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AARP Study Debunks Myths, Shows 50+ Workers as a Solid Investment


Contact: AARP Media Relations, 202-434-2560,

A landmark new report that challenges myths about workers 50 and older shows that those employees often have productive advantages that make them far more cost-effective than is generally believed.

The report, "The Business Case for Workers Age 50+", prepared by global professional services firm Towers Perrin for AARP, noted that there is a common business perception that 50+ workers "cost more" than younger workers.

The AARP/Towers Perrin analysis said that the extra per-employee total compensation cost of retaining or attracting more 50+ workers ranges from negligible to three percent in key industries. At the same time, the research found that older workers are more motivated to exceed expectations on the job than younger workers.

Earlier Towers Perrin research found that motivation is highly correlated with engagement, making it clear that both engagement and motivation increase with age. Moreover, this research found a strong relationship between employee engagement and financial performance, showing that companies with higher levels of employee engagement tend to outperform those with lower levels of engagement.

"These findings are especially important because the workforce is aging, labor shortages are projected in a number of sectors, and many employees intend to continue to work beyond the retirement age," said AARP CEO Bill Novelli in releasing the study today.

"Keeping people in the workforce longer benefits the employee, the employer and society as a whole," Novelli said.

"The report concludes that enhancing retention or hiring of older workers can result in marginal differences in total cost for the talent pools studied, while experienced people can offer a distinct performance advantage in many key roles," said Towers Perrin Principal Roselyn Feinsod.

The AARP study comes at a time when projections show that by 2012, nearly 20 percent of the workforce will be age 55 or older, a jump from under 13 percent in 2000. This pattern is expected to continue well into the future, given that AARP surveys have shown that more than two-thirds (68 percent) of 50 to 70 year old workers say that they plan to work into their retirement years or never retire.

"The aging of the population may put employers in a tight situation," said Alicia Munnell, director, Center for Retirement Research at Boston College, in responding to the study.

"They will no longer be able to rely on a rapidly growing group of younger workers in the future. Increased employment of older workers seems like a natural solution, but employers will have to change their hiring and retention policies if they want to attract these highly productive older individuals," Munnell added.

AARP commissioned the study in order to assess the strength of the business case for investing an employer's resources to retain and attract workers 50+. Towers Perrin developed the analysis based on a comprehensive review of proprietary Towers Perrin sources, AARP research, and public sources, as well as other third party sources. These included demographic data, benefit program data on over 700 companies, and research with workers and employers.

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