and it’s creating questions for employers. Want to know more about why family business members often don't want to retire? This is a great article.


We cover these issues and more in our Succession Planning Workshop.

Learn more about this course here.


Battling Myths about Older Workers


Before getting in to any discussion of work capabilities or performance of older workers, it’s important to state that many of the beliefs about older workers are untrue. This blog post by Vantage is a great summary of what data show about older workers—they’re often more productive due to experience, they call out sick less often than younger workers, and they’re just as capable of using technology as anyone.


Let’s be clear: many older workers are incredibly valuable contributors and their age should not be of concern. However, we can’t ignore the fact that some employees don’t perform their jobs well, and that some of these employees may be older. Managers have a challenge, then, in that they must verify that they’re not falling prey to stereotypes, nor violating the law. In this post, I’ll cover some of the issues I’ve helped my clients address when it comes to performance of older workers.


Laws You Should Know


Reminder: I’m not a lawyer, and this isn’t legal advice. Consult your attorney before taking any action in regards to older workers.


There are a few laws that apply to the issues my clients face: the Age Discrimination in Employment Act (ADEA) protects applicants and employees aged 40 and older from workplace discrimination on the basis of age when it comes to hiring, promotion, termination, compensation, or similar actions. Thus, if you have an employee who is over 40 who is not performing well, and you want to discharge them, you have to be sure that you’re not basing your decision on their age. That is, you should verify that other, younger workers with performance problems were treated similarly. Additionally, having a paper trail of documented poor performance and feedback indicates that your decision is based on work performance and not age. This is a great article about documenting poor performance.


The ADEA also prohibits setting a mandatory retirement age in most jobs. This means you can’t encourage or pressure an employee to retire just because of their age. In fact, even asking your employees about their retirement plans can be risky—you need to be sure you’re not implying that the employee will be treated differently based on their age (read about this here). Again, however, if an older worker isn’t performing their job adequately, you can take correction action that may lead to termination. You need a lot of good documentation to do this, but if you are truly making a decision based on performance, irrespective of age, you aren’t behaving illegally.


Finally, the Americans with Disabilities Act provides protection to workers who have a current disability, a history of disability, or a perceived disability. This last element may come in to play with older workers. If the employer belies that the employee has a physical or mental challenge due to age, perhaps memory loss or hearing problems, even if those things aren’t truly present, the employee is protected by the ADA because the employer perceives them to be disabled. What then? Disabled workers who can perform the essential functions of the job can request accommodation. As an example, one of my clients asked about an employee with hearing loss. Can the employer require them to get a hearing aid? No, but you can require them to do the essential elements on their job with or without reasonable accommodation. But, the employee decides what accommodation they prefer. And, as described above, if there is a true and documented performance problem, even after accommodation, you can take corrective action or termination.


Older Workers with Performance Limitations


We can agree that it’s a myth that older workers have poorer performance than their younger counterparts as a whole, but still acknowledge that there are workers of every age who are poor performers. You may have an older worker who is disengaged, who has not kept up with changes in their job, or who has slowed or lost work effectiveness. If any of these are true, what can the employer do? You’re never obligated to employ a person who cannot or will not do their job, regardless of their age. Follow the guidelines above in sharing performance expectations, documenting performance, and taking corretive action.


If you’ve got an employee with performance limitations, but they’re still a contributor in other ways, you’re also not obligated to fire them. Perhaps in their current job, they’re worth keeping even with more limited productivity. Older workers are often excellent mentors, have valuable networks, and maintain robust institutional knowledge. If you want to keep an older worker, but they’re not a good fit for their position, you have options. You can reassign them to another job, change their job requirements, or change their working hours. This is called job crafting—creating a job around the particular skills and abilities of an employee you want to retain.


Retirement Incentives


Retirement incentives, or offering a person a lump sum of money and/or continued benefits to retire, are not illegal if done properly. There’s a fine line, and you should consult legal counsel if you’re offering this. But, if you’re overstaffed and have people who may be nearing retirement age, there are ways to offer a financial incentive to do so. The primary concern is avoiding any coercion or pressure.


Phased Retirement


Phased retirement is a relatively new concept, but it’s gaining traction in American businesses. Rather than working full time one day and completely retiring the next, phased retirement programs allow the employee to scale back on work (with reduced pay) over the course of several years. For instance, in year 1, the employee might work 75% of the time for 75% pay and full benefits, dropping to 50% in year 2 and 25% in year 3. This provides an attractive option to an employee who wants to work their way out of the organization or have a more gradual move into retirement. This is also often attractive to employers who get the benefit of the expertise and institutional knowledge of the employee for more years than they may have in the past. And, as noted above, you can’t coerce an employee into phased retirement.

Here's a great article about phased retirement.


Capturing the Knowledge of Older Workers


A final concern many of my clients face is how to capture and record the vast and unique knowledge that many older workers have. At some time, that employee will no longer be working, and maintaining the information that they have can be useful to your organization. This is an issue of succession planning, or preparing employees to take on new leadership roles. If an employee poised to take over a higher level role can learn from a departing older worker, they’re more likely to succeed in their job. So where do you start? There are a number of ways to capture and catalog knowledge, from writing it all down to mentoring to job shadowing. See our Succession Planning Workshop course information here to learn more.


Conclusion


Age discrimination is real and unfortunately common. But, if you have proper HR practices in place, in which you appropriately share work expectations, measure performance accurately, use feedback and coaching to improve performance, and treat people the same regardless of age, you'll be able to manage your workforce well.


Need help? If you’re interested in talking more about anything you’ve read here, get in touch! You can contact us here or at marcia@marciadickersonconsulting.com or 318-278-0097.




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