A New Report on the Potential Demand for Older Workers

By Richard Shank

Older workers are expected to be in higher demand in tomorrow’s workforce and are already showing signs of working longer than their recent predecessors.

A recent study sought to address current employer demand for older workers (65+) and how it might change in the future. It began by outlining the occupations that older workers are most likely to be employed in today, then examined the level of employer desire to hire and retain older workers. Finally, it ends by outlining the labor demands of different occupations.

Overall health improvements and the increasing importance of less physically demanding jobs make working beyond traditional retirement ages more feasible. Furthermore, financial pressures associated with growing levels of debt, stagnant wages, and the decreasing availability of pensions, as well as the lack of available retiree health insurance, are currently keeping more and more older adults in the workforce longer than their most immediate predecessors.

This willingness to work longer is, however, not a guarantee for employment. Employers may be unwilling to hire and retain older workers. Most employers report valuing the skills, knowledge, and commitment of older workers, but complain about their higher salaries and, in the view of some, their declining abilities and outdated skills. In short, it is clear that overcoming issues of age discrimination will be important to the increasing employability of older adults.

Older Americans work in a wide variety of occupations. They are distributed across the entire array of occupational categories: about 36% of workers age 65 and older are employed as managers or professionals, 17% work in service occupations, 15% work in sales, 14% work in administrative support positions, and 17% work in blue-collar occupations.

The top 10 occupations with the highest proportion of workers aged 65 and older were: funeral service workers (31.4%); crossing guards (27.7%); farmers and ranchers (25.7%); models and product demonstrators (23.1%); funeral directors (16.3%); tax preparers (14.3%); farm, ranch, and other agricultural managers (13.2%); barbers (13%); tool grinders, filers, and sharpeners (11.6%); and clergy (11.4%). Barber

The aging of the Baby Boomers poses serious challenges to the economic conditions of the country. Over the next 22 years, the number of workers per retiree is expected to decrease dramatically. This drop in the ratio of workers to retirees may impact living standards in negative ways by reducing both the incomes of large percentages of the population and the cash flow of government programs such as Social Security and Medicare. However, if Baby Boomers delay their retirement to the same age their predecessors in the 1950s retired, then the expected decrease in the worker-to-retiree ratio would disappear along with its projected consequences.

This idea of working longer is not a popular one, despite survey research showing a growing tendency to delay retirement. Most workers do not find the prospects of delaying retirement desirable and view both delayed retirement and post-retirement employment merely as a financial necessity. Even so, a delayed retirement comes with financial, health, and social benefits. For example, those who work longer can accumulate more Social Security and pension credits; reduce the number of retirement years their financial asset must support; and increase their post-retirement income benefits by as much as $10,000 annually (for those working five years beyond the age of 62).

The primary question remains whether employers are ready to retain, hire, and promote older workers. The primary obstacle for older workers in capitalizing economically on the growing demographic opportunities remains an employer’s perception of them. Workplace studies demonstrate the widespread existence of ageist attitudes and practices in the workplace. Beyond the measurable benefits of increased productivity and elevated costs associated with the benefits and salary of older workers, the belief that older workers are untrainable, inflexible, and unwilling to learn new skills is widespread. This is primarily the largest obstacle to hiring older workers, as reported in employer surveys.

However, the growing awareness of the potential consequences of the coming retirement of the Baby Boom Generation has led many employers to reevaluate these short-sighted assessments. Most employers recognize that older workers are at least as productive as younger workers, and recent surveys suggest that quite a few employers are taking steps to retain older workers. Between 55 and 75% of employers, in a series of studies funded by the AARP, report concerns about experiencing a talent shortage in the next five years.

Despite being constrained by regulations concerning in-service pension benefits, employers report being open to phased-retirement and post-retirement employment options. The authors conclude that, despite facing labor market challenges, older workers are going to be in higher demand in the coming years.

For more information, see the report at http://www.urban.org.

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