Older and Out of Work

Lengthy stays on unemployment seem to be the norm for older workers who have lost their jobs. Higher pay and the difficulty of finding higher-level positions may be among the reasons for the long-term unemployment, experts say. At the same time, however, the unemployment rate for older workers is lower than other age groups.

By Kristen B. Frasch

Recent reports suggest the number of older workers who have been unemployed and looking for work for more than a year has grown to record levels, now surpassing every other demographic group.

One survey, released Sept. 14 by Laguna Hills, Calif.-based IMPACT Hiring Solutions, shows the largest group of respondents (55 percent) who have been out of work for more than a year -- in a poll of 912 LinkedIn members broken down by age group -- are 55 and older.

The next-highest unemployed group were 18 to 24 (50 percent), followed by 35 through 54 (49 percent) and 25 through 34 (41 percent).

"The only question asked was, 'How long have you been unemployed and looking for a job?' " says Brad Remillard, co-founder of IMPACT. "Since the LinkedIn community is made up primarily of business professionals, one can draw the conclusion that the majority of the people responding have a college degree, [come from] all functional departments within a company and ... range from entry-level professionals to the CEO suite.

"It doesn't surprise me that the largest number of people unemployed for more than a year is in the over-55 age group," Remillard adds.

"Granted, there may be some age discrimination going on, but for the most part, this age group is the highest-paid group and the most senior on the corporate ladder," which makes them harder to place and more expensive to pay.

Indeed, Steven Sass, director of research at the Center for Retirement Research at Boston College in Boston, says it's an "established fact that it takes older people longer to find work and they have a harder time, especially if they have executive experience."

He cites several reasons older workers would be less attractive to employers: "higher medical insurance, higher expectations [on the part of the more-experienced worker] and lack of certain kinds of skills and time it would take to develop those skills."

Andrew D. Eschtruth, the Center's associate director for external relations, says he would add higher salaries, noting that "their productivity is often not rising, so they may appear less attractive than younger workers."

Older workers are not just out of work -- they are out of work for a while. A September report from Washington-based AARP finds half (49.5 percent) of older unemployed workers had been out of work for 27 or more weeks in August -- more than double the number of long-term unemployed at the start of the recession in December 2007 (23 percent).

Christopher Woock, a researcher at The Conference Board says that older workers have been hit harder than other age groups, although all groups are reeling from the recession.

Interestingly, says Woock, at the same time the number of long-term-unemployed older workers is rising, the actual unemployment rate for those over 55 is the lowest of the demographic breakdowns.

For July 2010, for instance, the national unemployment rates, according to the BLS, were: 6 percent for 55 and older, 7.5 percent for 45 through 54, 8 percent for 35 through 44, 10 percent for 25 through 34 and19 percent for 16 through 24.

"I think the top-line unemployment number says employers still value experience," says Woock. "But ... when you're out of work and on the market, the hiring parties don't necessarily see you that way."

Anita Renzetti, director of the education program for the San Francisco-based American Society on Aging, says that, "when companies consider hiring older-adult workers, they overestimate the disadvantages while underestimating the potential advantages."

"For example," Renzetti says, "hiring teams may assume that older workers have higher absenteeism rates, but studies show this is simply not true."

Experts are reluctant to pin the latest long-term-unemployment numbers on any one cause, such as older workers not knowing how to successfully market their experience and knowledge, or countering the stereotype that younger workers are better at learning new (primarily technological) skills.

As regards the latter, says Woock, the conventional wisdom "does not bear out what the employers are telling us about their frustrations with younger workers' skills and work ethics."

At the same time, Woock, Saas and Eschtruth aren't willing to put much stock in suggestions that subtle -- or not-so-subtle -- age discrimination has risen.

"What the numbers do tell us," says Woock, "is that it's a good time for older workers in terms of having a job, but bad in terms of not having a job. In other words, it's a whole lot harder for older workers to get out of unemployment."

"Coming out of the recession," he says, "when you start thinking about the baby-boomer segment and what they actually offer in terms of quality employment and experience, knowledge capture and knowledge transfer -- both very talked about before the recession -- are going to re-emerge as very important issues for a lot of employers."

Woock's advice to HR? "Now is the time to start thinking hard about [beefing up your] mentoring and reverse-mentoring programs. Those are the processes that build the relationships that facilitate enough knowledge transfer beyond what you would ordinarily get."