Many companies hire young people to increase short-term profits. Generally, younger people will have less experience and therefore work for less money, and insurance is usually less costly for a younger employee.
These businesses may also believe they are taking the long view, hiring people they won’t lose anytime soon to retirement or health problems, a risk they see in retaining or hiring people post-50 (especially post-60, and even post-40). But this practice is rooted in the mistaken assumption that 50+ women and men will follow the same path as generations past.
Thinking about this assumption for but a moment is all it takes for any of us to see how untrue it is. Each generation lives longer, healthier lives than the previous. This is common knowledge. I think the issue is not a lack of knowledge so much as a rut.
Too many businesses are stuck in burdensome systems that they perpetuate unthinkingly. And the leadership at the top is mired not only in these same systems but also in the constant pressure to focus on short-term profits.
The need to please stockholders and boards is a huge factor. Add to this the lingering fears from the Great Recession and we tend to push our noses to the grindstone to the degree that many don’t look up to see where they—and the organization—are headed.
Those leaders who are themselves in midlife or beyond face the added specter of unwanted early retirement. In an era when even CEOs seem to be going through a perpetual revolving door based on short-term performance, this anxiety is well founded at any age.
The irony for 40+ leaders, of course, is that they foster this culture they fear, one of forced early retirement (or even “on-time” but unnecessary and unwanted retirement), by the very actions they are taking to keep their positions by showing a profit.
Even those not in the corporate culture (academics, government workers, small business owners) likely feel the same urge to focus on just the now. We just need to get through the recovery intact, people think, just maintain or regain lost clients (or grants or federal funding or what-have-you). Then we’ll have the luxury of long-term planning and slower yet more sustainable growth.
I wrote more about this recently on my blog at AgelessFutures.com (“What Will You Do with Your Most Innovative Years?”), where I focused primarily on the issue from the perspective of Boomers, whether they are leaders in their organization or not. Obviously, this situation is clearly not ideal for Boomer executives and professionals.
But what many companies don’t seem to realize is that it’s not ideal for the company either. Now, don’t get me wrong. Sometimes we absolutely must focus on survival in the here and now, as humans and as companies. Short-term profits that come with some sacrifice to long-term success can be a smart strategic move if those profits then fund the changes that will most probably lead to long-term success (key word: changes).
If this is not a calculated, evidence-based strategy, however, I would question whether replacing or phasing out experienced people with younger actually does lead to even short-term gains. Once factoring in the training costs (which any HR professional will tell you are significant), potential lost time and revenue to a steep learning curve, and the risk of losing customers who had been loyal more to their long-time contacts than to the company, does the business really come out ahead?
Don’t just assume it logically follows. Always look at the evidence and be open to what it’s really telling you.
Even if you do find the profits firmly in the ledger, consider whether they are enough to offset the potential loss in the long term of losing people during their most innovative years. Studies consistently show not only that the association of youth and innovation is largely a myth but that for innovation to truly develop and reach its full potential (for changing lives as well as for profit), the original innovators need to be present for at least another 10 years shepherding the project along, even if just as consultants.
Losing your most experienced, innovative talent could cost your business significant potential revenue, but that’s not the worst of it. Boomers who are phased out before they are ready to retire (if they ever are) are going to take their ideas with them, possibly to another company but even more likely to their own start-up. Considering that startups founded by people ages 55-64 are the most successful of any age group, you could be creating the competition that puts you out of business.
Now is the time to take a step back and develop a concrete strategy for making the most of all ages and stages in your organization. Don’t make the opposite mistake and rely too heavily on your post-40 people to the exclusion of the younger generations. You need all ages working together for a seamless transfer of knowledge, skills, and that ineffable quality that no training video or 10-binder Best Practices manual can ever teach—wisdom.
On what evidence and what assumptions do your and your organization’s short- and long-term game plans rely?
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Copyright Karen Sands, MCC, BCC, publisher of the complimentary monthly e-letter Future Works® Gazette and www.KarenSands.com/blog. To sign up for her complimentary e-letter and blog, and to learn more about her tools for positively transforming yourself, your work, and your world, visit www.KarenSands.com on your journey to a greater future.
Featured image by wecand.