8 Ways Ageism in the Workplace Impacts Your Business

November 13, 2018

8 Ways Ageism in the Workplace Impacts Your Business

This is Part 1 of a two-part blog series on ageism. Read Part 2 on ways to eliminate ageism and be a more inclusive workplace. 

Ageism in the workplace, otherwise known as age bias or age discrimination, is becoming increasingly more prevalent in today’s business world. While many employers would like to think that their companies don’t engage in this type of discrimination, statistical data and the growing number of age-related discrimination claims prove otherwise. The resulting consequences to employers, workers, and job seekers are damaging and far reaching. It is therefore imperative that a change in mindset and a proactive, targeted approach is utilized when it comes to effectively addressing and tackling the current issues surrounding ageism in the workplace.

Is the Problem Real or Is Ageism Just Another Trendy Buzzword?
We’ve all likely encountered stories from within our business networks, when scanning the professional social media websites, or while talking to family members and friends that speak to the topic of age discrimination in the workplace. All too common examples include job seekers age 40 and over being told that they are overqualified, will cost too much to employ, that they are a mismatch culturally for the organization, or worse yet, finding themselves being blatantly ignored when applying for jobs for which they are fully qualified. When it comes to employed older workers, examples include being passed over for promotions in favor of younger and less-experienced workers, being replaced by less costly millennials, finding their jobs suddenly eliminated, or being unceremoniously forced into early retirement. Unfortunately, the ugly issue of ageism is occurring more frequently than employers would like to admit. The reality of ageism and its consequences make this problem far more significant than just another trendy buzzword.

Supporting Data by the Age Discrimination Experts
In June 2018, the Equal Employment Opportunity Commission (EEOC) issued a comprehensive report detailing their latest research on age discrimination in the workplace. The report, The State of Age Discrimination and Older Workers in the U.S. 50 Years After the Age Discrimination in Employment Act (ADEA), shows that age-related discrimination claims have been on the rise, with 55 percent of claims in 2017 being those alleging discriminatory discharge, otherwise known as getting fired for being old. It is worthwhile noting that the amount of recorded age discrimination claims are said to represent only a fraction of the actual number of workers who experienced being pushed out of job on the basis of being older. To drive the point home further, 6 out of 10 older workers have witnessed or personally experienced age discrimination in the workplace, and 90 percent of those say that this type of discrimination is common.

Today’s Multigenerational Workforce and Factors for Consideration
In today’s unique time in history, we have a workforce demographic that is comprised of Baby Boomer, Gen X, Millennial, and Gen Z workers. Employers can easily find themselves faced with the interesting challenge of having to effectively manage not only their workforce but also job seekers that span across four different generations. The days of workers routinely retiring at 55 years of age seem to be long gone, with the current age for full retirement being approximately 66 to 67 years of age and climbing. For varying financial reasons, including caring for elderly parents or rebuilding retirement accounts that took a hit during the recession, some individuals expect to work beyond their late 60s. This means that employers will need to plan for how they can best accommodate a workforce with employees in their 20s, 30s, 40s, 50s, 60s and possibly beyond. Employers will also want to consider that 23 percent of the workforce is comprised of those 55 years of age and older. This is far too large of a demographic to dismiss as no longer relevant in the workplace, particularly as this group is healthier, living longer, and more educated than previous generations.

8 Ways that Ageism in the Workplace Adversely Impacts Your Business
Without realizing it, some well-meaning employers may be unintentionally contributing to the problem of workplace ageism. The issue is problematic in that ageism in the workplace serves as a catalyst for a variety of significant impacts to employers. Such consequences include:

  1. Employment law violations and fines. The longstanding Age Discrimination in Employment Act of 1967 (ADEA) is a federal law that protects individuals who are 40 years and older from age-based employment discrimination. This law specifically prohibits discrimination against an individual because of their age with respect to hiring or any term or condition of employment including promotions, training, compensation, benefits, work assignments, demotions, or termination of employment. Noncompliance in this area is risky so employers should beware.
  2. Being on the wrong end of a lawsuit or EEOC claim. Employers engaging in age discrimination face the risk of time consuming legal woes, potentially hefty costs to defend allegations, and negative publicity for the business. The risk is never worth it as lawsuits can result in large attorney fees plus damages awarded, along with mandatory changes to employment practices and monitoring by the EEOC.
  3. Negative impact to employer branding. When job applicants or employees experience or witness age discrimination, employer branding can take a direct hit. Whether feedback is by word of mouth, on social media, or career sites like Glassdoor, negative commentary can result in attraction and retention issues and poorly perceived employer branding. 
  4. Costly mistakes due to inexperienced workers. Operating with a workforce skewed heavily toward younger workers may result in a higher percentage of employees who are lacking in practical experience. Inexperience often equates to not only a longer time to learn one’s job but also lower quality decision-making and potentially costly mistakes that negatively impact the bottom line.
  5. Fewer subject matter experts to bolster team bench strength. Nothing can replace long-cultivated, in-the-trenches expertise honed throughout one’s career. True subject matter experts are worth investing in and retaining. While their corresponding salaries may potentially be higher, they will save the business money through the breadth and depth of specialist knowledge they bring to the table, their ability to get up to speed more quickly, and through better decision-making.
  6. Lack of middle-aged intellectual resources. It pays to cultivate an age-diverse workforce. Many older workers outperform or perform equally as well as their younger counterparts. Middle-aged brains shine when it comes to reaching solutions faster, making sounder judgments, and better navigating the complex world we live in today. As for creativity and innovation, these abilities span the spectrum of age. By not tapping into these key skillsets that older workers can provide, organizations risk missing out.
  7. Diminished pool of mentors to develop future leaders. Effective succession planning initiatives start well in advance. It is important to ensure that leadership teams include those who have the necessary skills and experience to develop viable future leaders for the business. Younger workers are far more likely to succeed in becoming suitable future leaders under the guidance and wisdom of knowledgeable, highly experienced mentors.
  8. Loss of historical knowledge and key business relationships. Older workers with tenure often take priceless historical knowledge with them when they are sent packing. This type of information can be invaluable to business strategies as well as day-to-day operations. The same goes for those beneficial business relationships older workers have nurtured with clients, service providers, and others within their network. The loss of these assets can prove to be costly to the business.

Bringing It All Together
Ageism in the workplace continues to persist despite federal regulations specifically protecting against this form of illegal discrimination. We now live in a world where the workforce is comprised of workers from multiple generations and one where, often out of necessity, workers won’t be retiring until their late 60s or possibly early 70s. Ageist assumptions continue to perpetuate even though research has proven time and again that age does not predict ability or performance and that older workers are healthier, living longer, and more educated than previous generations. Ageism in the workplace is detrimental to not only older workers and job seekers but ageist employers and the workforce as a whole. Employers will benefit from taking an honest assessment of both their workplace culture and employment practices then strategically implementing any necessary changes. Doing so will help to curb the adverse impact to organizational effectiveness, employer branding, and the overall business which includes your bottom line. 

The Authors: 

Andrea Choate is a Chief People Officer and published author.