By 2028, one-quarter of the U.S. workforce will be age 55 or older, according to a report by the U.S. Senate Special Committee on Aging. While discriminating against older workers is both illegal and unethical, it still happens. Many companies remain dead-set against hiring someone in their 50s or 60s despite equal opportunity and DEI policies, and potential talent shortages are projected to lead to more than 85 million unfilled jobs by 2030.
And yet, 87% of employers consider their companies to be “age-friendly” by offering opportunities, work arrangements, training and tools needed for employees of all ages to succeed in their current roles. In sharp contrast, only 69% of workers consider their employers to be age-friendly. This disconnect is consistent across companies of all sizes, per a recent report from the Transamerica Institute, "Workplace Transformations: Employer Business Practices and Benefit Offerings." The Transamerica Institute is a non-profit foundation that provides research and education on issues relating to retirement and aging.
Historically, recruiters have overlooked older workers. But there now are some positive signs of change. According to the study, among those with job openings (in 2023), more than half of employers (55%) gave “a great deal” (26%) or “quite a bit” (29%) of consideration to age 50+ job applicants, while 20% gave “some” consideration and 10% gave “none.”
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For the most part, large and medium companies were more likely to have given “a great deal” or “quite a bit” of consideration to age 50+ applicants than small companies (66%, 61%, 53%, respectively), yet 11% of employers did not have any age 50+ job applicants in 2023, the study shows.
What does it mean for a company to be age-friendly?
Generally, age-friendly employers understand the importance of age diversity in the workplace and that people of different ages bring different experiences, talents and perspectives to the table. They don’t discriminate based on age and are likely to hire and promote employees of all ages.
Age-friendly companies also accept that a multigenerational workforce can significantly boost productivity, enhance a company’s overall performance and improve decision-making processes. Most companies offer a flexible work schedule and a better work-life balance. They offer career development and training and have policies in place that promote exclusivity and prevent age discrimination.
Reasons for age discrimination in the workplace
Although 2.1 billion people will be 60 by 2050, according to the World Economic Forum, recent research has shown that older workers are often overlooked in the workplace, with an estimated 76% of employees saying they have suffered age discrimination at work. Older workers aged 50 and over are hired at less than half the rate of those aged 25-49, according to the Journal for Labour Market Research.
The reasons why vary from one company to the next, but may include:
- Many employers feel younger employees will stay on the job longer, an assumption that isn’t always accurate. In fact, the median number of years that wage and salary workers had been with their current employer was just 3.9 years in January 2024, down from 4.1 years in January 2022, according to the Bureau of Labor Statistics (BLS).
- Hiring new employees can be expensive, and many employers feel it’s a waste of money to train older workers out of fear they will retire soon.
- A company may feel that older workers dislike change and are set in their ways, and worry they will resist learning new skills.
- Companies feel older, more experienced and knowledgeable workers may intimidate their younger colleagues or overshadow their abilities.
- Health issues and the possibility of numerous sick days during the year might also keep companies from hiring older workers.
- Another barrier to hiring older workers is the perceived belief that older workers struggle with technology, and the lack of tech-savviness, valid or not, becomes a sticking point.
Why the need for age-friendly employment
Spanning more than seven decades of experience, today’s multigenerational workforce, including Generation Z, Millennials, Generation X, and Baby Boomers, brings an unprecedented diversity of perspectives, skills, and expertise to the workplace.
People live longer, and some work beyond the traditional retirement age, with many more planning to do so in semi-retirement. Some forward-thinking employers are beginning to recognize these needs among workers. Still, the Transamerica Institute survey finds a lack of follow-through by companies on implementing age-friendly business practices, which if implemented could be a win-win for the companies and their employees in the long run.
Research from the Organisation for Economic Cooperation and Development (OECD), shows that age-friendly companies have lower turnover and higher productivity rates than companies who resist hiring older workers. Age-friendly companies generally agree that older workers tend to have superior interpersonal communication and problem-solving skills. They possess a strong work ethic and bring a unique perspective to their work. The skillsets of older workers also tend to be ones that AI technologies can’t replace or replicate, arguably making them even more valuable.
How ageism manifests at work
New data from Resume Now’s 2024 State of Ageism in the Workplace report shows that ageism remains one of the most widespread and damaging forms of discrimination in today’s workplace. According to the survey, 90% of workers aged 40 and older report experiencing age-related discrimination at work — from pay disparities to missed opportunities. Biases such as these can have real consequences, not only for employees but also for the companies they work at.
Other key insights from the survey include:
- 52% of respondents reported that their employers predominantly hired younger employees.
- 49% said they earn less than younger colleagues for the same work.
- 22% of older workers felt excluded from challenging assignments.
- 16% felt passed over for promotions in favor of less qualified younger coworkers.
Building a multigenerational workforce
All too often, employers refer to the hiring, pay and promotional opportunities they provide to their workers across genders, races and ethnicities. However, a piece of the puzzle often missing is a focus on including age-related opportunities.
As the Transamerica Institute® report states, several strategies employers can use to foster multigenerational workforces may include promoting lifelong learning, including mentorships and reverse mentorships (younger workers sharing their expertise with older workers), offering internships for people reentering the workforce, specific job training and professional development programs. Unfortunately, Transamerica found that only 28% of the nearly 1,900 employers surveyed offer specific training to help prevent age discrimination and address generational differences.
One organization that is making inroads by addressing age discrimination in the workplace is the AgeFriendly Institute. Their Certified Age Friendly Employer (CAFE) program is a leading certification program that identifies organizations committed to being the best places to work for employees aged 50+.
Bottom line
Whether intentional or not, overt age discrimination can affect hiring practices and often manifests in subtle ways during recruitment, like during the interview process or in the phrasing of job descriptions. These biases can lead to older candidates being overlooked without impartial consideration.
By investing in an age-inclusive workforce, employers can satisfy their businesses’ future demands and position themselves for long-term success. Bain & Company estimates that approximately 150 million jobs globally will need to shift to workers 55 and older by the end of the decade because companies simply cannot recruit enough younger workers to meet their talent needs.
Related Content
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market TodayTech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
The Shutdown Standoff Is Heading for Its Next Big TestA key mid-October deadline could intensify the shutdown fight in Washington, and the fallout could soon hit workers and your wallet.
-
The 'Permission to Spend' Rules of Retirement SpendingHere’s how to spend guilt-free when you are in retirement.
-
Major Insurers Scale Back Medicare Advantage and Part D Plans for 2026Beneficiaries enrolled in Medicare Advantage and Part D prescription drug plans might be losing their plan as UnitedHealthcare, Humana, and Aetna (CVS Health) scale back offerings for 2026.
-
I Want to Retire, but I Have to Keep Working so My Adult Kids Have InsuranceIt's a tricky period when your adult child is under 26 but needs health insurance. We ask financial experts for advice.
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out OnMost large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
6 Steps to Protect Your Retirement SavingsDon't let a shaky economy and volatile market derail your retirement. These moves will help ensure your money lasts as long as you do.
-
You're High-Net-Worth: Should Your Retirement Savings Be in a Swiss Bank?Swiss banks have long been a haven for the wealthy. Here's how to safeguard your retirement account in a Swiss bank — and whether you should.
-
Should You Replace Your Financial Adviser with AI?Financial Help Many people already ask AI for financial advice. But is it good enough to replace a human financial adviser?
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible HeirA spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
