Older Workers Shine in Study Of Performance
Employers find flexible workers with low turnover and absenteeism. MODEL EMPLOYEES
OLDER workers are as productive and cost-efficient as younger workers - and perhaps less likely to be absent from work or change jobs than their younger counterparts - according to a landmark study released this week by the Commonwealth Fund, a private national philanthropy based here. Unfortunately, age discrimination in the United States is preventing many older Americans from proving their skills in the labor force, says Thomas Moloney, senior vice president of the Commonwealth Fund. Mr. Moloney says age discrimination is pervasive in the US, and will be a significant civil rights issue during this decade, as the US population ages.
The Commonwealth Fund study is believed to be one of the most comprehensive studies of the work habits of ``older employees'' - workers aged 50 or over. The Fund's conclusion, based on a review of the work habits of older employees at two US and one British corporation, is that older workers have very flexible work habits, are easy to train, and have lower turnover and absenteeism rates than their younger counterparts.
The three case studies were undertaken by ICF Inc., a Washington D.C. consulting firm. During the fall of 1990 and the spring of 1991, ICF monitored older workers at Days Inn of America Inc., a large US hotel chain, the Travelers Corporation, a financial services company, and B&Q PLC, the largest hardware/housewares chain in Britain.
According to John Snodgrass, president and chief operating officer of Days Inn, using older reservation agents has been very ``positive.'' Mr. Snodgrass calls his older employees dedicated and productive.
Days Inn began hiring older workers in 1986 because it was having difficulty attracting younger workers. Turnover was high at two main reservation centers, in Atlanta and Knoxville, Tenn.
Days Inn found that its older employees could be trained to operate sophisticated computer equipment in about the same time as younger workers - roughly two weeks, and that older workers stay on the job longer - thus slashing training and recruiting costs. Such costs average slightly over $600 for older workers, compared to more than $1,700 for younger workers. Finally, while older workers tend to take somewhat longer to handle reservation duties, according to the findings, they are also more successful in attracting business.
Similar results were found at Travelers. In 1981, Travelers set up a job bank for its retirees at its headquarters at Hartford, Conn. The job bank, used to fill temporary positions, now includes more than 700 retirees and a number of nonretirees from Travelers. The company has saved substantially on agency fees and sales taxes by using retirees instead of having to hire temporary employees though outside agencies; for 1989 the savings to Travelers are estimated at $871,000.
The performance results for older workers at B&Q are considered particularly impressive, according to the Commonwealth Fund. To show how well older workers could perform, in 1989 a new store was set up and staffed entirely with workers over 50. The store, at Macclesfield, south of Manchester, England, turned out to be 18 percent more profitable than the average of five other stores from areas of somewhat similar economic circumstances. Macclesfield employees were also less likely to be absent or quit. L eakage - that is, damage to or loss of stock in their store - was less than half the average of the five comparison stores.
Currently, says Moloney, there are 13.5 million Americans aged 50 or over in the labor force. But another 6 million Americans over 50 are either not working, or working only part time. Those 6 million workers, says Moloney, are ready and able to work.
In addition, Moloney says, there are another 5 million Americans aged 55 to 65 who are pegged for retirement at some point in the next few years who say they would continue working much longer if they were allowed to do so. Many companies have mandatory retirement policies.
Growth rates for the labor force have been slowing in recent years, experts note. In the 1970s, the growth rate was running around 2.6 percent a year. That fell to around 1.6 percent a year in the 1980s, and is projected to be around 1.2 percent a year during the 1990s. Moloney says the contribution of older workers will be more important than ever.