The Productivity Myth
A very popular myth about older workers is they are less productive than younger workers. To many business leaders, this manifests as an economic problem - leaders perceive a gap between what older workers are paid relative to what they deliver.
During Tim’s PhD interviews there was a perception that older workers lose stamina or don’t want to work the long hours necessary to achieve tight and challenging deadlines. The presence of older workers (either as an individual contributor or part of a work team) is positioned as a productivity impediment.
But what does the research evidence show about the impact of older workers on productivity and, more importantly, financial performance of firms?
Busting the Myth
Empirical research demonstrates two clear outcomes:
Productivity is not a function of age – older workers are just as productive as all other workers
Company’s financial performance is not impacted negatively by older workers - a more age-diverse workforce actually increases organisational performance
Let’s dig deeper:
Research Highlights on Personal Performance include:
Meta-analyses reveal there is no significant difference in job performance between older and younger workers or older and younger managers. Further, evidence against job performance declining with age is found in a number of studies.
A Monash University management study found that there was no statistical difference in intelligence, problem solving or leadership ability between age groups.
The Future of Retirement Study, a global survey of retirement and work, noted employers said that mature workers were just as productive and motivated as younger workers and were even more loyal and reliable.
The German research group Max Planck Society for the Advancement of Science observes that with knowledge-based work age seems to make no difference to performance.
Research Highlights on Company Productivity include:
The OECD (2020) reported a firm that has a 10% higher share of workers aged 50 and over than the average is 1.1% more productive.
A major quantitative study involving 18,000 German companies between 1993 and 2003 demonstrated that increasing age diversity had a positive effect on productivity when a company undertook creative rather than routine tasks. A 10% increase in age diversity led to an improvement in company productivity by approximately 3.5% per year.
Research Highlights on Business Performance include:
Quantitative studies have demonstrated increased workforce age diversity improves business performance. A more diverse workforce increases organisational performance as it is better able to serve numerous performance factors.
A quantitative study involving 350 British workplaces between 2004 and 2011 demonstrated when productivity is linked with producing quality goods and services and financial performance an older workforce does not negatively impact the bottom line.
Where does The Productivity Myth come from?
When trying to reduce bias, we often look to the attitudes of individuals and work at this individual level to effect change. In this case, the individual bias associates the ageing process with declines in older worker physical and cognitive capacity. But what if age-bias is embedded in our organisational systems and processes as well?
Research into the influence of the prevailing work environment can shed light on the more systemic, organisational levers contributing to the productivity myth:
When older workers perceive that the workplace is biased against their age, their engagement levels may decrease – and may indeed have lower levels of output.
Older worders who perceive age discrimination within their organisation share less knowledge with younger colleagues.
When older workers have access to learning and opportunities to acquire new knowledge or skills, their affective commitment to the role increases and their intention to stay with the organization increases.
Mercer has found older workers’ contribution is more likely to show up in group performance than in traditional individual performance metrics. The contribution of older workers materialises in the increased productivity of those around them.
Myth-Busting in Your Organisation
Try the following quick quiz: (answer yes or no)
1. Our company has asked older workers how they perceive age discrimination in our everyday work practices
2. Our senior leaders seek to develop all employees through on- and off-the-job experiences – which builds the commitment levels that all employees have to our company
3. Our company actively works to bring older and younger employees together – and encourages knowledge-sharing practices which drive innovation and growth
4. Our performance management system rewards collaborative work practices equally to individual contribution against performance metrics
If you answered “Yes” to each of the questions, then you are well on the way to busting The Productivity Myth.
If you answered “No” to any of the questions, then give us a call. We’re really keen to help bust The Productivity Myth so that organisations can access the tangible financial upsides of employing and retaining older workers.
A final word:
The evidence shows that idea that older workers are less productive contributors, is either greatly exaggerated or completely wrong.
References
Armstrong‐Stassen, M & Schlosser, F. (2008) Benefits of a supportive development climate for older workers. Journal of Managerial Psychology, 23(4), 419-437. https://doi.org/10.1108/02683940810869033
Backes-Gellner, U., Schneider, M. R., & Veen, S. (2011). Effect of workforce age on quantitative and qualitative organizational performance: Conceptual framework and case study evidence. Organization Studies (32), 1103- 1121.
Backes-Gellner, U., & Veen, S. (2013). Positive effects of ageing and age diversity in innovative companies - large scale empirical evidence on company productivity. Human Resources Management Journal, 23(3), 279 - 295.
Brough, P., Johnson, G., Pennisi, S., & Timm,C. (2011) Comparisons of cognitive ability and job attitudes of older and younger workers. Equality Diversity and Inclusion: An International Journal 30 (2), 105-126
Bryson, A., Forth, J., Gray, H. & Stokes, L. (2020) Does Employing Older Workers Affect Workplace Performance? Industrial Relations, 59(4) DOI: 10.1111/irel.12265. Vol. 59
D'Netto, B., Shen, J., Chelliah, J., & Monga, M. (2014). Human resource diversity management practices in the Australian manufacturing sector. The International Journal of Human Resource Management, 25(9), 1233-1266.
Dewhurst, E. (2015). Are older workers past their sell-by-date? A view from UK age discrimination law. The Modern Law Review, 78(2), 189-215.
Egdell, V., Maclean, G., Raeside, R., & Chen, T. (2018). Age management in the workplace: manager and older worker accounts of policy and practice. Ageing & Society, 1-21. doi:10.1017/SO144686X18001307
The Economist (2017). “Footloose and Fancy Free: The recently retired may have a promising future as entrepreneurs and giggers” (July 8th)
James, J. B., McKechnie, S., Swanberg, J., & Besen, E. (2013). Exploring the workplace impact of intentional/unintentional age discrimination. Journal of Managerial Psychology, 28(7-8), 907–927. https://doi.org/10.1108/JMP-06-2013-0179
Kunze, F., Boehm, S., & Bruch, H. (2013). Organizational performance consequences of age diversity: Inspecting the role of diversity-friendly HR policies and top managers' negative age stereotypes. Journal of Management Studies, 50(3), 413-442.
Ng, T. W. H., & Feldman, D. C. (2012). Evaluating six common stereotypes about older workers with meta-analytical data. Personnel Psychology, 65, 821-858.
OECD (2020). Promoting an Age‑Inclusive Workforce: Living, Learning and Earning Longer Report
Posthuma, R. A., & Campion, M. A. (2009). Age stereotypes in the workplace: Common stereotypes, moderators, and future research directions. Journal of Management, 35(1), 158-188.
Sarros, JC, Pirola-Merlo A and Baker R (2012) ‘Research Report: The Impact of Age on Managerial Style.
Zheltoukhova, K., & Baczor, L. (2016). Attitudes to employability and talent. Retrieved from https://www.cipd.co.uk/Images/attitudes-to-employability-and-talent_2016_tcm18-14261.pdf
