Age and Experience

At a time of discussions — and, in Europe, street demonstrations — about the fate of older workers, evidence is piling up that people in their 50s and beyond develop new abilities that make them uniquely qualified as entrepreneurs, CEOs and other top-level professionals.

The revelations come as societies worldwide debate how long people should work if benefit systems for the aging are to remain solvent and how to prepare for growing talent shortages.

Until recently, conventional wisdom has held that once people reach 50 or so, they are on a downhill slide. And their abilities to contribute to the economy are careering downhill with them.

Despite antidiscrimination laws, stereotypes about the inadequacies of older members of the work force — that they are slow, forgetful, obtuse in learning new skills, closed to innovation, uncreative, inflexible and costly — have been persistent. And many of these stereotypes have been supported by empirical research. As a result, older people at all skill levels find it much more difficult to find new jobs, and those with jobs find themselves being eased out or laid off.

With notable exceptions, even CEOs and other top executives are not immune to the phenomenon. Top executives in the largest companies were in their 60s in the post-World War ll years; in the 1980s, top executives were likely to be in their 50s; now top executives are more likely to be in their 40s, according to Peter Cappelli, a professor at the Wharton School of the University of Pennsylvania, and Bill Novelli, a professor at the McDonough School of Business at Georgetown University, in their book “Managing the Older Worker” (Harvard Business Review Press, 2010). (See accompanying article.) Many corporations, of course, have a mandatory CEO retirement age of 65. (Those that do not are overwhelmingly run by founders.) This trend toward younger CEOs arises from other factors besides bias, but the preference is clear.

Now, however, research that has ac-cumulated over several decades is increasingly being interpreted to demonstrate that older people develop attributes that make them invaluable contributors to the productive economy.

It is crucially important for those in corporate management to address the question of whether older workers — generally defined as those over 50 — can continue to make valuable contributions in the workplace. The answer has far-reaching implications because current demographic trends indicate that the work force will continue to age indefinitely, well beyond the passing of the baby boomer bulge. This is because people are living longer and are much healthier well into what used to be considered old age.

In “Managing the Older Worker,” the authors draw on research about people at all echelons of the work force — from department store workers to airline pilots to surgeons to artists — to refute stereotypes about older workers. Other investigators, meanwhile, are homing in on the upper ranks of the work force and enlisting recent research on the unique capabilities of the aging brain to argue that these capabilities are precisely those needed by top executives and others at the apex of their professions.

In a paper to be presented early in 2011, Judah Ronch, dean of the Erickson School at the University of Maryland, Baltimore County, and Robert Singh, an associate professor at the Earl G. Graves School of Business and Management at Morgan State University, write that the mature mind has abilities that are critical for successful entrepreneurs. And they say that their research on entrepreneurs applies equally to CEOs and others in high-level positions.

Their argument relies on successive revisions of the understanding of the brain over the last 50 years. The longstanding notion that all cognitive abilities were developed by early adulthood and that thereafter the brain went into a natural, inevitable decline began to change with the finding in the 1960s that compromised memory in older people was a result of disease, not age. After that realization, experts looked at the cognitive functioning of the aging brain in an entirely new light. In recent years, researchers have found that beyond middle age the brain can change, adapt and develop new abilities to meet new challenges.

In addition, researchers have found that the coordination between the two sides of the brain — the left, where sequential, literal, functional, textual and analytic thinking reside, and right, the locale of metaphorical, aesthetic, contextual, synthetic and simultaneous thinking — improves with age. Research further suggests that with age the brain regulates emotional states better so that people become less impulsive and less driven by emotion.

Because of a better balance between right and left brain, older entrepreneurs are less apt to get bogged down in details and may be better able to come up with holistic, creative solutions to problems, Ronch and Singh believe.

“They are more apt to be visionaries, to think in metaphors, and to look at ‘what ifs,’” Ronch said. “And, with better emotional control, they are better able to stay focused.”

These attributes would also be highly advantageous for a CEO, Ronch said. The modulation of emotional states observed in the mature brain would be particularly valuable for CEOs, making them less emotional and impulsive and better equipped for making reasoned decisions in high-pressure situations.

Using technologies that pinpoint activity centers in the brain, Ronch and Singh hope soon to embark on research to determine whether older minds indeed have a greater capacity for entrepreneurial endeavors.

Chances are, though, that before such research begins to make significant inroads on long-held stereotypes about the capabilities of people over 50, this growing demographic will be re-enlisted at all levels of the work force, not only for their contributions to retirement funds, but for their critically needed skills.

Companies may be marginalizing mature workers at everyone's peril

Thanks to the Great Recession, a lot of companies have slashed their work forces over the past two years, pushing productivity and profits to record highs. Many economists and corporate executives would call this “creative destruction,” an unpleasant but periodically necessary pruning of outmoded roles and systemic inefficiencies that gives way to the flowering of innovation and growth. That is what recessions do, we are told. But this recession may leave a longer-lasting and much darker legacy.

This time the ranks of the long-term unemployed are greater than in past recessions, and they are growing more ossified. They are filled disproportionately with workers over the age of 50 who may never find their way back into the work force. Ironically, many who had been planning to work past the conventional retirement age in order to underwrite longer life expectancies, higher health care costs and lost savings now find themselves involuntarily retired well before their time.

Why is this happening? Conventional wisdom says the occupations and skills of many over-50 workers are defunct, and there will not be enough time for them to retrain and regain their footing before they simply age out of the work force. What is more, companies are shunning older workers, seeing them as poorer performers than younger ones, too expensive, both in terms of salary and health care, too slow and inflexible to learn new methods and technologies, and too difficult to manage.

These perceptions, however, are largely inaccurate and “such generalizations certainly do not represent good talent management practice,” said Kenneth P. De Meuse, associate vice president of research at Lominger International, a subsidiary of Korn/Ferry International. In a 2009 paper, “A Scholarly Investigation of Generational Workforce Differences: Debunking the Myths,” De Meuse and co-author Kevin J. Mlodzik, an intellectual property research assistant with Korn/Ferry Leadership and Talent Consulting, analyzed a wide range of peer-reviewed research and found very few consistent differences among generations in the workplace in terms of employee motivation, values, attitudes and loyalty.

In “Managing the Older Worker” (Harvard Business School Publishing, 2010), authors Peter Cappelli and Bill Novelli concluded, based on cognitive and behavioral research, that for all practical purposes “workers with more experience are almost always better performers on virtually every relevant measure.” When it comes to cost, they said, “The differences are, at best, trivial” and arguably more than offset by the better performance. They point out that the market sets wages based on performance and experience, not age. They also note that although the cost of medical claims for individuals over 50 is about twice that for those in their 30s and 40s, older workers have fewer dependents, so their overall impact on employer health plans is often less than that of their younger colleagues.

“Companies are not being intelligent about this,” said Lotte Bailyn, professor emerita at the MIT Sloan School of Management. “If they provided good, part-time options including hourly pay and benefits, they could then get the wisdom and experience of older workers without high salaries.” That would also provide something many companies profess to need: a just-in-time solution to meet peak demands and staff special projects without incurring significant onboarding costs.

Nevertheless, despite the compelling business case that can be made for retaining and hiring older workers, hiring managers and supervisors continue to view them negatively. “The explanation is less about rational calculations of costs and benefits and more about psychological factors — including discrimination,” Cappelli and Novelli wrote.

Although there are clear laws against it, age discrimination in the workplace is common. According to a RoperASW survey, two-thirds of people over age 45 say they have experienced or witnessed it in the form of layoffs or denied promotions. One former Fortune 500 executive said, “The trick to getting around the discrimination issue is to call layoffs a ‘reorganization.’ A department is simply done away with, and each employee is then given the opportunity to compete for jobs in the ‘new organization.’ Well, guess what, the 50-and-over crowd doesn’t fare too well. This type of discrimination is hard to prove, but it happens every day.”

“It is a big and growing problem,” said Thomas A. Kochan, a professor at the MIT Sloan School of Management. “Clearly, the stigma against laying off older workers has been significantly diminished if not eliminated. I see this largely as a breakdown in the social contract at work. I hold employers accountable [as well as] the larger society for not protesting it with sufficient vigor and voice.”

Older workers are also subject to discrimination in the job market. Cappelli and Novelli cite studies in which résumés reflecting identical skills are submitted by applicants of different ages, and the younger candidate is interviewed or hired 40 percent more often. What is more, many current recruiting tactics specifically weed out older workers. For example, it is common, though potentially illegal, for job postings to include experience limits requiring, say, five to 10 years of experience, but no more. Older applicants, if they receive any response at all, are often told they are “overqualified” for the position.

One executive recruiter said that age discrimination is “even worse than you know. I am over 50 myself, and it is very painful to do this work when so many talented and experienced people are basically shunned by those doing the hiring. The law is completely ignored in most cases.”

Clearly, the government must do a better job of enforcing the law while providing incentives for companies to hire and retain older workers, but it is even more crucial that employers reject the psychology of willfully and systematically writing off older workers. Mlodzik, of Korn/Ferry, believes that will begin to happen when there is greater understanding in boardrooms and executive suites of the evolving science of talent management. Then, “Business decision makers, charged with ensuring shareholder returns at all costs, will be enabled to choose other avenues for cost reduction and restructuring,” Mlodzik said.

Without such a change in thinking, things are likely to get grim. If an entire cohort of still-productive workers is allowed to simply fade away before its time, needlessly sacrificed to scorched-earth cost cutting and unjustifiable prejudices, there will be unsustainable stress on public resources, especially if the pattern is repeated with future generations. Better to solve the problem now and in the private sector. “Efforts to make better use of older individuals in the workplace represent one of the greatest opportunities available for improving society,” said Cappelli and Novelli. “It is about the only way to provide the resources necessary to pay for longer lives."