Too Young To Retire, Too Old To Be Hired

Traditional business policies and mindsets don’t align with workforce realities. Older employees pay the price.

Photo by Curated Lifestyle on Unsplash

The business world stands at an unusual crossroad.

By all accounts, employers across many sectors of the U.S. economy are desperate for talented workers. This is ironic, because thousands of potential workers are right under employers’ noses and yet invisible to them. In fact, employers systematically keep these potential workers far from their doors.

That potential pool is older workers.

Here is how invisible older workers really are. A global survey of the U.S., the U.K., and six other countries conducted by Generation, an international employment training nonprofit, found that the bulk of the long-term unemployed in many countries are people between the ages of 45 and 60, who face major hurdles to finding good jobs.

The problem is that business runs on systems that were designed for a different reality. Systems built on conventional wisdom that older workers are expensive, younger workers are cheap. That older workers run out of energy and new ideas by their 50s and are hanging on until they can retire. It is far easier to turn an aircraft carrier than to change those assumptions, and the business systems built upon them, to meet a different reality.

The assumptions indicate a prejudice against older workers - also known as “ageism.” They are not based on reality today.

Demographic Shift

The reality today, that these prejudiced assumptions cannot adjust to, is this: The world is in the throes of a significant demographic shift. Because of medical advances, people are living longer – and in better health – than ever before. At the same time, birthrates are dropping. Together, these two trends mean that populations around the globe are getting older.

For many decades, most countries’ populations could be charted in a neat pyramid: Lots and lots of children at the base, somewhat fewer young adults, fewer still middle-aged adults, and at the top a tiny number of elders. Now the charts look more like squares. For perhaps the first time in the history of homo sapiens, the number of old and young are roughly equal.

Business is having a talent shortage not because of demographics, but because of its failure to adapt to demographic change. Business runs on personnel systems built to respond to that population pyramid: Hire lots of young people at beginner salaries every year, train them, give them opportunities to grow, promote them, retain them into middle-age, and push them out the door in their late 50s or early 60s – at the point when their salaries are too high and their value to the business too low - to make room for the next wave of young applicants.

Failure to Evolve

The system worked pretty well as long as the population was pyramid shaped. It’s not working well at all now that the high-volume flow of young people has slowed to a trickle.

Meanwhile, at the other end of the funnel, older adult workers are living longer, healthier lives and are not especially ready to stop working. Workers 55 and older also happen to be the fastest-growing segment of the U.S. workforce, according to the U.S. Census Bureau. They accounted for 24% of the labor force in 2022, compared to only 10% in 1994.

Many observers have argued that the experience, maturity, and institutional knowledge of older workers make them particularly valuable business assets. Yet companies continue to forfeit these assets by pushing them through the exit doors automatically.

To say nothing of the personal trauma and financial hardships heaped upon the older workers whose careers are cut short, and who have the difficult if not impossible task of convincing other employers that they are not “too old” to work.

A USA TODAY report published this week presents the stories of 10 Americans who lost their jobs at age 60 and still struggle to get hired – anywhere. They are not eligible for Medicare until age 65, for Social Security at 67. As writer Daniel de Vise’ notes, “There’s no good time to lose your job. But there may be no worse time than around age 60.”

The situation highlights a telling example of the way ageism, though often invisible, shapes policies and affects lives.

Oh, and by the way – despite what you may have heard or read, Artificial Intelligence is not the culprit. An analysis by the Center for Retirement Research at Boston College found that in jobs with high exposure to AI, there are fewer job exits than in low-exposure jobs, which tend to be more physical. Michael Clinton, author of Longevity Nation, suggests AI levels the playing field across generations because of its novelty. “No one’s an expert yet,” he says.

The policies of yesterday are out of touch with reality. They are based on ageist beliefs that do not comport with the abilities and the desires of today’s older workers. They are harmful to employers and employees alike.

What will it take to turn this ship around?