Exploring the economic benefits of a workforce whose diversity exists across experiences, age, gender, race, ability and socioeconomic background.
The best business leaders know that a diverse workforce makes for a strong, sustainable company. If you’re an executive, you probably strive to make sure your workforce covers a broad range of experiences, across gender, race, ability and socioeconomic background. But is your company missing out on the benefits of an age-diverse workforce?
Age is an overlooked diversity category, but it’s a vital one, according to recent AARP research. Because people in the US are living and staying active longer, it means they’re part of the purchasing public for longer and that companies could be leaving millions on the table by not taking advantage of these workers’ experience.
AARP’s findings show that the US missed out on a potential $850 billion in GDP in 2018 because people over 50 who wanted to return to work — or who were working and wanted to change jobs or be promoted — were overlooked. Most of that impact fell on “large, higher-productivity sectors, including finance, trade, and professional services, which rely on the contributions of a highly-engaged labor force.”
Though the study was completed before the current coronavirus crisis, Dr. Joo Yeoun Suh, Director of Longevity Economy at AARP, projected that even without the economic hardships caused by the pandemic, age discrimination alone was on track to lose the US economy $3.9 trillion by 2050, when Gen X and Millennials join the ranks of the 50+.
As Lori A. Trawinski, a director in the AARP Public Policy Institute, put it: “By removing the lens of age as a way to view existing or potential employees, you can shift the focus to their abilities, skills, experience and knowledge, where it belongs. You will also expand the talent recruitment pool, which ultimately benefits the organization.”
But not every business is set to miss out on the benefits of age diversity. In the UK, many companies have embraced the idea of an age-diverse workforce. More than 20 years ago, home supply company B&Q — the UK analog of Home Depot — “blazed a trail with its active over-50s recruitment policy,” according to the Guardian.
As B&Q people director Fraser Longden told the Guardian in 2013, the initiative immediately proved a wise one. “We trialed a store staffed entirely by [more experienced] colleagues in 1989,” Longden said. “This produced 18% higher profits with six times less staff turnover. “
“One of the benefits of age diversity is that policies and practices that resonate with [experienced] workers are also appreciated by new entries and workers of any age or life-stage — meaningful work, purpose, impact, flexibility, and lifelong learning,” says Ramsey Alwin, Director of Thought Leadership around financial resilience at AARP.
B&Q saw this in action: Experienced workers often desire more flexible schedules and benefits that reflect experience and tenure, but B&Q found that applying these benefits across its entire workforce, for employees of all ages, helped them retain talent. Along with lower turnover, the company experienced 39% less absenteeism and 58% less shrinkage.
When the company was shortlisted for a Personnel Today age diversity award, B&Q was touted as able to “[establish] the kind of success achieved in age diversity in other areas; specifically disability and race” and “[develop] a work/life balance strategy.”
Similarly, in a 2018 survey of 1000 employee respondents, AARP found that when companies diversified the age of their employees, all employees benefitted: “Seven in 10 workers say they like working with generations other than their own, and the majority agree that both younger and [experienced] workers bring a set of positive benefits that enhance the workplace environment,” AARP reported.
Seventy-nine percent of the respondents said they appreciated being able to pass on their experience and skills to workers younger than them; 77% of respondents said they valued their more experienced coworkers for the guidance they could give, while 69% said age diversity made the workplace more productive. The survey also found that “mentorship can enhance recipients’ “soft skills” and career-related knowledge in addition to the actual skills that get a job done.”
But there’s also a bottom line imperative: AARP’s recent research discovered that “the [experienced] cohort contributed 40% of U.S. GDP in 2018 — an outsized impact for a group that comprises just 35% of the population.”
Fifty-plus Americans contribute billions of dollars in spending to the economy. There’s an economic incentive for business leaders to consider them closely in the development of products, programs, and marketing plans.
Anyone who has been in a brainstorm can tell you: The needs of the specific people in the room are naturally reflected in the development of the product or program. By that logic, if you exclude the 50+ from your staff, you run an increased risk of excluding them from your business considerations, and then from your buying market – because you haven’t created something that’s relevant to their needs. It presents a blind spot the size of $850 billion in GDP.
How can business leaders maximize age diversity in the workplace — and unlock their potential contributions of the 50-plus? As with all workplace diversity efforts, the first step is changing attitudes. AARP concluded that it will require “tackling workplace practices that push [experienced] workers out the door before they are ready to retire, shifting perceptions that prevent [those] workers from changing jobs or that pass them over for promotions, and overcoming biases in the hiring process that keep [experienced] workers from re-entering the workplace.”
It’s also important for companies to institute the kind of across-the-board culture that will help them retain more experienced workers. Providing flexible work options helps young parents, but it also makes work more accessible to 50+ employees. Offering on-the-job training to seasoned as well as newer employees will also help create an age diverse workplace. Actively recruiting for the 50+ for roles that align with their expertise in a way that recognizes the value of age within diversity initiatives.
It’s clear that a diverse workforce – scaling generations, genders, races, and backgrounds, will be essential to your company remaining competitive and innovative in the global economy.