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¹ We discuss the effects of COVID-19 in the workplace in a box at the end of this chapter.

context that we write about the workplace and job-related factors that influence the employment decisions of older workers.

We begin with a discussion of various theoretical approaches that provide insight into the purpose and effects of workplace practices on working conditions and workers. These theoretical approaches include a job-quality perspective, a total-worker-health approach, and an interest-based perspective. Based on the literature, we then classify age-related workplace practices into various categories and discuss their implications for older workers. Next, we focus on a set of key workplace practices and factors that influence the employment of older workers. We conclude by identifying areas for future research, highlighting the need for a national longitudinal organization-level survey to provide the necessary data to address key research questions about workplace practices.

THEORETICAL APPROACHES

Some theoretical approaches emphasize universal working conditions, focusing on the conditions that characterize good workplaces for employees. The job quality and total-worker-health approaches have implications for older workers, but they typically emphasize practices that affect all workers regardless of age. In contrast, the interest-based perspective can be used to show how employer and employee interests shape workplace practices for older workers; whose interests are being met depends in large part on the types and structure of practices implemented. Table 5-1 summarizes the key insights from these various approaches.

Job Quality

Kalleberg and colleagues have written extensively about the changing composition of jobs and job quality over the last 40 years, which has given rise to more “bad jobs” than “good jobs” (Appelbaum et al., 2019; Kalleberg and Dunn, 2016; Kalleberg, 2011). Although all jobs can have both good and bad features, classifying them as “good jobs” or “bad jobs” is a dichotomous way to discuss the overall characteristics of job quality, and is a useful heuristic for contrasting a set of dimensions in the labor market. Bad jobs are those with low wages,

TABLE 5-1 Theoretical Approaches

few (if any) benefits, little opportunity for advancement, and little autonomy or control; importantly, these jobs are highly precarious, providing no job security. Good jobs are, of course, the opposite: they offer good wages, benefits, development and growth opportunities, schedule control, and greater job security.

Similarly, Clark (2015), among many others, points to the multiple-dimensionality of job quality. That is, job quality includes not only pay and compensation but satisfaction with the number of hours, the promise of promotion opportunities and job security, satisfaction with the type of work (whether hard physical labor and whether exhausting or dangerous), the content of the work (whether it is interesting, involves contributing to society, is meaningful), and satisfaction with interpersonal relationships (with both peers and managers).

The Sloan Center on Aging & Work at Boston College has tested a model of eight elements of job quality that employers can strengthen in ways that improve the fit between employee needs and preferences and those of the organization, all of which have been shown to be very important to older workers (McNamara and Pitt-Catsouphes, 2020; Pitt-Catsouphes et al., 2015). Following is a list of these elements of job quality with examples of research on the relevance each one has for older workers:

1. Constructive relationships: A supportive supervisor, for example, and good friends at work are associated with job satisfaction for workers over the age of 50 (Maestas et al., 2017; see Eppler-Hattab et al., 2020; and James et al., 2010).
2. Fair compensation and benefits: Workers over the age of 50 are more likely than younger workers to say that pension and retirement benefits are important to them (Maestas et al., 2017). This factor has become more important to older workers who have been caught in the transition from defined-benefit (DB) to defined-contribution (DC) retirement policies (Quin, 2010; Munnell and Sass, 2008).
3. Culture of respect, inclusion, and empathy: While this element is related to job satisfaction for workers of all ages (Pitts, 2009), more women over the age of 50 cite this element as “moderately” or “very important” to them (Pitt-Catsouphes et al., 2015; see also Mor Barak, 2015).
4. Opportunities for training, learning, development, and advancement: While findings on this element are mixed, the 2015 American Working Conditions Survey (Maestas et al., 2017) shows that among workers over the age of 50, the ability to acquire skills was related to job satisfaction, even though these older workers were less likely than younger workers to report that they had jobs that allowed them to learn “new things” (McNamara and Pitt-Catsouphes, 2020, p. 381). Similarly, opportunities for training and development are a significant factor in levels of employee engagement for workers up to the age of 65 (James et al., 2010).
5. Workplace flexibility, autonomy, and control: Older workers’ reports of work engagement are related to their satisfaction with these elements of job quality (James et al., 2010; Swanberg et al., 2011; Pitt-Catsouphes et al., 2015). The importance of workplace flexibility (when, where, and how much to work) is probably one of the most robust areas of research, as workplace flexibility has been shown to be important to workers of all ages, including older workers.
6. Provisions for employment security and predictability: These provisions are linked to psychological and economic concerns related to job insecurity and unemployment (Punnett et al., 2020) and precarious employment conditions., e.g., contingent work or underemployment (Benach et al., 2014). For older workers, these provisions are related to decisions about working longer and to work engagement (Pitt-Catsouphes et al., 2015; see also Taylor et al., 2010.)
7. Opportunities for meaningful work: Although approximately one-fourth of all workers felt that it was “very important” that their work be “morally, socially, personally, or spiritually significant” (Maestas et al., 2017; p. 50), workers over the age of 50 report the importance of these qualities of the job in greater numbers than younger workers. This element of job quality has also been found to be related to work engagement (Pitt-Catsouphes et al., 2015).
8. Wellness, health, and safety at the workplace: More workers over the age of 50 than younger workers say that it is important that their jobs be less physically demanding (Maestas et al., 2017). In a study at the Center on Aging & Work, more women than men said that wellness and health and safety protections were important to them (Pitt-Catsouphes et al., 2015).

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² The Time and Place Management Study is a large-scale random assignment study of more than 9,000 employees in more than 600 units of a regional healthcare provider in the United States. Workplace policy changes were assigned at the unit level and employees were surveyed longitudinally.

theory, which states that conflict is an inherent aspect of the employment relationship because the interests of employers and employees differ (Kochan, 1980). These differing interests can create tension at the workplace that can result in various practices that satisfy the interests of one party over the other, but this tension is not insurmountable because interests can also align around particular issues.

One can understand employer interests through different theoretical lenses. Moen and colleagues (2017) use institutional logic to show the disconnect between age-related work practices offered by firms and the preferences of older workers. Institutional logics are socially constructed, historical patterns of practice by which individuals and organizations provide meaning (Thornton and Ocasio, 2008, p. 2). Institutional logics emphasize that organizations are embedded in an institutional structure that makes organizations resistant to changing existing practices. Moen and colleagues (2017) argue that organizations have established retirement practices based on a one-way, full-time work model that culminates in a one-time exit to retirement. Although—as demonstrated in Chapter 3—this model no longer fits the preferences and experiences of older workers, practices that do fit these preferences, such as phased retirement or continuous training for older workers, are rarely implemented because they do not fit the prevailing logic.

In addition, the flow of human capital in organizations is another lens through which to view the implementation of age-related work practices from the interest of employers (Berg and Piszczek, 2021; Nyberg and Ployhart, 2013; Becker, 1964). Organizations will institute age-related work practices either to retain human capital in their organizations or to facilitate the exit of human capital based on the needs of their business. This theoretical framework emphasizes that organizations view older workers as bundles of human capital and that work practices will reflect the value the organizations put on particular skills and abilities workers possess. Thus, organizations may in fact pursue work practices that encourage the exit of older workers as much as they may put in place practices to encourage working longer.

Considering employer and employee interests draws attention to how age-related workplace practices are the result of tensions between employers and employees. In some cases, interests align. For example, practices attentive to safety and ergonomics generally meet the interests of both employers and employees regardless of age. Moreover, alignment of employer and employee interests may vary by the skills of older workers. High-skilled workers typically have more power to obtain practices from employers that match their preferences than do lower-skilled workers because they face a more favorable labor market that offers them wider employment opportunities (see Chapter 7 for more discussion of the role of labor markets). This power difference can lead to disparities in workplace practices across skilled work groups. In other cases, interests will differ. For example, older workers’ interests in more flexible retirement pathways or flexible work arrangements may conflict with employers’ interests in facilitating the exit of older workers.

Categorization of Practices

Much of the literature classifies age-related work practices primarily from the perspective of individual interests, but employer interests can also shape these practices. We discuss four bundles of practices classified in the literature, demonstrating where employer and employee interests align and differ: accommodation practices, developmental practices, retention and exit practices, age-inclusive practices.

Accommodation Practices

Age-related accommodation practices refers to workplace practices that recognize the possible declines in older workers’ physical and cognitive capacities due to aging and are designed to compensate for such declines (van Dalen et al., 2015; Kooij et al., 2014). Accommodation practices can affect older workers directly by improving or sustaining their physical and cognitive health, as well as indirectly by facilitating an organizational climate that cares for older workers (Froidevaux et al., 2020; Wang and Fang, 2020; Kooij et al., 2014).

For example, making ergonomic changes in the workplace can accommodate physical decline for those working in physically demanding jobs. Some of these changes may include adopting better equipment (e.g., larger

computer screens) or altering the job design to minimize physical strain (e.g., rearranging the physical space to reduce repetitive movements; Froidevaux et al., 2020; Wang and Fang, 2020). Another accommodation practice for older workers is telecommuting, that is, allowing individuals to work from home with the help of information and communication technologies. Allowing older workers to work where and when it is most convenient for them provides them with flexibility and autonomy and signals that the organization values and supports them (Cleveland and Maneotis, 2013). However, sometimes “allowing” flexibility is an option available not to all workers but limited to favored workers (Kelly and Moen, 2020).

Employers can also accommodate older workers’ needs by reassigning older workers to less-demanding jobs if these reassignments are preferred or needed (Armstrong-Stassen and Schlosser, 2011). One example of job reassignment is to switch older workers from night shifts to day shifts. Similarly, another form of accommodation is job crafting, that is, allowing workers to modify their tasks at work in order to improve their person-job fit (Kooij et al., 2020).

From their multinational investigation of the predictors of accommodation practices, van Dalen and colleagues (2015) conclude that organizational characteristics (e.g., proportion of older workers, seniority-based compensation), characteristics of the economy (e.g., recruitment problems), and labor unions’ involvement predicted whether employers used accommodation practices for their older workers. Of the four accommodation practices examined in 3,780 European organizations, ergonomic practices were the most widely implemented by organizations (34%), followed by the reduction of working time before retirement (24%), decreasing the workload of older workers (24%), and setting age limits for irregular work/shift work (11%). However, few empirical studies have directly examined the expected beneficial effects of accommodation practices for older workers.

Developmental Practices

Age-related development practices refers to workplace practices that help older workers acquire new knowledge, skills, and abilities (van Dalen et al., 2015; Kooij et al., 2014). Given the continuously increased use of technology in most workplaces and the shift from production work to information and service work, employees need to constantly learn new skills. This is particularly important for older workers who typically have not had recent training (Beier and Ackerman, 2005). Engaging in development and training at work provides general benefits, such as ensuring that employees have basic skills to work and helping them understand how to work effectively in teams. In addition to those benefits, older workers’ participation in skill development may help combat age-related declines in cognitive and physical abilities, providing not only a private benefit but a social one as well (Kooij et al., 2014; Oude Mulders and Henkens, 2019). Moreover, development practices are important because skill obsolescence and lack of updated training are prevalent threats to older workers’ careers (Charness and Czaja, 2006).

The aim of development practices can vary, as they can focus on maintenance or job mobility or, in differing degrees, on both (Oude Mulders and Henkens, 2019). Development practices that are maintenance-focused can help older workers perform their current jobs better. In this case, the goal of development is to improve older workers’ ability and skills to better fit the demands and responsibilities entailed in their jobs. Development opportunities may also be focused on job mobility, offered to older workers as part of an organization’s workforce planning. In the latter case, development is focused on updating older workers’ skills, replacing those that are no longer pertinent to their jobs with new skills to ensure they have the appropriate resources to continue working. When organizations offer such developmental initiatives to promote internal job mobility, they can better utilize older workers’ human capital resources by transferring them to positions that will maximize the combination of their individual capabilities.

Of the three development practices studied by van Dalen and colleagues (2015), European organizations provided continuous career development the most (32%), followed by promoting internal job mobility (28%) and offering training programs for older workers (20%). The predictors of development practices are comparable to those of accommodation practices. These included the proportion of older workers in the organization, the recruitment problems, the training requirements, and knowledge intensity of the work. Despite evidence showing that organizations are beginning to implement development practices, their impact on older workers remains unclear.

(Dwertmann et al., 2016). Thus, they generate a welcoming and accepting environment whereby employees of all ages are valued by and integrated into the organization. For example, a study of 93 German small and medium-sized companies with 14,260 employees (Boehm et al., 2014) found that age-inclusive practices facilitated strong and mutually caring, supportive, and loyal relationships between workers of all ages and their employers, which subsequently led to higher company performance and lower employee turnover intention. Further, a large-scale study of U.S. companies (Li et al., 2021) used data from 3,888 organizations based on the Annual Workplace Survey implemented by the Society for Human Resource Management and showed that when age-inclusive practices were implemented, age diversity at workplaces had stronger positive effects on human capital and social capital, which eventually facilitated organizational performance.

KEY PRACTICES

In this section, we focus on particular practices associated with job quality: flexible work arrangements, training practices, a supportive climate for age diversity and inclusion, and compensation and benefits. We examine how these practices are shaped by employer and employee interests and where research gaps exist.

Flexible Work Arrangements

Flexible work arrangements are important practices that can meet the interests of employees, employers, or both. These practices are important components of job quality for workers of all ages. Work arrangements can affect employee retention, conflict between work and care obligations, and psychological well-being both positively and negatively; inflexible ways of working can have deleterious effects on retention (Moen et al., 2017) and on health (Berkman et al., 2010). Studying the impacts of flexible ways of working for the older workforce is increasingly salient in the wake of the COVID-19-driven push of office workers into working remotely, which may well drive greater flexibility in the future of work.

Simply contrasting flexible from inflexible practices is not ideal for capturing the costs and benefits of each, because workers may be in different occupations, have different supervisors, and engage in different types of work. The best way to capture the effects of flexible work arrangements is to introduce them into an organization and then compare current to previous outcomes for the same employees. Where possible, the gold standard is a randomized trial, contrasting changes in the “flexibility innovation” group with a control group of workers who did not gain access to flexibility.

Two studies have examined the effects of this innovation. One was a natural experiment in the headquarters of a Fortune 500 firm, which observed an employer-generated change that would have happened whether or not it was studied. The other was a five-year randomized field trial of 1,000 professionals, technicians, and managers undertaken by the Work, Family, and Health Network (Kossek et al., 2014) in another Fortune 500 firm that introduced greater employee control over the time and place of work (flexibility) to workers across the age spectrum. Results from the latter study showed this innovation in job quality reduced expectations of exiting, lowered employees’ actual turnover rates, and produced later ages of anticipated retirement (Moen et al, 2017, 2016a, b; Moen, Kelly et al., 2011). These changes in job quality reduced work-family conflict (Kelly et al, 2014; Kelly et al., 2011) and time strain (Moen et al., 2013), enhancing psychological well-being (Fan et al., 2019; Moen et al., 2016b). Moreover, there were no differences in the beneficial effects of the flexibility innovation based on the ages of workers. However, except for the analysis of retirement ages, there was little specific focus on older workers.

This set of studies describes outcomes for professionals, not the larger workforce, and yet there are real distinctions in policies and practices for health, retail, and service workers compared to professionals (Henly and Lambert, 2014; Lambert et al., 2012). A study of healthcare workers in extended care settings finds that those whose managers are supportive of employees’ work–family needs, including offering flexibility regarding work schedules, report lower cardiovascular disease risk and longer sleep than those with less supportive supervisors (Berkman et al., 2010). This was not the case for those working with less supportive, less flexible supervisors. Another study, this time of European older workers ages 50 and above, found real inequalities regarding which

workers had flexible work arrangements (Andersen et al., 2019). Older women and those with less education as well as other subgroups were particularly disadvantaged.

This is a fertile area for future research in the United States. Additional investigations of possible distinctions and disparities by workers’ ages and life course stages, as well as by their social class, race, and ethnicity, could identify specific flexibility preferences and experiences of older workers in different types of occupational and life circumstances.

The randomized field trial study described above (Kossek et al., 2014) finds that the effectiveness of flexible work arrangements, such as remote work or alternative schedules, is essentially determined by whether they are voluntary, chosen and desired by workers, or involuntary, implemented by managers or employers for business reasons. For example, it demonstrates that working remotely involuntarily has negative impacts on worker health and well-being (Kaduk et al., 2019). However, additional studies are needed to examine whether involuntary remote work and other mandated flexibilities for business needs (such as expectations of instant responsiveness or being forced to work at the office or remotely) tend to push older workers out of the workforce. As precarity increases in the U.S. economy, heightened instability is evident in work schedules that are more often designed to benefit employers than employees (Schneider and Harknett, 2019; Kalleberg, 2018). And flexibility policies can be “on the books”—stated in organizational handbooks—but rarely granted, typically granted only as a special accommodation to highly valued employees (Kelly and Moen, 2020).

Studies chronicling the availability and use of various flexibility arrangements among older workers would be especially valuable in light of the increase in remote work concomitant with the COVID-19 dislocation. Having large numbers of employees working from home during the pandemic may jumpstart a nationwide trend toward partial (hybrid) or full remote work practices for jobs that make it practical to do so. We need to know more about the conditions under which older workers appreciate remote ways of working, even as others may see it as fostering longer hours and expectations of instant accessibility.

Another form of flexibility involves work and retirement pathways. As discussed in Chapters 3 and 4, older workers often have a preference for options to scale back on job obligations, including reducing their work hours, whether as part-time work, through phased retirement paths, or by being rehired for contract work (Timmons et al., 2011; Moen, 2007). But there is insufficient evidence on the retirement timing effects of the ability to customize exit pathways in the United States. One study using European data³ finds that older workers who decrease their hours actually exit the workforce earlier than those continuing in full-time schedules (Hess et al., 2018), but it is not clear whether decreased hours were voluntary. A 10-year follow-up study of older English workers showed that high job demands predicted preferences for early exits, even as some control (decision latitude) predicted both preferences for and actual later exits (Carr et al., 2016). A large survey of older workers in Europe found that older workers in non-physically-demanding jobs would consider working longer if they had greater flexibility (Andersen et al., 2020). In addition, the impact on workers of changing work hours or a work schedule depends on whether this is done voluntarily or involuntarily. Older workers who are involuntarily “demoted” are more likely to reduce their organizational commitment and leave their jobs (Hennekam and Ananthram, 2020).

There is a clear need in the United States for scholarship on whether and what kinds of flexible arrangements affect the timing of retirement exits. Studies on specific types of voluntary alternative work-hour arrangements and late career pathways, as well as how they meet the interests of older employees in different occupations and industries, would be especially valuable for promoting understanding of working longer.

Another key area for future research is the role of intersecting social locations (overlapping positions related to gender, class, race/ethnicity, nativity, age—see Collins and Bilge, 2020; Romero, 2018) in shaping who has access to flexible work arrangements, alternative work paths, and other aspects of the opportunity structure. Corporate as well as public labor market and retirement policies and practices were developed in the middle of the last century

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³ Data are from The Survey of Health, Ageing, and Retirement in Europe (SHARE) and the English Longitudinal Study of Ageing (ELSA). The SHARE study is a pan-European social science panel study providing internationally comparable longitudinal data on adults ages 50 and older from 28 European countries and Israel. ELSA is a nationally representative panel study of adults ages 50 and older living in households in England.

with a mindset characterizing workers as White men following standardized paths, namely, continuous, full-time work until continuous, full-time retirement (Moen and Roehling, 2005).

But today’s—and tomorrow’s—older workforce increasingly consists of women as well as men, and is increasingly diverse in age, race, and ethnicity as well as preferences for and options regarding how and how long they work. Research shows that social class, gender, and race (as well as country) affect retirement pathways and possibilities (Moen, 2016a, b; Radl, 2013; Blossfeld et al., 2011; Raymo et al., 2011). For example, it is important to consider alternative pathways from work to retirement experienced by older adults with few job options, by people who are disproportionately Black and Hispanic, by women, and by men without a college degree (Moen et al., 2020).

Existing organizational arrangements and expectations of standardized full-time employment and standardized one-way, one-time retirement typically constrain older workers’ employment and retirement options, impeding flexible pathways and flexible ways of working (Kojola and Moen, 2016; Johnson, 2011; Johnson, Butrica, and Mommaerts, 2010; Peterson and Murphy, 2010; Armstrong-Stassen, 2008; Pitt-Catsouphes and Matz-Costa, 2008; Hedge et al., 2006b; Siegenthaler and Brenner, 2001). This constraint can be demonstrated in how public polices influence organizational practices. For example, federal retirement policies intent on clarifying the distinction between “worker” and “retiree” impede some organizations from hiring their own recent retirees for a year after their retirement. Disability policies that classify workers as “disabled” (and unable to work) or “not disabled” often prevent the option of possible part-time work. In addition, the Fair Labor Standards Act regulations constrain possible flexibility policies around the time and timing of work. A fruitful area for future research is to assess the unintended as well as intended consequences of both existing and changing labor market and retirement policies in the ways they affect organizational practices and constrain or open up options for continued participation in paid work by older workers.

Despite possible limiting factors, organizational changes in how, when, and where work is accomplished can and do happen (Kelly and Moen, 2020; Cahill et al., 2015; Oude Mulders, Henkens, and Schippers, 2015; Conen et al., 2014; Kossek et al., 2014). Indeed, the COVID-19 pandemic demonstrates how quickly working conditions can change. Even prior to the pandemic, some organizations were proactively addressing the needs and desires of their aging workforces by offering schedule flexibility, late career development, and ways to scale back (Dychtwald et al., 2013), as well as rehiring their retirees (Oude Mulders, Henkens, and Schippers, 2015). Most tend to adopt age-neutral policies, rather than focus specifically on older workers, which can be a limitation to options like phased retirement. The evidence suggests that many workers of all ages and life stages need or want to scale back on work or to have greater flexibility in terms of where, when, and how they do so (Moen et al., 2016a; Johnson, 2011; Timmons et al., 2011; Moen, 2007). Table 5-2 summarizes differences in flexible work arrangements that are structured to meet employee interests (voluntary) and those structured to meet employer interests (involuntary).

In summary, work arrangements with flexible work times and places are increasingly common. Moreover, it appears that some forms of remote or hybrid work are likely here to stay. These could be a boon to older workers who want greater flexibility, but research evidence points to the importance of employee control over where and when they work, not whether their organizations have flexibility policies and practices, underscoring the costs of inflexible arrangements to workers of all ages. Additionally, some flexibility polices are voluntary, designed to benefit employees, even as others are involuntary, designed to meet business needs. There is insufficient knowledge about whether and under what conditions older workers find working from home, hybrid work, and other flexibility practices or, conversely, stringent inflexibilities, to be salutary or stressful, much less the degree to which these arrangements promote working longer. This constitutes an important agenda for future scholarship.

Training Practices

Employer-provided training programs are examples of other practices that can bring important benefits to older workers, increasing their engagement and job quality. Human capital theory predicts that firm-specific training increases productivity and wages relative to alternative employment opportunities, allowing the firm that offers training to pay higher wages and providing incentives for both employers and employees to maintain the employment relationship (Becker, 1962). Yet research on training and retaining older workers has yielded

TABLE 5-2 Age-Related Flexibility Practices Shaping Later Adult Work

conflicting results. One study using data from Europe finds that training led to greater worker retention in the Netherlands for workers ages 50–64 (Picchio and van Ours, 2013). Other studies also find a positive relationship between training and retention (Armstrong-Stassen and Ursel, 2009; Herrbach et al., 2009), whereas Boockmann and colleagues (2012) find no relationship between training and exit rates of employees ages 40–65. They speculate that this result may be due to the limited resources provided for training and the redesign of workplaces or other difficulties related to implementation.

The way training is conducted can influence the effectiveness of the training itself and its relationship with retention. Organizations can offer programs that include older workers in a standard training program designed for their entire workforce, offer targeted training programs, or use some combination of these two delivery methods. Older workers have different traits and skills and process information differently than younger workers, so they may benefit more from some training methodologies than from others (Callahan et al., 2003). Studies in the organizational psychology training literature suggest that training that is targeted toward older workers is more effective at providing extensive human capital development and a stronger positive relationship with wages (Hedge et al., 2006b; Charness et al., 2001; Sterns and Doverspike, 1988; Sterns, 1986). Based on this literature, we expect establishments that offer targeted training programs to have higher retention rates among older workers.

Employers often introduce training programs for workers when processes change or new technologies are introduced. Yet older workers may be less motivated to pursue training opportunities (Bertolini et al., 2011), and organizations may be less likely to offer training to them, given that older employees have fewer remaining years of work during which employers could reap the returns on their training investment (van Dalen et al., 2015). Thus, even if training increases productivity and wages, the effort required to participate in it may outweigh the benefits because the individual is close to retirement age. Whether older workers participate in training may depend on their income level as well.

Whereas training may seem like a straightforward practice to encourage older workers to remain in employment, more research is needed to determine specific factors, such as training methods and wage levels, that influence this relationship.

Supportive Climate for Age Diversity and Inclusion

The climate within organizations relating to perceptions of age, diversity, and generational differences impacts the employment decisions of older workers. In a recent Transamerica survey (Collinson, 2017), employers report increasing awareness that their older employees may plan to work past conventional retirement ages. Seventy-seven percent of employers agree with the statement, “Many employees at my company plan to continue working either full-time or part-time after they retire,” including 24 percent who “strongly agree” and 53 percent who “somewhat

agree.” Still greater numbers of employers (81%) agree that they are supportive of employees who plan to work longer. Yet fewer than half of employers surveyed offer the kinds of flexible work options and transition strategies that older workers indicate are needed to make working longer possible. Neither have employers included age in their diversity and inclusion strategies (only 8% according to the PricewaterhouseCoopers (2015) 18th annual CEO survey). Such oversights represent a disconnect between employers’ beliefs and workers’ perceptions.

When diversity efforts do exist, they are typically organized around overcoming stereotypes or bridging generational differences and tensions. The literature has largely rejected the idea that generations have distinct attitudes and values (Rudolph et al., 2020). Nevertheless, when employees identify with the idea that generations are associated with shared characteristics and values, this can add tension to workplace interactions and exchanges across age groups (North, 2019). North and Fiske (2015a) note that interventions to mitigate such tensions and conflicts across ages make use of either educational or contact approaches that are limited in scope and, as such, show mixed results. Educational approaches, for example, may affect knowledge about older adults, but seldom change attitudes toward them. Similarly, increasing contact between and among generations has shown mixed results. These authors recommend intervention strategies that (1) help employers recognize both the positives and the everyday realities of aging workers; (2) help older workers to resist “self-handicapping” with their own internalized ageist beliefs; and (3) decrease competition between and among the four generations currently in the workforce. More scholarship is needed for testing the effectiveness of any of these strategies.

Although chronological age continues to be a useful indicator of changes across the lifespan, it is an imprecise measure. Pitt-Catsouphes and colleagues (2012) note that certain thresholds and passages based on age have changed in ways that make chronological age less meaningful than it might have been in earlier times. Today, for example, a 40-something can be a first-time parent or a grandparent. A 50-year-old can be starting a new career or enjoying 30 years of tenure in an organization. A college student can be a retired veteran returning for an advanced degree. Thus, age might be better thought of as a prism with many different facets (Pitt-Catsouphes et al., 2012). According to North (2019) these other facets interact in ways that affect attitudes and capabilities having to do with later life work.

Much has been made in recent years about generational age or the extent to which individual employees are shaped during their coming of age during important social and political events, such as the Great Depression, the Vietnam War, Civil Rights activism, or today’s pandemic. But tenure with an organization, not to mention lifetime experience, for example, might be more relevant to assessments of performance than age per se; similarly, whether one is in early career or late career can vary by age. Indeed, as North (2019) points out, such intersections within age may explain many of the null findings and/or conflicting findings within the still small literature on aging and work. Trawinski (2016a) sums this up succinctly: “Age is a number, not a credential” (p. 3).

Ideally, supervisors would make a clear and evidence-based assessment of an individual’s ability, skills, experience, motivations, and knowledge and how that particular employee adds value to teams and the overall performance of the organization, rather than rely on generic assumptions based on age or other sociodemographic characteristics. A report by AARP on leveraging the value of an age-diverse workforce suggests diversity and inclusion efforts must be part of the organization’s overall strategy, holding managers accountable for implementing diversity and inclusion initiatives throughout all levels of the organization, and suggests that the workforce should mirror the diversity of the organization’s customer or client base (Trawinski, 2016a, b).

North advocates for more scholarly work to examine generation, age, tenure, and experience simultaneously, in order to deconstruct the prism of age and better understand the relationships between these facets and important organizational outcomes, especially productivity and performance. Rigor is lacking in many studies throughout the diversity and inclusion literature. Most of the research is based on cross-sectional quantitative data or else is qualitative but with small sample sizes. Additional research is needed to overcome these significant methodological limitations.

Compensation and Benefits

Compensation and benefits are key elements that define a job as “good” and are another set of practices that affect retirement decisions. It is well established that compensation (earnings as well as pension wealth) increases over much of the life course. The human capital model and the long-term incentive-contract model are the two main models that describe the relationship between productivity, compensation, and age.

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⁴ There is little dispute that labor market experience contributes to rising wages, but some dispute about how much tenure increases wages, because better worker-employer matches result in higher wages and also last longer (e.g., Topel, 1991).

⁵ Nevertheless, versions of models with specific human capital investment can be constructed in which wages rise faster than productivity (Carmichael, 1983).

⁶ The Lazear model pertains more to earnings growth with tenure than to growth with experience, because subsequent employers would have no reason to compensate a worker for the below-productivity wage earned on a previous job. However, most workers in the U.S. economy settle into long-term jobs (Hall, 1982), a finding that has changed little despite some changes in job attachment in U.S. labor markets (Neumark, 2000). Thus, the evolution of earnings during workers’ tenure with their employers plays an important role in the life-cycle pattern of earnings.

⁷ There are other theories about why employers provide pensions, including: tax incentives because earnings of pension assets are not taxed until benefits are paid; insurance against the risk of living a long time after retirement (for DB plans, a role also played by public pensions); and shifting the risk on retirement-related benefits to employers (in the case of DB plans). See Dorsey et al., (1998).

⁸ Employers’ ability to use changes in pension wealth to induce retirement is not unrestricted. The 1990 Older Workers Benefits Protection Act regulated financial inducements to retire.

create other inducements to retire. One inducement is the ability to begin making withdrawals from DC plans at age 59.5, which in the presence of liquidity constraints should result in increased acceptable wages to stay in the labor market.

There has been a sea change in pension provision since the early 1980s, with the shift from DB to DC retirement plans (including 401(k) plans). For example, Papke (1996) reports that for single-employer pension plans with 100 or more participants, the number of DB plans fell from over 22,000 in 1980 to 17,000 in 1992, and the number of active participants fell from 21.9 million to 19.8 million. During the same period, the number of DC plans rose from 13,000 to 38,000, and the number of participants from 15 million to 29 million, while the number of 401(k) plans and participants rose even more strongly. And Friedberg and Webb (2003) report that the percentage of pensioned full-time employees with a DC plan rose from 40 to 79 percent between 1983 and 1998, while the percentage covered by a DB plan fell from 87 to 44 percent over the same period.

The shift from DB to DC plans would appear to undermine what may be one of the principal roles of pensions in the interplay between productivity and compensation. In both the specific human capital model and the Lazear contract model, backloading of pensions plays an important role. DC plans, however, typically do not have backloading, but instead generally result in contributions of a given share of wages, and workers are fully vested relatively quickly (a maximum of six years under 401(k) plans). And in a world of Lazear contracts, DB plans, but not DC plans, can create strong incentives for workers to separate at the right retirement age, from the perspective of the implicit long-term incentive contract.⁹

Thus, the shift in pensions in the U.S. economy could possibly threaten or limit the ability of workers and employers to enter into long-term relationships whose productivity is enhanced by either greater specific human capital investment, or greater incentives to exert effort. If the underlying importance of long-term employment relationships—stemming from either specific human capital investment or Lazear-type contracts—has not changed, then the shift in pensions may be alarming. In this view, whatever has spurred the shift to DC plans and away from DB plans ultimately threatens the ability of employers and workers to form these productive long-term relationships. Moreover, with the aging of the Baby Boom generation, employers may be likely to be hit with rapidly aging, highly paid workforces, with little leverage with which to encourage retirement, especially given the threat of age discrimination claims. This “perfect storm” of an increasing burden of highly paid older workers and an inability to “lock in” younger workers may be viewed as presenting severe challenges to companies in the next couple of decades.

On the other hand, a concern that the shift from DB to DC plans makes it difficult to induce older workers to retire may be misplaced in some important respects, which instead point to the challenge of trying to keep older individuals employed. Moreover, with an aging workforce, employers may face some difficulties in meeting labor demand needs if they cannot induce enough older individuals to remain in the labor market. Thus, the reduced incentives to retire generated by the shift from DB to DC plans may, over the next few decades, offer some advantages because of the need to try to keep older individuals working, even if, in the steady state, the shift in pensions might otherwise pose challenges to employers.

KEY FACTORS OF INFLUENCE

Job Control

Employers are often locked into thinking that work can only be organized in a specific way, although research demonstrates that the organization of where and when work is done can vary. Moreover, who controls the timing of work can differ across industries, as well as across jobs and workers within organizations. However, these disparities within organizations and occupations are not inevitable. For example, teams of workers in hourly service jobs could self-organize to enhance the flexibility of all team members. Professional, administrative, and clerical jobs could be designed more flexibly, especially given rapidly evolving technologies (Kelly and Moen, 2020; Fan et al., 2019). Though shifts in organizational policies and practices often occur at a glacial pace, the COVID-19 pandemic has shown that many jobs can be quickly redesigned and reimagined so that people can work more flexibly and remotely.

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⁹ Friedberg and Webb (2003) present evidence that the shift to DC plans leads to later retirement ages.

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¹⁰ “Workability” refers to the competence, health, and other mental and physical characteristics that workers need to meet the demands of their jobs.

often a deciding factor for promotions if the qualifications of competing employees are otherwise equal. In addition, layoffs are typically determined in a way that protects employees with the highest seniority. These seniority provisions are most typical in manufacturing and emerged as a form of protection against arbitrary treatment by supervisors.

For older workers, labor unions provide a form of protection and voice at the workplace. They provide representation when older workers have grievances and advocate for them in discussions with management as they would advocate for any worker. In the United States, labor unions have typically not negotiated specific benefits for workers based on age; although seniority provisions are highly correlated with age, they are based on longevity. In contrast, labor unions in other countries have been more proactive in negotiating provisions that benefit older workers directly, such as partial retirement schemes or demography funds for older worker training (Flynn et al., 2013). Additional research on the role played by labor unions and other forms of employee voice at the workplace in affecting older worker retention or retirement would be helpful in better understanding the impact of older worker empowerment on employment outcomes.

The Impact of Technology

There is very limited research on how the implementation of technology in the workplace is impacting older workers in particular. By contrast, there is extensive research on the general effects of various forms of technology—including artificial intelligence, robotics, the internet, and data driven management—on jobs, job tasks, and the workplace (Neufeind et al., 2018; Brynjolfsson and McAfee, 2014). The effects of such technologies on jobs are mixed. Some argue that new technologies will have positive effects leading to improved productivity, upskilling of jobs, and growing employment in certain occupations (McGuinness et al., 2019; Autor, 2015; Mokyr et al., 2015). Others suggest new technology will have more negative effects by eliminating jobs with routine tasks or jobs that lack social intelligence, further exacerbating inequality (Fonseca et al., 2018; Adermon and Gustavsson, 2015; Goos et al., 2014).

It is unclear which perspective will best describe the future. When it comes to technology such as machine learning, the effects on the workforce can be varied and depend on many factors (Brynjolfsson and Mitchell, 2017). More than just replacing jobs with routinized tasks, machine learning is likely to affect particular tasks within jobs that have specific strategic goals and from which data can be generated to help automate decision-making. The extent to which machine learning impacts particular jobs and occupations will depend on the demand and supply of specific skills, the extent to which tasks act as substitutes or complements, and price, income, and supply elasticities.

Coughlin (2020) suggests four areas for which the technologies adopted by employers affect a multigenerational workforce: for safety and well-being, for onsite assistance, for workforce transitions, and for knowledge management. Safety and well-being involves using technology to design workplaces so they reflect the physical needs of older workers, such as ergonomic elements or using wearable technology (wrist bands) that monitor physical depletion or mental engagement. Onsite assistance is the use of technology to monitor repetitive tasks, such as lift and positioning technology on assembly lines, and through “cobots” to aid workers in expanding worker strength. These technologies are designed for all workers but would typically benefit older workers to a greater degree and help extend working life.

Workforce transitions involves the use of technology to expand online learning as a form of lifelong learning. Technology is also used to develop app-based work that can serve to keep people employed, despite the increased risks workers bear as independent contractors. Knowledge management refers to the use of technology to help older workers learn on the job, for example through virtual reality wearables or by using data-driven technology to conduct reverse mentoring.

The extent to which technology extends the employment of older workers depends on several factors, including organizational culture, employee skill level, and technology design. An inclusive organizational culture that welcomes age-diversity is more likely to implement technology in a way that increases the ability of older workers to be productive. Higher-skilled workers, regardless of age, are more likely to receive training in new technology and benefit from technological innovation. In contrast, lower skilled workers may find their jobs replaced by automation and

technology that can perform repetitive tasks (Mercer and Wyman, 2019). Technology design also plays a big role in the usability of technology by older workers and its effectiveness in raising older worker productivity (Thompson and Mayhorn, 2012). Yet we should be cautious about designing technology too specifically to meet older worker needs because of the risk of stigmatizing older workers and encouraging firms to replace them. More research is needed to sort out the differential effects of various forms of technology and technology design on older workers.

IMPLICATIONS FOR FUTURE RESEARCH

The literature regarding age-related organizational practices reveals areas in need of more research. First, most existing studies focus on age-specific practices, but not age-neutral practices. These two types of practices reflect two different approaches for managing workers and their aging processes (Yeatts et al., 1999). On the one hand, age-specific practices are developed to counter potential age-related declines among older workers. They may be well intended, but the specialized attention on age at work risks putting a “stamp” on older workers and highlighting their identity as “a devalued social group” (Froidevaux et al., 2020), contributing to stigmatization. In addition, age-specific practices can expand retirement pathways, address age stereotyping, more effectively develop human capital, and increase retirement security. But again, such targeted practices can draw organizational resources to a specific group and contribute to discord and resentment within the workforce. On the other hand, age-neutral practices consider all workers, regardless of age, as important human resources to their organization. Investment and development in human resources through age-neutral practices would conceivably reduce stigmatization and discord. There is currently a lack of research comparing the effectiveness of age-specific and age-neutral practices and the theoretical assumptions behind them.

Second, most existing studies focus on measuring the availability of age-related organizational practices, but not the actual utilization of these practices by workers. It is well known that merely offering organizational practices as policies does not necessarily lead to the policies’ utilization (e.g., Wright and Nishii, 2013; Nishii et al., 2008). The differences between access to practices and the use of practices have been well documented in the work-family literature (Berg et al., 2014; Kossek et al., 2006; Eaton, 2003). Many older workers have limited access to flexible work options, with college-educated white men the most apt to have choices as to when, where, how, and how long to work (Moen, 2016a, b; Moen, 2013). Yet, more research is needed to fully understand the barriers for older workers to actually take advantage of the beneficial practices offered by their organizations. For example, more comparative studies that consider the effects of the institutions within which organizations are embedded would be particularly helpful in determining what drives older workers to access and use specific age-related practices.

Third, the organizational context is often lacking in studies of aging and workplace practices (Lee et al., 2017). Suggestions of age-related practices are often made without regard to potential organizational factors that may drive the response. Studies that seek to determine why some firms implement age-related practices and others do not are difficult to conduct due to the lack of longitudinal data in the United States to deal with issues of endogeneity. Thus, the classification and analysis of practices is most often focused on how practices affect individual outcomes and well-being. We recommend that government agencies establish or expand an existing longitudinal, representative sample of organizations with questions focused on older workers and practices so more research could be conducted on the determinants of offering age-related practices within organizations.

Fourth, we would encourage more research using the interest-based perspective to determine what age-related and age-neutral practices are offered by organizations, what types of older workers have access to these practices, and who actually uses them. Such studies could examine the role of managerial strategy as a reflection of employer interests or the role of institutions in distributing power across employers and employees. For example, research has shown that employers who analyze business needs have positive attitudes toward their older workers, and those who have large numbers of older workers are more apt to have policies that better fit with the needs of older workers (van Dalen et al., 2015; Lee et al., 2012; Loretto and White, 2006).

We can see this tension between employer and employee interests play out in employee access to and use of flexibility work arrangements. Older workers express preferences for greater “flexibility,” but do not always have access to the flexible work arrangements that would keep them in their jobs. There are real equity concerns when flexibility is allocated in ways to meet the needs of some workers but not others. Better educated workers,

high-income workers, and those who could easily find another job tend to be able to have their needs “accommodated” (Glauber, 2011; Swanberg et al., 2005; Golden, 2001). Workers lower in the occupational hierarchy are more likely to be in place-bound jobs or have rigid shifts (such as jobs in retail, restaurants, or hospitality). More research would be welcome that examined the implications of these practices for those in later adulthood who wish to scale back or work more flexibly in terms of time and place.

CONCLUSION

This chapter examines a variety of theoretical approaches and work practices impacting older worker employment. We recognize that there is no universal set of workplace characteristics desired by all workers, especially older workers. Dimensions of job quality and the total worker health approach emphasize the importance of constructive relationships, a culture of respect, opportunities for training and meaningful work, good pay, flexibility and control, safety, and stability—all important features of workplaces valued by workers. Whether these practices are implemented at the workplace, however, depends very much on the interests of both employers and employees, which we emphasize throughout our discussion of workplace practices.

We highlight various practices, including flexible work arrangements, training practices, a supportive climate for age diversity and inclusion, and compensation and benefits. Our discussion of these practices shows how different interests of employers and employees can shape practices and their influence on older worker employment decisions. Throughout this chapter we call for more research in key areas that relate to whether and what kinds of flexible arrangements affect the timing of retirement exits, the effect of compensation systems on retirement decisions, and implications of the intersectionality of a variety of age-related practices that affect older workers.

We also discuss various factors that influence how older workers experience workplace practices. The extent of job control and schedule control is critical for helping older workers manage their work and nonwork commitments, though more research is needed to fully understand how control affects the path toward retirement. Employee voice and participation is another factor that can empower older workers to better shape work practices in their interest. Technology is also impacting job tasks and shaping how older workers experience work. Much more research is needed about how new forms of technology are either fostering older workers’ employment or leading to more early exits.