Older Workers: Can They be Motivated to Seek Employment in the Hospitality Industry a Preliminary Report
Authors: McCool Audrey C. , Stevens George E. 
Published: March 2007

Changes in retirement policies over the past 30-45 years have significantly influenced changes in employment patterns in the United States. These changes have made early retirement very attractive for many employees, and it is now an accepted practice for workers to retire in their 60s or even while still in their 50s. However, the changing labor force demographic pattern is making it increasingly undesirable for persons to leave the work place early. If the current demographic projections are correct and the current economic development trends continue, it may be necessary for firms to consider revising today's retirement policies if there are going to be enough workers to meet the projected employment demands.

Recently there has been considerable interest in older persons as a new labor resource. Interest has generally been directed toward recruitment of older persons back into the labor force after they have left it for retirement. However, once persons leave the work force, it is generally difficult to motivate them to return. A more effective approach to the use of older workers would be to focus more on their retention in the work force as an alternative to retirement, especially early retirement.

This presentation focuses on a preliminary report of findings from an ongoing research project regarding the employment of olderpersons in the service industries. The project is funded by the AARP Andrus Foundation. The data are being gathered through survey research with the questionnaires distributed both by mail and by personal contact with groups of older persons and service industry managers. The data collected to date represents responses from 491 employees, 198 of which are age 55 or older, and 373 managers of service industry firms.

As a part of the data collected, both employees and managers were asked to evaluate two lists of factors on the basis of how important they felt each factor would be as an influence on older persons' decisions to retire or to continue to work. Only three factors were felt to be even moderately important influences on a person's decision to retire. These factors were a) health problems (stress, illness); b) an attractive retirementbenefits package offered; and c) the employee feels he/she has made his/her productive contribution. Factors such as boredom, competition from peers oryoungerpersons, or a spouse's retirement were considered to be unimpor tant influences. This evaluation underscores the need to make changes in the structure of retirement packages if employees are to be retained beyond the age at which they would otherwise feel they had made their productive contribution and were entitled to retirement.

When the employees' evaluations of these factors were compared to the managers ; significant differences (P<.01) were found for all factors except a) the employee feeling that he/she had made his/her productive contribution, and b) offering attractive retirement benefits package. The differences arose both from different priority rankings for the factors and a higher level of importance placed on all factors by the employees than by the managers.

When possible factors which could influence an employee to continue working beyondthe "usual"retirement age were considered, three factors were rated as very important and eight more were considered to be at least moderately important by all respondents. The three very important factors were a) job satisfaction; b) health care benefits; and c) company supportive of continued employment. Other important factors included a) provision for needed income; b) working provides meaning and structure to life; c) comprehensive fringe benefits; d) inflation; e) increasing pension package value; f) work schedule flexibility; g) boredom with retirement; and h) personal identification with the corporation. These evaluations underscore the importance of placing employees in positions in which they are satisfied with their accomplishments as well as the need for personnel policies and practices which respect these employees as persons and which pro vide them with a comprehensive benefits package with a strong emphasis on health-care benefits. It is apparent that both the psychological as well as the financial aspects of employment must be considered by a firm interested in retaining older persons as employees. Surpris ingly, factors such as social contacts, death of a spouse, or fear of retirement were not seen as important even though older persons are often perceived as being isolated and lonely and frequently living far from their families.

There were highly significant differences (P<.001) in the employees' and the managers' evaluations of 9 of the 16 factors considered. Differences were not significant at P<.05 for only five of the factors considered. These five factors were a) increasing pension package value; b) work schedule flexibility; c) comprehensive fringe benefits; d) health care benefits; and e) job satisfaction. These factors were considered to be important by all respondents with the two showing the least disagreement (health care benefits and job satisfaction) being the two most important factors to consider.

Many differences in the rank order assigned to these factors by the employees and the managers were observed. Job satisfaction and health care benefits were considered by the employees to be the two most important factors encouraging them to stay working, but even though the differences in the mean values given to them byboth the managers and the employees was not significant, these two factors were ranked fourth and sixth, respectively, by the managers. The managers ranked a) company support of continued employment (third for employees); b) provision for needed income (fifth for employees); c) working provides meaning and structure to life (seventh for employees); and d) inflation (eighth for employees) above job satisfaction and health care benefits as factors that they felt were most important to employees. The managers also gave low rankings to two factors important to employees. These factors were a) comprehensive fringe benefits (ranked fourth by employees; ninth by managers) and b) increasing pension package value (ranked sixth by employees ; fourteenth by managers). Considering the high value employ ees place on comprehensive benefits and retirement packages, managers may want to focus neweffort into the evaluation and modification of theirbenefit and retirement packages.

It should also be noted that regardless of a high or low ranking given to the factors considered, the mean of the employees' value ratings always exceeded the mean of the managers'ratings, usually at a highly significant level. Since even the items lowin rank are still influential to some extent on employees' decisions to remain on the job, managers should be aware that they are underestimating the influence that a broad range of factors may have on their employees' decisions to continue working.

All of the factors on both scales were correlated with the several demographic variables included in the survey to determine if there was a particular employee profile which placed the highest value on each of the several factors. The most important correlation observed was the increased value placed on all factors by female employees. Sixteen factors significantly correlated with sex with nine of these factors correlated at P<.01. It seems as though service firms have consider able potential forstructuring the work environment in ways which will help them retain their female employees. This finding seems to be an important consideration as these firms continue to employee increasing numbers of women at all organizational levels.

Household income level and educational level were also significantlycorrelated with most of the factors. While the profile was somewhat varied from factor to factor, in general employees living in a household with an approximate income level of $30,000 or less and employees with no more than a high school or technical education placed the greatest value on these factors, thus should be the most amenable to influence by the firm's actions. Again, since many of the persons employedbyservice firms fall into these categories, managers should be aware that there are many opportunities to influence their employees' decisions to remain on the job or to retire.

In summary, the preliminaryresults of this surveyseem to indicate that there are many opportunities for service industry managers to influence their employees' decisions to remain on the job, thus effectively reducing their need to recruit employees as the potential labor pool continues to decline. However, there also seems to be many significant differences between the values placed on numerous influencing factors by the employees and by the managers. Managers need to realize that their employees place much higher value on the several factors considered in the study than they think that they do. They also need to realize that the employees' priorities seem to be considerably different from what they appar ently think they are. Thus, itmaybehoove managers to become more aware of their employees'interests and concerns and to implementreal efforts to reviewandrevise theirexisting benefit, retirement, and overall compensation plans. Theirefforts may resultin significantemployee retention, particularly for their female employees with no more than a high school education who are working in positions providing an income resulting in $30, 000 or less total household income. Since this profile fits many service-industry employees, the time and resource investment required to encourage them to remain on the job may well result in a high level of long-term in vestment return.