We, along with others, have highlighted the need to engage and retain  older workers to address some of these challenges associated with an  aging workforce. Workers also cited what they perceived as their own limited skills  and employers’ age discrimination as barriers to continued employment. Obstacles to Engaging and Retaining Older Workers

According to participants at our forum, some of the key obstacles that  hinder continued work at older ages include: first, employer perceptions  about the cost of employing older workers; second, employee perceptions  about the costs and benefits of continued work; and third, changes in  industry and job skill requirements, which may hinder older workers from  remaining employed or finding suitable new employment. In addition to these financial  incentives, jobs that are physically demanding or have inflexible schedules  that compete with family caregiving needs also provide strong  disincentives to continued work. For some, the incentive to retire lies in the lack of suitable job  opportunities. In addition,  layoffs due to changes in the economy, along with the lack of skills needed  to compete in the global economy, are also challenges facing older  workers. Best Practices and Lessons Learned on Engaging and Retaining Older Workers

We, along with others, have previously reported on the importance of  flexibility in recruiting and retaining older workers. In order to effectively  engage older workers, forum participants suggested implementing new  recruiting approaches, workplace flexibility, the right mix of benefits and  incentives, financial literary education, and consistent performance  management systems. For example, some employers have established  partnerships with national organizations, such as AARP, to help advertise  themselves as employers of older workers. Other employers have adapted job  designs to accommodate the physical constraints of older workers. Modifying pension plans can also entice workers to work longer. Improving Employee Financial Literacy and Helping Employees Better Prepare for Retirement

With older Americans living longer and spending more time in retirement,  workers will have to ensure they have a realistic plan to provide for  retirement security that may include working longer. To limit exposure to age discrimination litigation, one participant said a  consistent performance management system is essential for dealing with  all workers. Suggested Strategies for Policymakers and Employers

Given the scope and importance of this issue, participants offered a  number of strategies to encourage older workers to remain in the labor  force and to encourage employers to engage and retain older workers. One strategy discussed  was the establishment of a national clearinghouse of best practices, such  as the different kinds of work structures, recruiting techniques, and  workplace flexibilities used by some employers to attract and retain older  workers. Second, it can help to foster the kinds of public/private partnerships that  would promote the national campaign, begin a national discussion, or  contribute to the national clearinghouse discussed above. And third,  through specific legislation or regulations that would increase flexibility  for employers and employees, the federal government can help create new  models of employment for older Americans. Given existing trends in the aging of baby boomers, pressures on federal  entitlement programs, and threats to individuals’ retirement security, it is  in the nation’s interest for people to work longer. Harnessing the benefits  of this growing group of potential older workers requires that barriers to  continued work be removed sooner rather than later. Clearly, there is  also a role for government to play, whether it be through becoming a  model employer of older federal employees or helping to foster flexible  work arrangements in the private sector to meet the needs of older  workers, or by considering legislative and regulatory changes, including  those that Labor’s interagency task force may propose.
Why GAO Did This Study

More Americans remaining in the workforce at older ages could lead to benefits at several levels. First, working longer will allow older workers to bolster their retirement savings. Second, hiring and retaining older workers will help employers deal with projected labor shortages. Third, older workers will contribute to economic growth and increase federal revenues, helping to defray some of the anticipated costs associated with increased claims on Social Security and Medicare. Despite all of these gains to be had, there are barriers to continued employment for older workers. In addition, some employers remain reluctant to engage and retain this group. It is in the nation's interest for people to work longer, which requires that barriers to continued work be removed sooner rather than later. This testimony highlights issues discussed at a recent forum GAO convened on engaging and retaining older workers, as well as prior GAO work. Forum participants included experts representing employers, business and union groups, advocates, researchers, actuaries, and federal agencies. These highlights do not necessarily represent the views of any one participant or the organizations that these participants represent, including GAO.

What GAO Found

Obstacles continue to exist for older workers seeking continued or new employment and for employers who want to attract or retain older workers. The following obstacles, best practices, lessons learned, and strategies to address some of these obstacles and promote work at older ages were discussed at a recent GAO forum on older workers. Key Obstacles: (1) Some employers' perceptions about the cost of hiring and retaining older workers are a key obstacle in older workers' continued employment. (2) Workplace age discrimination, the lack of suitable job opportunities, layoffs due to changes in the economy, as well as the need to keep skills up to date, are all challenges facing older workers. (3) Strong financial incentives for workers to retire as soon as possible and some jobs that are physically demanding or have inflexible schedules provide strong disincentives to continued work. Best Practices and Lessons Learned: (1) Use nontraditional recruiting techniques such as partnerships with national organizations that focus on older Americans. (2) Employ flexible work situations and adapt job designs to meet the preferences and physical constraints of older workers. (3) Offer the right mix of benefits and incentives to attract older workers such as tuition assistance, time off for elder care, employee discounts, and pension plans that allow retirees to return to work. (4) Provide employees with financial literacy skills to ensure they have a realistic plan to provide for retirement security. (5) Treat all employees in a fair and consistent manner and employ a consistent performance management system to prevent age discrimination complaints. Strategies: (1) Conduct a national campaign to help change the national mindset about work at older ages. (2) Hold a national discussion about what "old" is to help change the culture of retirement. (3) Create a clearinghouse of best recruiting, hiring, and retention practices for older workers. (4) Strengthen financial literacy education to help workers prepare to retire.(5) Make the federal government a model employer for the nation in how it recruits and retains older workers. (6) Create a key federal role in partnerships to implement these strategies. (7) Consider specific legislation or regulations to increase flexibility for employers and employees to create new employment models.