Employers Need to Train Their Older Workers, Too
A few big businesses see the usefulness, but they're in the minority
It’s nuts, but employee training programs tend to ignore older workers. This is bad for business, bad for workers in their 50s and 60s and bad for the U.S. economy. Fortunately, though, a few progressive employers are embracing training for experienced workers.
But they’re in the distinct minority. A few years back, the U.S. Department of Labor Taskforce on the Aging of the American Workforce issued a report saying that workers between ages 25 and 34 received an average of 37 training hours per year compared with nine hours for employees over 55. Little has changed since then.
Why Few Older Workers Get Job Training
The employer’s perspective is fairly straightforward, says Lee Branstetter, director of the Center for the Future of Work at Carnegie Mellon University. Corporate executives tend to assume that “older workers won’t work as long as younger workers.”
Put another way, the thinking goes: Why bother training older workers? They’ll retire soon.
Older Workers Want to Keep Their Skills Sharp
Yet experienced workers are eager to get additional training so they can keep their skills sharp and make themselves more employable.
More than 8 in 10 workers age 45 to 64 say the opportunity to learn something new is critical to their view of an ideal job, according to an AARP Work and Career Study survey. And over 7 in 10 say that job training is an essential element of that ideal employment.
The evidence is compelling that training targeted at experienced workers pay offs for the worker, the employer and the wider society.
Steep Price Ahead for Employers
Although the approach of restricting job training to young workers is antiquated, employers who continue doing so will pay a steep price in coming years.
The U.S. Bureau of Labor Statistics projects the labor force growth rate of 65- to 74- year-olds will be about 55 percent over the decade ending in 2024. By contrast, the total labor force is expected to expand by just 5 percent.
And here’s another government stat employers might want to know: Workers who are 65 have about the same risk of mortality or serious illness as those in their mid-50s a generation ago.
“These changing demographics will transform the U.S. labor market and society as a whole,” Peter Cappelli, director of the University of Pennsylvania’s Wharton School Center for Human Resource, wrote in the Harvard Business Review. “Any employer who wants to engage a skilled, motivated, and disciplined workforce cannot afford to ignore them.”
Big Employers Who Do Train Older Workers
A number of large employers get it.
Take AT&T’s massive retraining effort. The high-tech behemoth is investing enormous sums upgrading its infrastructure for the digital age. The scale of the effort is so large, management realized it couldn’t rely on hiring new people to work with the new technologies. Instead, it needed to offer retraining to many of its 280,000 employees, who have an average tenure of 12 years. As Fortune noted in this article about it, the early returns are positive.
Scripps Health (No. 45 on Fortune’s 100 Best Companies to Work For) offers learning and development programs to all its full- and part-time employees. This includes in-house classroom training, online training and certification classes. And the health care behemoth UnitedHealth Group specifically seeks out prospective employees who are 50 and older and follows up with policies and programs to retain its experienced workers.
Although apprenticeships are typically targeted at young workers, Centrica — a British multinational utility company and a recipient of the 2011 AARP Best Employers for Workers Over 50 Award — has removed age limits from its apprenticeship program for years.
Training Leads Older Employees to Keep Working
Some other countries get it, too.
Twenty five years ago, the Dutch had one of the lowest employment rates of experienced workers among European countries. In 1992, its employment rate of people 55 to 64 was roughly 29 percent. But following a series of policy reforms designed to encourage later retirement, partly through job training, the employment rate of experienced workers rose to about 53 percent by 2009.
Economist Matteo Picchio at Tilberg University in the Netherlands recently studied whether it pays to invest in experienced workers. His answer, in the report called Retaining though Training: Even for Older Workers, is an emphatic Yes. “We find that older workers who receive training are more likely to remain employed,” he wrote.
He calls for government policies to encourage employers to invest in offering older workers training.
A number of countries have initiated training programs targeted at improving the job skills of older workers, according to a just-released report by the Organization for Economic Co-operation and Development (OECD), Preventing Ageing Unequally.
For example, New Zealand heeded research suggesting training programs that emulate apprenticeships work well with older workers. Its New Apprenticeships program was limited to 16-to-21-year-olds, typical for most countries, but in 2014 the New Zealand government opened its apprenticeship system to all ages and older participants now receive the same level of government support as younger trainees.
Another intriguing example is Germany's WeGabAU program, started in 2006 and financed by the Ministry of Labor. The initiative promotes upgrading the skills of workers 45 and older. Wages or training costs can be subsidized under the program and, according to the OECD, the numbers choosing the training option are on the rise.
Byzantine Approach to Job Training
Unfortunately, the U.S. government isn’t heeding the training message. The federal government’s current approach to training is byzantine — a web of inadequately funded programs, many of which ignore the needs of older workers.
“Over the past 20 years, older workers have become a significantly larger percentage of total job seekers. Nonetheless, this group continues to constitute only a small percentage of workers receiving reemployment services from the public workforce development system,” said the W.E. UpJohn Institute for Employment Research report, Selected Public Workforce Development Programs: Lessons Learned for Older Workers.
This situation looks to get worse.
The Trump administration wants to eliminate the $400 million Senior Community Service Employment Program, which offers work experience and training to low-income, unemployed people over 55.
Learning Isn't Over at 22
At a Milken Institute Global Conference panel in early May, “Unbound: Retraining the American Workforce,” former U.S. Commerce Department Chief Economist Ellen Hughes-Cromwick made a passionate call for an “all hands-on deck” mindset when it comes to training initiatives. Echoing her was Shernaz Daver, chief marketing officer at Udacity, the online learning company. “We have an archaic belief that learning is over at age 22,” observed Daver. “The process of learning is lifelong. We’re living longer. We need to work longer.”
Those panelists were spot on. Sad to say, their view isn’t widely shared among employers.
Yes, the tight labor market (4.2 percent unemployment) is encouraging some employers to look at older workers with greater appreciation. But the pendulum will undoubtedly swing to a time when the economy sours. Then, employers will likely be less friendly to people in their 50s and 60s who have jobs or want them — unless businesses train themselves to think differently about job training.