By Pamela Williams and Felix Digilov, Fisher Phillips
As the United States grows increasingly diverse, so does the American workforce. This diversity is encapsulated not only in race and gender but also in the age of workers. About 27% of 65- to 74-year-olds were employed either full- or part-time in 2016. That number is expected to reach 30% by 2026, according to the Bureau of Labor Statistics.
The U.S. Census Bureau predicts that, by 2050, 19.6 million American workers will be 65 or older, comprising about 20% of the total U.S. workforce. On the other end of the curve, more than 76 million millennials make up 35 percent of the workforce – the largest share. Millennials have represented the majority of the workforce since 2016.
With even younger graduates entering the workforce every day, health care companies are facing a new set of challenges managing this diverse workforce.
For the first time, five generations of workers, each with unique characteristics, values, worldviews, and career goals, are now part of the same workforce. Health care employers need to not only understand how to properly manage and motivate this 50-year generation gap but also how to leverage this diverse talent pool to their organizations’ benefit. Coupled with a historically tight labor market, this challenge has the potential to place even greater strain on health care employers that may already be struggling to attract and retain new talent for their companies.
Understanding Your Workforce
The workforce comprises five generations of workers: the Silent Generation (born before 1946), baby boomers (born between 1946-1964), Generation X (born between 1965-1980), Millennials (born between 1981-1996) and Generation Z (born after 1996).
To complicate matters further, the population of the U.S. is aging: by 2030, Americans who are 65 and older will outnumber those 18 and younger. This trend presents an even greater challenge for health care employers as the health care workforce tends to trend older than other employment sectors. More than 25% of all U.S. physicians are at least 60 years of age, and the average age of a registered nurse is 50. By 2020, nearly half of all nurses will reach the traditional retirement age. In fact, it is estimated that a nursing shortage of up to one million may develop in the U.S. by 2025, a deficit not seen in many decades.
Further, a new report from the Paraprofessional Healthcare Institute estimates that, as a result of the aging population, there will be 7.8 million direct care openings from 2016 to 2026. This means that growth within the direct care workforce will outpace every other occupation in the country. Texas alone will account for 126,140 new direct care openings during that timeframe. Combining the 7.8 million future direct care openings with the 7.5 million unfilled American jobs in 2019 means that health care employers face a particularly competitive environment in attracting and retaining quality employees of all ages in this labor market.
With the health care sector being especially vulnerable to the effects of an aging workforce, health care employers looking to reduce unnecessary workforce turnover and attract the best employees should strongly consider taking the generational makeup of their employees into account.
The Age Discrimination in Employment Act
The Age Discrimination in Employment Act of 1967 (ADEA) is a federal law prohibiting age discrimination in employment. The ADEA applies to employers with 20 or more employees and protects employees and applicants who are 40 or older.
Approximately 56% of U.S. workers who are 50 or older lose their jobs before they plan to retire, according to a recent study by Urban Institute economist Richard Johnson. Although the ADEA makes it illegal for employers to discriminate against workers, age-related claims have not slowed down. In 2018, age discrimination claims totaled more than 22 percent of all charges of discrimination filed with the EEOC, a number that has remained consistent for the past 10 years. Alleged discriminatory firings were the most common age discrimination charges.
Age claims tend to surface when there are layoffs or a reduction in force, or when the company has a policy affecting older workers, such as a mandatory retirement policy.
To avoid the unnecessary expense – both tangible and intangible – of defending an age discrimination claim, the most important and obvious rule for employers to live by is to treat all employees the same, regardless of age. This means that performance goals and standards, discipline, and compensation must be applied equally and based upon legitimate, measurable factors such as productivity.
Similarly, employers must be mindful to make hiring decisions irrespective of age. Hiring decisions must be made on the applicant’s qualifications, skills, experience and merit, and not age (or any other protected class). Moreover, decisions concerning employee separation must be based on, and should be supported by, legitimate reasons such as poor performance.
Common Challenges and Tips on Managing a Multigenerational Workforce
A multigenerational workforce is an overall positive cultural investment, but it carries unique challenges. Twenty-somethings new to the workforce have different goals than those who are in their 70s and nearing retirement. People of diverse ages who are in various stages of their career are motivated in different ways. To reach the entire workforce, managers should consider how best to communicate to the workforce.
Mixed-age teams can bring a wealth of collective knowledge and insight into any business. Older workers can offer deep experience, and younger workers may have fresh ideas and perspectives because they do not live by the code of “we’ve always done it this way.” An organization’s culture, mission, vision and values can serve as a powerful unifying force to bring these groups together.
Studies have found that the most common challenge in managing older and younger workers is communication or, specifically, communication styles. It is only logical that various generations have different styles of communication. Millennials and Generation Z members prefer to communicate via electronic media and tend to be less formal with their communications than older generations, who value written communication and in-person meetings in the workplace. Naturally, older workers may find certain types of communication to be too informal and inappropriate. Employers should set parameters regarding the form and style of communication acceptable in the workplace. Such policies may decrease the chances of misunderstandings between workers of various generations. Similarly, employers should communicate with employees in a way that is suited to all generations.
As with any diversity initiative, many employers feel that employees of different ages may bring different attributes to the workplace, allowing everyone to benefit from new ideas and different perspectives. For example, employers in a recent poll reported that, while older employees/late career employees had high skill levels, they also were more reluctant to try new technologies than their younger counterparts were. Therefore, to ensure success of all employees in a multigenerational workforce, employers should tailor their training on software and technology systems in ways that are beneficial to all workers. In doing so, employers must be mindful of all employees’ different experience levels to ensure proper communication and comprehension of training materials. This may include considerations regarding live versus online training, handouts, and written materials, etc.
The importance of work flexibility also may vary among generations. Younger workers may have an expectation of schedule flexibility, whereas baby boomers are frequently more accustomed to working a 9-5 job. Similarly, younger workers may be accustomed to communicating 24/7, while older employees could bristle at being contacted outside of their scheduled work hours. Employers need to be mindful of these generational differences and clarify policies and expectations at the time of hire to guard against unforeseen frustrations that could negatively impact the employment relationship.
Making the Most of a Multigenerational Workforce
Given the factors outlined above — an aging general population, the dire need for more health care employees, the already-high average age among health care workers and the many advantages that a multi-generational workforce offers employers — it becomes essential that health care employers maximize contributions from various generations.
A supportive and positive corporate culture is vital to ensuring the success of a multigenerational workforce. Employers should strive to create a culture that is inclusive and respectful of all workers. This effort may include after-work activities that are enjoyable for all generations, as well as the day-to-day culture the company projects.
Negative stereotyping from younger and older generations can lead to internal organizational discord. Employers should combat this issue head-on and encourage workers to refrain from making distinctions between themselves, while simultaneously understanding and respecting the value of each individual worker. Communication is the key to managing a multigenerational workforce, as it can help identify issues and concerns that might otherwise fester into legal claims.