Ageism: Is it True or is it You? Part I

Source: ASA

Guest post by Lexy Martin, Principal Research and Customer Value, Visier 

If you want or need to work, no matter your age, you should be able to. It’s up to you. 

Organizations also have a responsibility to do something about ageism, which is blamed as the culprit for older workers not finding jobs -- I’ll cover what organizations need to do later.  It’s my point of view, though, that it’s up to you to go after the job you want and get it! 

It’s about having an attitude that you are damn good, a passion for your field or the field you want to break into, constantly learning, and applying new skills. Getting and keeping a job, whether you are 40, 70, or even 25, is about manifesting those four aspects.

I’m 73 and still working because I want to. I’ve not had trouble getting or keeping a job – oh maybe a few times when I was younger before I developed and manifested attitude, passion, and perseverance. If you are blaming your age, the company, the industry, or the younger recruiter that isn’t hiring you, you may be a bit of the problem.

OK. I admit it’s not always easy to be the oldest worker in an organization peopled by workers a third my age. I have to combat my own fears of mental and physical decline more than I like, especially after breaking my ankle a few months ago. I feel I have to spend extra time learning new skills – maybe a new area in my field or a new program. I have to force myself to set goals and meet them. 

I can be my own worst enemy, especially when I let fear that I’m not good enough get in the way of being positive, learning, and performing. For that, I exercise, practice meditation, and have my own personal affirmations. And sometimes, even those don’t help and so I crab to my husband.   But I persevere and maybe that’s my one big piece of advice – keep on being the best you can be despite all that “stuff.''

Now let me cover the reality that ageism does exist, particularly in the Tech industry based on research. At Visier, a people analytics product company, delivered as a cloud solution, we have the opportunity to analyze people data from most of our 100+ customers who represent multiple industries^[1]. 

Over the past few years we’ve seen numerous articles about ageism in the Tech industry, and so mined this data and uncovered some truths and also some myths about ageism. Not only is there anecdotal evidence of ageism but also data-based evidence of systemic ageism. But still – don’t let that get you down. Go for the job you want, because you are great!

Many Tech professionals over age 50 (and even a number over age 40)^[2] believe ageism exists because of their own personal difficulties finding work later in their careers. Certainly, there have been numerous class-action lawsuits about ageism against Silicon Valley giants, even more than about racial or gender bias.

Situational ageism–prejudice or discrimination on the basis of a person’s age–is an important issue organizations across industries should be aware of and take steps to monitor and improve. Not just because of fairness or to reduce the risk of age discrimination litigation, but also because of upcoming retirements and the resulting skills shortages. In the past 50 years, the size of the US workforce has grown an average of 1.7% annually. In the next 50 years, the US workforce size will grow by only 0.3% annually^[3].

Does Ageism Exist in Tech?

In short, yes. A Visier Insights Report on ageism in the Tech industry ^[4] found that Tech does hire a higher proportion of younger workers and a smaller proportion of older workers than in other industries.

Is this disparity in hiring due to systemic ageism in Tech? To investigate this, we first strove to determine if the disparity is related to the availability of talent versus an intentional bias towards hiring younger workers. We found that hiring decisions in Tech do indeed favor younger candidates, hiring Millennials over Gen X candidates at a higher rate than in non-Tech industries.

This answer has traditionally been difficult to get: While leading Tech companies publicize their organizational ethnic and gender composition data, little data has been shared about the age makeup of the Tech workforce⁵.

We began our research into ageism by looking at the breakdown of the workforce by age, comparing the Tech industry to non-Tech industries. Using the Visier Insights database—an aggregation of anonymized and standardized workforce databases that for this report included 330,000 employees from 43 large US enterprises (those with at least two years of verified and validated high-quality data)—we were able to examine the role of age in the workforce like never before.

Debunking Myths about Ageism

Our research showed that the average Tech worker is 38 years old, compared to 43 years old for non-Tech workers. The average manager in the Tech industry is 42 years old, compared to 47 for non-Tech industries.

It comes as no surprise that Tech workers are younger on average, but our research clarified some key misconceptions related to the salary lifecycle, resignation rates, and perceived value of older workers. 

Here are four common ageism myths we debunked with the data:

Myth #1: Older Tech workers are less valued

While the average Tech worker is five years younger than the average worker, it is a misconception that older workers are less valued in Tech. From age 40 onwards, non-manager workers in Tech enter the “Tech Sage Age” and are increasingly likely to receive a top performer rating as they age, mature, and gain experience. Conversely, the proportion of top performers decreases with age in non-Tech industries. This finding suggests that maturity and experience are more important drivers of high performance in Tech than in Non-Tech industries.

Myth #2: Older Tech workers experience a drop in salary

Older Tech workers as a group do not experience a reduction in average salary that is any different from non-Tech industries. Rather, workers in Tech experience the same salary lifecycle as their counterparts in non-Tech.

Myth #3: Newly hired older Tech workers are not paid equitably

Older Tech workers that are newly hired do not — on average — experience a lower wage. Rather, newly hired workers are paid the same average salary as more tenured workers, across all age groups.

Myth #4: Older workers in Tech resign at higher rates

The average resignation rates by age for Tech and non-Tech workforces show that older Tech workers — from age 40 onwards — have the same first-year resignation rate as their non-Tech age counterparts: approximately 10%.

This concludes Part I of Ageism: Is it True or is it You?  Stay tuned for Part II, which will take a closer look at what organizations can do to combat ageism.

Lexy Martin is a respected thought leader and researcher on HR technology adoption and their value to organizations and workers alike. Known as the originator of the Sierra-Cedar HR Systems Survey, she now works at Visier continuing her research efforts, now on people analytics, and working closely with customers to support them in their HR transformation to become data-driven organizations. Lexy is Principal, Research and Customer Value at Visier. Connect with Lexy at lexy.martin@visier.com or personally at lexymartin1@gmail.com.

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^[1] The Tech companies included in our research represent the diverse fields within the Tech industry from Software Development, Hosting, Data Processing, Telecommunications, Computer Systems Design and Scientific Services.

^[2] It’s Tough Being Over 40 in Silicon Valley, Carol Hymowitz and Robert Burnson, September 8, 2016, Bloomberg Businessweek. https://www.bloomberg.com/news/articles/2016-09-08/silicon-valley-s-job-hungry-say-we-re-not-to-old-for-this

^[3] Global Growth: Can Productivity Save the Day in an Aging World? McKinsey Global Institute, January 2015. https://www.mckinsey.com/~/media/McKinsey/Global%20Themes/Employment%20and%20Growth/Can%20long%20term%20global%20growth%20be%20saved/MGI%20Global%20growth_Executive%20summary_January%202015.ashx

^[4] Visier Insights Report: The Truth About Ageism in the Tech Industry, September, 2017. https://www.visier.com/wp-content/uploads/2017/09/Visier-Insights-AgeismInTech-Sept2017.pdf

⁵ Hacking the Diversity Problem with Big Data Analytics, John Schwartz, Data Informed, February, 2015.

Working Girl: Teamwork or Talent?

Link to a related post on collaboration, team building and productivity at the Compensation Cafe: Collaboration: $1.99/lb

Image courtesy of Radisson.

Fact or Myth: Recruiting is Less Important in Economic Downturn

Although gross job creation remains fairly consistent regardless of economic conditions and many companies continue to hire, either consistently or sporadically, many companies have hiring freezes and are moving to outsourced recruiting to cut costs. These companies may be right to focus on cutting costs and/or retaining their critical employees rather than on new recruiting strategies.

Nonetheless, as Dr. John Sullivan points out in his article ‘Managing Recruiting During Economic Downturn: The Top 10 Action Steps to Take’, in volatile economic times companies must prepare not only for inevitable hiring freezes but also periodic spurts of growth. And it goes without saying that when it’s time to hire someone, it’s less expensive if you can find and onboard the right candidate(s) quickly. Moreover, during economic slumps recruiting administrative activities tend to increase as companies are bombarded with resumes from laid-off employees.

Also, while it may be true that the traditional recruiting task of filling seats is less critical during economic downturn, there is much more to strategic recruiting than just filling seats. For example:

Workforce Planning – When it comes to defining medium- to long-term recruiting strategies, it never hurts to take a good hard look at which people and competencies you have today, analyze turnover and projected retirement rates to determine what gaps you have and will have and take a crack at estimating what skills will be needed over the longer term to keep the company successful.

Retention – Retention is a key component of internal recruiting, at least to the extent that it’s harder to recruit someone internally once they’re gone. Recently there has been some dispute about whether retention is less difficult during tough economic times. To a certain extent it is easier – people are more grateful to have a job and the plight of the unemployed tends to put small grievances into perspective. Additionally, while it is true that top people can always find a job, even they hesitate to leave financially sound companies in a fragile economy. But long term, not worrying about retention strategies will backfire when the economy picks up again.

Social Networking – Although you may not be hiring today, you still want to keep an active pipeline of desirable candidates for your company. This includes not only people who are good fits today, but also potential future good fits (such as students, interns and even former employees). There are many ways to do this today that were not thinkable as little as a decade ago, including using professional networking platforms like LinkedIn. And recruiters are not the only ones with new tools to stay connected. Employees also enjoy an unprecedented level of retained connections, which means that they are not only more likely to refer former colleagues but also come up with their current contact details.

Branding – When times are tough, security becomes more important and it’s more challenging to lure desirable candidates away from their current jobs. Companies that want to recruit high performing employees should focus on creating brand awareness that inspires trust and a desire to be part of your fabulous company culture. Thanks to popular adoption of relatively new technologies there are myriad inexpensive ways to do this available today, including social networking platforms, YouTube and even (if you were being strategic all along) reaching out to former employees.

Buying Bulk – Although this analogy is not perfect, people shop at discounted bulk megastores like Costco in order to save money in the long-term. The idea is that they buy more than they specifically need, and pay a bit more than if they had purchased less, but over time save money. And there is something to be said for proactive hiring during a downturn in order to satisfy future workforce needs because it may be cheaper than developing internal skills. This may sound a bit cynical, but although recruiting and onboarding cost money, so does training.

Regardless of economic circumstances, activities such as workforce planning, retaining critical skills, maintaining relationships with past, present and future talent, creating positive brand awareness and cutting recruiting administration costs make sense. These strategies will stand companies in better stead long-term than knee-jerk downsizing and cessation of all recruiting activities.

Fact or Myth: Cascading Goals align work with company goals

Used wisely, goals can effectively align the workforce with company strategy. For example, a company that clearly communicates several clear and attainable objectives (like three) for a quarter or fiscal year has given the workforce some useful high-level guidelines about how to focus their efforts.

But cascading goals, while they can work well, also offer several pitfalls if they are too numerous or only communicated in the context of an annual focal review:

1. Without strict boundaries, they can create a lot of work. As part of each review cycle, someone or some committee needs to formulate the goals and then managers need to translate them into digestible chunks for their teams, these have to be discussed, approved, communicated, understood and reviewed. To be sure, many companies that have implemented cascading goals with measurable performance improvements. But cascading goals can also take on a life of their own and become an end in themselves rather than the means to an end. Come on guys, we have to get these goals defined by tomorrow - who wants pizza?

2. People have short attention spans. After three or four clearly articulated goals, it’s easy to lose track of what one is supposed to be focused on. An extreme example of this was offered in a recent AMR report 'When Performance Management Worlds Collide, Business Will Benefit', which included a case study of a company that ended up with over 1000 goals. How aligned do you supposed employees felt with corporate strategy at that company? Um. . . was that 83% more customer satisfaction and 16% less spending or . . . ?

3. Rarely does a purely top-down approach ensure anyone’s loyalty or buy in and there is evidence to suggest that this is truer than ever. Each day a larger percentage of the workforce embraces Web 2.0 social networking applications that provide real time interaction, and expectations have evolved. Especially among twenty-somethings who grew up using social networking applications as casually as the rest of us used to pass hand written notes in class, we see that employees increasingly prefer an ongoing dialog to a complicated once-a-year edict from on high. Thou shalt sell more. Now go away until next year.

4. A thought-provoking article from the Wharton School* warns against the indiscriminate use of goals, citing evidence that employees with overly-ambitious goals ‘will ignore sound business practices, risk the company's reputation and violate ethical standards.’ Moreover, too often goals are set with inappropriate time lines, which can result in managers ignoring long-term strategic problems in favor of short-term quarterly results. And finally, indiscriminate goal-setting can cause employees to develop a very narrow perspective of their work, which can have a negative impact on quality. Sure we can deliver a system that predicts stock prices to the nearest sixth of a cent up to five years in the future by the end of the year. Just sign right here.

This is not to say that setting goals is bad but they are most effective when they provide clear, attainable direction, have an appropriate scope and time horizon and aren’t used as a substitute for employee manager communication.

*‘Goals Gone Wild: The Systemic Side Effects of Over-Prescribing Goal-Setting,’ Ordonez, Lisa D., Galinsky, Adam D. and Bazerman, Max H., Academy of Management Perspectives, February 2009.

Fact or Myth: One Size Fits All

To be fair, I don’t think too many people actually believe that one size fits all when it comes to employee rewards so it’s not a myth per se. However as we look around we don’t find many companies behaving as if they realize that different demographic groups may respond best to different types of rewards.

An insightful Watson Wyatt report offered a simple graphical representation of the rewards ‘sweet spot’, which includes not only cost to the company and alignment with company strategy but also perceived value to the employee.* This report discussed how different types of rewards are interesting to different worker demographics. To give a rough example, workers in their twenties may place the most value on mentoring and career opportunities; workers in their thirties may be more interested in work life balance; workers in their forties may care about salary and/or span of control; and older workers may have more interest in comprehensive benefits packages.

Within these demographic groupings there may also be special interests: for example, women in their late forties or fifties may be available for and interested in additional responsibility once their children are grown.

I don’t want to imply that all workers will fit neatly into their assigned demographic group when it comes to rewards, nor does this mean that just because someone wants to work at home once a week they don’t care how much they earn. Nonetheless, it is possible to analyze trends and get better at offering the right mix of rewards.

An interesting talent management use case described how the AlliedBarton Security Services' human capital department used various performance measurements to discover that managers were leaving just as they started to get productive. This case study offers an excellent example of how a company analyzed a specific employee cross-section and discovered something worth knowing. The same principal could be applied to different demographic groups to assess whether there is an attraction or retention problem within a particular group, which might point to an uncompetitive rewards package.

Conversely, rewards packages can be tailored to target and attract particular demographic groups once you better understand their priorities.

A thoughtful gift should consider the taste of the receiver and the same is true of rewards. And the bottom line benefit of offering creative rewards is that it can help companies achieve their workforce planning objectives without spending more. For example, in another case study, PepsiCo invited employees to identify one thing that would help them each achieve better work/life balance. Once agreed upon, managers shared responsibility for making sure the employee could put their ideas into action and that work performance didn’t suffer. Since many of the ideas involved different work hours or less physical time at the office, employees were motivated to ‘work smarter’ in order to have a better work/life balance.

The takeaway here is that smart talent management strategies don’t focus exclusively on the twin holy grails of salary costs down and rewarding ‘top performers’, which seem to be the prevalent themes. Instead the focus should be on the broader view of delivering more compelling and cost-effective rewards packages to attract, retain and motivate different employee groups.

*“A Successful Total Rewards Strategy: Delivering a Compelling Employment Deal at the Right Cost”, Jamie Hale and John Coskey.

Fact of Myth: There are two kinds of employees - top talent and everyone else

Companies are continually advised to invest in their top talent and this is not bad advice. But the almost exclusive focus of talent management authorities on ‘top talent’ seems a bit myopic and may be an overly simplified version of the full picture.

In reality, a lot of people contribute to the success or failure of a company and even ‘top talent’ depends on the performance of these people. And all too often, people identified as top talent are those who are involved in high profile projects rather than the unsung heroes quietly pulling their weight in less visible areas. To say that only ‘top talent’ should be retained, rewarded, mentored and promoted is misleading to say the least and borderline irresponsible.

Recently, Pay for Performance strategies have come under fire for failing to achieve their objectives or even appropriately recognize top performers. It seems that quite a few managers are either afraid of being disliked and give everyone a raise, or else inflate their performance figures to increase their own budget allocations, so that the average delta between high and low performers is too small to motivate top performers.

There is also some question of whether monitary rewards motivate at all in companies where the entire talent management strategy begins and ends with pay. According to Jeffrey Pfeffer, Organizational Behavior Professor at Stanford’s Graduate School of Business in Workforce Management : “Typical pay increases are not enough to motivate employees, but they are enough to irritate them."

I love that. I wish I had said it. I mean, first.

These are legitimate concerns. Certainly it makes no sense to throw ‘top performer’ rewards at poor or mediocre performance and effective talent management involves more than just a paycheck.

But whatever shape talent management takes in your company, a successful talent management strategy should focus on both top performers and the people who enable them.

Think of it this way: If you only recognize and reward ten people, why should people who are not in the winner’s circle go the extra mile to be #11?

Fact or Myth: Employee surveys and honest employee feedback

Employee surveys can provide some useful information about employee attitudes and aptitudes but are a poor substitute for engaging face to face with people. For one thing, not everyone believes that employee surveys are anonymous. Unless people are so dissatisfied they are ready to run the risk of repercussions they probably won’t be totally truthful, at least not in writing.

This means that companies that conduct employee surveys may get plenty of innocuous feedback on what kind of soft drinks people would prefer at the next company meeting and maybe even the odd toned down criticism or suggestion. Surveys may also be a useful tool for analyzing general skills or preferred types of compensation or benefits by demographic group. However, they probably won't result in full disclosure about poor management practices, inefficient processes or slacking coworkers.

Talent management is a human problem first and a software problem second. A company of any size generally needs some sort of technical solution to support performance and compensation processes and employee surveys may be part of a comprehensive talent management solution landscape. But regardless of company size, also important is the good old-fashioned, non-technical art of conversation.

It’s only natural: people will share more with another person who is really interested and listening than with an online survey tool. And potentially, it’s the information that people hesitate to document in a survey that may be used against them that you really want to know.

Another point to consider is that people who are not in the direct communication path of decision makers may have great ideas worth tapping into. A case study that demonstrates this point was recently presented by the editors of HR Executive Online, in which a company invited employees to form teams and come up with a 10-minute, three-slide presentation for a new product idea and its marketability. Two finalist teams were chosen and given six months to prototype their ideas with paid time off from their regular work. Today, one of the products stands an 80% chance of going into full production, while the other holds a 50% chance.

Not a bad result just for listening to people who don’t normally get a chance to share their thoughts and ideas with executives.

Some people may prefer the possibly anonymous, in-your-own-time format of online surveys. And there may be some generational differences in preferred approach. But generally speaking, companies that want to connect with people and create a team culture won’t get very far without talking with people.

Fact or Myth: HR professionals lack financial expertise

Do I really need to say it? Probably not but I will anyway: Talent management is about business results. Period. If you aren’t getting good business results from your talent management strategy you’re wasting money. Managing talent is the means to an end, and therefore needs to be done well in order to achieve results, but it is not the end in itself.

It’s the same old story: Human resources professionals stress the importance of talent management strategies without being able to demonstrate clear financial benefits. Citing HR’s inability to produce convincing financial data, financial executives push back on the additional expense. A clear illustration of this can be found in David McCann’s ‘Memo to CFOs: Don’t Trust HR’* and the conclusion seems to be that HR isn’t good enough at numbers to make their case.

Maybe that’s true. After all, we don’t find that many MBAs working in human resources, although I question whether it really takes an MBA to get that talent management is about business. If we take a deeper look at companies and how they track and manage their revenues and costs, we find two things that give financial professionals a clear edge over their HR colleagues when it comes to getting executive attention:

1) all financial numbers feed centrally into a general ledger system because consolidation of data is required for financial reporting (and therefore the CFO makes sure this happens); and

2) people are reported as costs in these systems because financial systems can’t measure their intrinsic value.

Human resources professionals may well lack the analytical skills needed to justify talent management investments. But more importantly, they lack the tools to do so.

Not for lack of trying. Many HR departments have persuaded their CFOs to invest in talent management solutions, reasoning that this will help them roll out strategic talent management strategies that in turn justify the investment.

Unfortunately most of these solutions tend to be separate from core business data and therefore lack the ability to perform meaningful financial analysis without significant additional investment. Therefore, many companies have implemented standalone talent management solutions only to find that getting the value out of the solution requires expensive integration to core business applications and workforce analytics platforms. It can be made to work, but it’s difficult and expensive.

And the irony is that after making the initial investment in talent management solutions, HR still lacks the tools to justify additional investment.

Talent Management is about business but by and large talent management solutions are not business applications. So instead of blaming HR for lacking analytical skills - although this may be fair criticism - maybe it’s time to give HR the right tools.

I'm just saying.

*‘Memo to CFOs: Don’t Trust HR,’ McCann, David, CFO.com.
**Also worth reading is Jim Holincheck’s commentary on this article.