What drives employers’ attitudes to employee age?

By Neil Patrick

Age related behaviours in organisations are not random. They are determined by measureable factors and here’s what they are.

When we are early in our careers, we seek an employer that will support our career progression goals. When we are older, we want our age and experience to be duly valued and utilised. For all of us, knowing which employers have the most enlightened attitudes and policies in relation to their employees’ age is valuable.

The young grumble that employers don’t invest enough in their career development. That they cannot become experienced if they aren’t given opportunities to prove themselves and grow. The old complain their skills and experience are disregarded. That they are overlooked in favour of younger candidates.

Are employers' attitudes to age set in stone?

These are heated debates which often revolve around opinion and anecdote. Neither are very helpful in establishing what’s really going on. So I recently turned to the world of academic research to try and get some hard facts.

I wanted to know what information existed about the behaviour of different employment sectors in this respect. Could these things be measured? And if so, what can we discover about the different behaviours of different employment sectors?

This topic is now important to employers. Not because of a sudden growth in organisational empathy, but for the simple fact that demographic shifts are compelling organisations to recognise and respond to an aging workforce, which risks the loss of key skills and knowledge unless they can adapt to these changes.

But many employers are struggling with this

From an employers’ perspective, it is clear that many are struggling to adopt effective strategies to cope with current demographic shifts. According to Deloitte and the Boston College Center on Aging and Work, almost 6 in 10 businesses report that they have a weakness in creating and managing age diversity programs for their workforces:

“Among global business and HR leaders, 58% reported that their organizations have 'weak' capabilities in 'providing programs for younger, older, and multi-generation workforces’"

Source: Global human capital trends 2014: Engaging the 21st-century workforce. Deloitte University Press.

Do different employment sectors have different attitudes?

Yes and the good news is that age-related behaviours across different sectors can be measured. And when we measure it, we find that different sectors are behaving differently.

In this post I have distilled some of the findings of an academic study titled: “Looking up to regulations, out at peers or down at the bottom line: How institutional logics affect the prevalence of age-related HR practices”.

A couple of weeks ago I was delighted to hook up with one of the authors* of the study, Monique Valcour, Executive Coach, Faculty Affiliate at the Third Path Institute and Professor of Management at EDHEC Business School in Nice.  Monique is also a contributor the Harvard Business Review. She has also been kind enough to review and edit this post with her expert insights. Thank you Monique!

What was the scope of the study?

The paper looked at the aging workforce in the US and which business sectors are doing the most to progress their HR practices to respond to the changing demographics. As the baby boomers steadily exit the workforce, this places an imperative on organisations to respond.

Apart from the demographic shift, the recession has forced many organisations to become ultra-lean versions of their previous selves, making them more vulnerable to the loss of key skills and intellectual capital as the most experienced employees retire from organisations.

The research sampled 420 organisations in the USA with an average of 455 employees.

What factors determine employers’ HR practices related to employees’ age?

The research postulated that employee age-related policies, attitudes, behaviours and HR practices are determined by the presence or absence of three main “organisational logics”. These are the beliefs and assumptions that drive the way an organisation’s leaders interpret information and make decisions related to workforce aging and age diversity. These categories are not mutually exclusive - multiple organisational logics can coexist within a single organisation.

The three organisational logics identified in the study were:

1. A strategic logic exists in organisations that are focused on the financial impact (e.g., ROI, staffing costs) of HR issues and management practices
2. A benchmarking logic exists in organisations that seek to emulate peers in their sector, for example, by benchmarking their competitors’ practices and seeking awards that are recognized within their industry.
3. A compliance logic exists in organisations that are focused on adherence to legal obligations, such as those relating to non-discrimination and to safety.

Takeout: Like people, organisations often behave according to overall sets of assumptions and beliefs that affect what information they pay attention to and how they respond to the information they take in.

What did the research find?

Organisations are more likely to actively assess the age demographics of their workforce when they are focused on benchmarking competitors and/or on regulatory compliance. These two logics also tend to be reflected in HR practices targeted at older workers (like transferring knowledge from older to younger employees and providing options for phased retirement).

Organisations are more likely to use age-neutral HR practices, such as recruiting and promoting employees of diverse ages, when they have a strong strategic and/or benchmarking logic.

Which sectors are most likely to assess age so that they can respond to shifting demographics?

The research found little difference across sectors, except that organisations in the mining and oil and gas sector are more likely to use age-neutral HR practices, while organisations in the arts, entertainment and recreation sector are less likely to actively assess the age demographics of their workforces or to use age-targeted or age-neutral HR practices.

Which sectors are most likely to respond to the practices of their peers in relation to employee age?

The financial and STEM sectors were slightly more likely to adjust their behaviours and decisions with external references to their peers, while the health care and social assistance sectors were slightly less likely to make use of this benchmarking logic.

What this tells us

There are two elements in organisational behaviour required to create an effective response to the ageing workforce. First is the gathering and interpretation of relevant data. Second is the conversion of this data into HR policies, procedures and practices which contribute to addressing the problem.

This research proved that a correlation exists between these three organisational logics and behaviours which contribute to positive practices with regard to employee age. In other words, the greater an employer’s focus on strategy, benchmarking and/or compliance, they more likely they are to measure employee demographics and attempt to respond to the changes with positive practices to protect their future human resource.

The inverse is also implied – if an employer pays scant attention to strategy, benchmarking and/or compliance, they are less likely to have adopted positive practices for managing the demographic aspects of their workforce.

If you are seeking an employer with the most progressive attitudes and positive practices relating to employee age, don’t rely on hearsay or anecdote, but instead consider the presence or absence of these three organisational logics. It’s not a guarantee, but it is a statistically proven indicator.

*The full list of contributing authors was:

Ariane Ollier-Malaterre Rouen Business School, France (now at the Université du Québec à Montréal)

Tay McNamara Sloan Center on Aging & Work, Boston College, USA

Christina Matz-Costa Graduate School of Social Work, Boston College, USA

Marcie Pitt-Catsouphes Graduate School of Social Work, Boston College, USA

Monique Valcour EDHEC Business School, France