Small retailer hiring of older persons: an assessment.

Peterson, Robin T.

INTRODUCTION

The last few decades have witnessed a dramatic aging of the population in most developed and some developing economies (Henderson, 1998). The mean age of individuals comprising the population in the United States has advanced, particularly as a result of large numbers in the baby boom population (U.S. Bureau, 1998). In particular, the post-65 senior citizen grouping has expanded at a rapid pace. Improved eating habits, exercise programs, and medical care have created a pattern marked by numerous older persons, many with mental and physical health statures that are far improved over their predecessors (Thackray, 1994). And a large proportion of this grouping prefers to continue working past the customary retirement ages, either on a full or part time basis (Flynn, 1995). This movement reverses earlier trends toward earlier retirement ages, which began in the 1980's (Costa, 1998). The 1990's have witnessed larger percentages of older and more experienced individuals in the work force than was the case for previous decades (Landry, 1999). Research indicates that 15% of the population over the age of 65 are working either full or part time (Leonard, 1999).

During periods of low unemployment, such as the late 1990's, numerous small retailers encounter a scarcity of qualified job applicants They may find it difficult to acquire the personnel which they seek, particularly if essential skills are in high demand. A solution to this problem may lie in the direction of employing older persons, some of which are already in the ranks of the retired.

Some managers of small retail units do not hire seniors, at least not to any substantial degree. In fact, a commonplace development is when management reduces the size of the workforce to become more competitive, older workers are often targeted for layoff or firing (Pave, 1991). Cultural norms in the United States may be responsible for the tendency to target younger workers. Many employers appear to hold the view that these individuals are superior potential employees (Zemke, 1999). They may assume that older people are too old to train, unlikely to stay long enough to justify the investment in them, and more inclined to short-term absence (Worsley, 1996). Research has demonstrated potential age-related bias in the U.S. culture. In one study younger raters tended to give less favorable ratings to older workers when they were not provided with job-relevant information about the workers and when they concurrently rated old and young workers (Burke, Finkelstein & Raju, 1995).

Some small retail managers may not employ seniors because of beliefs that these persons are not as capable as their younger counterparts. According to one source, employers have concerns that older workers cost more, suffer more frequent and more severe illness, cannot learn new skills, and are less productive (Kaeter, 1995). Another source reports that reservations for hiring older managers were overqualified, too old, unfamiliarity with industry, unemployed for more than six months, and changing job functions (Top Five, 1998). There are other possible reasons for not hiring the elderly. Medical and insurance costs may be perceived as excessive. Some potential employees may not have needed computer skills. Others may be perceived as not being physically or mentally capable of fulfilling their responsibilities (Barber, 1998).

There is evidence that older workers can be very productive members of the work force. One study examined the earnings and the productivity of workers in various age groups. It found that workers age 55 and older received higher earnings than younger workers but that this larger level of earnings was more than counterbalanced by larger productivity (as measured in marginal products (Hellerstein, Neumark & Troske, 1999).

Another inquiry surveyed398 employers on their perceptions of employees of various ages, on 12 attributes. Older workers received more favorable ratings overall, including such categories as attendance and salary expectations (Forte & Hansvick, 1999). One sphere where the older workers received high marks was in tasks related to cognition. Research had demonstrated that men and women in the 55-72 age grouping score as well or better as younger individuals in cognitive tasks (Busko & Raynor, 1999). Further, there is evidence that involvement in substantially complex work improves intellectual functioning more among older than among younger workers (Schooler, Mesfin, & Oates, 1999).

Older employees have considerable potential as productive retail employees. Many retailers have realized the value that older workers bring to their stores and have begun aggressively recruiting them (Mullin, 1998). One study revealed thatboth younger and older customers held more favorable attitudes toward older than toward younger salespeople. Both groups of customers indicated that older salespeople showed more interest in helping them, were more likely to provide information, and showed more respect for them as customers (Kang & Hillery, 1998).

It appears that there is evidence and perceptions on the part of managers both for and against the hiring of older workers (those over age 65). This inquiry was conducted to examine the issue in the context of small retailers.

The purpose of this study was to uncover insights on four research objectives:

1. To determine the extent to which small retailers in the United States hire senior citizens.

2. To discover the advantages which small retail managers ascribe to older workers.

3. To uncover the shortcomings of older employees, as perceived by small retail managers.

4. To acquire estimates by small retail managers of their expected future hiring of seniors.

THE INQUIRY

The data-gathering effort involved mailing twenty questionnaires to a randomly-selected set of 50 college and university Small Business Institute directors situated in 50 states. Hence a total of 1,000 (50 x 20) questionnaires were forwarded. Previous studies have indicated that a mailing of this magnitude to SBI directors tends to produce a sample size that is amendable to the statistical analysis utilized in this study (Peterson, 1996). The sampling frame was the membership directory of the International Council For Small Business, 1999. The geographic dispersion of the sample was designed to generate results that were reasonably representative of the population of small business at large. A letter indicating the purpose of the inquiry accompanied the questionnaires. It requested that the S.B.I. director distribute the questionnaires to twenty past and present S.B.I. retail clients and to collect the questionnaires one they were completed and send them back to the researchers. In turn, non-respondents received follow-up letters. The data was acquired during November and December of 1999.

This mailing produced a sample size of 381 usable returned questionnaires (response rate of 38.1%) from 22 geographically dispersed states. Previously, the questionnaires were pretested on a sample of 25 small retail managers located in the city where the researchers were employed. The managers comprising the final sample were all present or past S.B.I. clients. Hence they satisfied the requirements for categorization as a small retailer, in accordance with the guidelines specified by the Small Business Administration agency.

The questionnaire asked the respondents if they hired persons age 65 years of age and older. Those who responded affirmatively were asked to specify the percentage of the work force that were seniors. In addition, they were requested in set forth their perceptions of the advantages and shortcomings of employing older individuals. In addition, they were requested to estimate if they would employ more or less or about the same percentage of seniors in the future as they had to date. In addition sales revenues of the respondents' firms were solicited.

The managers who made up the sample were requested to indicate their 1998 sales revenues. The median figure was $784, 900, reinforcing the notion that the study included only small retailers. Since the inquiry focused only on small retailers, its findings and conclusions cannot be generalized to the full population of retailers. The industry breakdown of the study was twenty-two percent general merchandise and seventy-eight percent limited line and specialty stores.

FINDINGS OF THE STUDY

The subjects were asked if their companies hired seniors and, if they did, the percentage of the work force accounted for by these individuals. Table One sets forth the results. The largest proportion is in the "none" grouping, followed by the 5-9.9% and the 1-4.9% categories. It appears that the bulk of the work forces sampled embody only a relatively small percentage of seniors in their ranks. In contrast, persons age 65 and older make up over eleven percent of the total United States population (U.S. Bureau, 1998).

The respondents were requested to indicate the advantages of employing older persons, based upon their experiences with members of this grouping. The researcher reviewed the specific advantages cited by the subjects and compressed these into categories that were developed through a content analysis of advantages cited in seven published manuscripts dealing with the hiring of seniors. Table Two presents the categories of advantages and the frequencies associated with each one. It should be noted that the total frequencies exceed the sample size, since all of of the subjects provided more than one.

The largest frequencies reported were for self motivated, disciplined, dependable, respect for authority, mature behavior, loyal to company, and experienced. Other important advantages were trained, follow instructions, work schedule is flexible, responsible, and honest. Also mentioned were has credibility with customers, few drug problems, willing to train, punctual, limited family, high character, and other.

Many of the advantages, especially those with high percentages of response, relate to the character or moral strength of employees. Examples are self motivated, disciplined, dependable, and respect for authority. Other advantages relate more to traits or characteristics, such as experienced, trained, and limited family. Still other advantages, such as follow instructions, mature behavior, and punctual refer to conduct or behavior.

The disadvantages reported by the subjects of employing older persons appear in Table Three. As measured by raw numbers, the advantages outweigh the disadvantages. There are nineteen advantages and sixteen disadvantages which were uncovered. In addition, the frequencies associated with the advantages were 1,143, while those associated with the disadvantages were 793, providing some evidence that the respondents experience some degree of satisfaction with these individuals. In the table, those disadvantages which have frequencies significantly larger than those in their columns, according to Chi Square tests at the .05 level, are identified with asterisks.

According to the data in the table, the significant disadvantages are physical limitations, less productive, not adaptable, difficult to train, administrative complexities in recruiting and hiring, and cost of medical benefits. Other frequently-mentioned disadvantages were inflexible working hours, do not relate to younger employees, too slow, illness, and will work only part time. Finally, some subjects mentioned forgetful, lack computer skills, complain, unsociable, and "other".

Many of the disadvantages are characteristics or traits of older persons, such as physical limitations, not adaptable, difficult to train, and illness. Other disadvantages relate to the conduct or behavior of these individuals. Examples are less productive, too slow, and will work only part time. Finally, some disadvantages relate to environmental constraints, such as administrative complexities in recruiting and hiring and cost of medical benefits. None of the disadvantages refer to lack or character or moral strength. The analysis of the Table Two data indicated that character or moral strength elements were frequently-cited advantages of hiring seniors.

The questionnaire requested that the subjects indicate the degree to which they planned to employ different proportions of older persons in the future than they do at present. Table Four sets forth the results. Fifty percent forecasted a larger percentage for the future, thirty six percent estimate about the same, five percent a smaller percentage, and seven percent did not know. These estimates suggest a more prominent role for seniors in the work forces of small retailers in the future.

SUMMARY AND CONCLUSIONS

The inquiry described in this paper was employed to assess the extent to which a sample of small retailers employed older persons. In addition, an investigation was made of the perceived managerial views of the advantages and disadvantages of employing seniors and estimates of expected hiring of seniors. The majority of the respondents employ older persons. However the percentage of their work forces accounted for by these individuals is moderate. A number of advantages of employing these individuals were cited. The most frequently mentioned advantages were self motivated, disciplined, dependable, respect for authority, mature behavior, loyal to company, and experienced. The subjects mentioned numerous advantages which related to character or moral strength. In addition, they provided other advantages related to characteristics (traits) and behavior.

The most frequently cited disadvantages provided by the respondents were physical limitations, less productive, not adaptable, difficult to train, administrative complexities in recruiting and hiring, and cost of medical benefits. The largest number of these related to characteristics (traits). Others related more to behavior and environmental constraints confronting the firm.

Slightly more than half of the subjects forecasted increased hires by their firms of seniors in the future. Over one third reported that the percentage would remain the same, while smaller numbers estimated decreases in the percentage of seniors or "don't know".

The subjects associated numerous advantages with the employment of seniors. This suggests that small retailers who fail to hire older persons may forego potential advantages arising from a large pool of operative and managerial talent. This is especially true for those small retailers that have difficulty in attracting and maintaining high quality personnel. If they launch recruiting campaigns focusing on older persons, they may be able to surmount this problem.

A negative reason for employing older persons is avoiding lawsuits. Age discrimination is one of the practices which is prohibited by the federal fair employment laws. Lawsuits revolving around this issue can be costly to the firm, both in dollar expenses and in loss of goodwill in the community at large.

Certainly, small retailers who contemplate hiring older persons should evaluate the strengths and weaknesses of these individuals. Should self motivation, discipline, dependability, respect for authority, mature behavior, loyalty to the company, and experience be sought by the firm, older individuals may be a good target. On the other hand, if the vacant positions could not be filled with persons who have physical limitations, are less productive, not adaptable, difficult to train or there are high administrative complexities in recruiting and hiring or high costs of medical benefits, retail recruiters should exercise caution before hiring older persons. However, it is sometimes possible to make modifications, such as alterations in work methods, that will enable seniors to work as productively as their junior counterparts.

Companies who seek job applicants from the ranks of older persons may find it necessary to use alternative recruiting sources. Some organizations, such as Aging in America, specialize in placing seniors. In addition, there are numerous senior citizen centers who are involved in job placement for their members. Some employment agencies specialize in this field. Further, older persons can often be reached through help wanted sections of newspapers and magazines. Small retailers who seek senior employees can often benefit from the use of these particular sources.

When small retailers hire older persons, they may find if necessary to alter work methods and supervisory techniques. As seniors are self motivated, disciplined, and dependable, they may require less close supervision. Since they tend to respect authority, have maturity and have company loyalty, it may be less necessary to monitor and follow up their work than is the case for younger workers. It may be necessary to lessen physical demands for some positions. Further, it may be advisable to convert jobs to part time or job sharing and to utilize flexitime, if this is not already in place.

Many small retailers will discover that their training methods and procedures should be altered for seniors. As numerous older workers are experienced, they may require less training in certain areas. The training format may have to be altered, as by presenting ideas at a slower pace. A benefit to the recruiters is that the training benefits may exist for an extensive time period, as seniors' turnover is less than that for other workers and they are less prone to move on to other companies after receiving their training.

The study described in this paper had several limitations. One is that the sample was composed of retailers who had a relationship with colleges and universities. The sample may be biased in favor of firms that are actively seeking information and therefore more knowledgeable regarding current issues such as the benefits of hiring older persons. Further, the study did not address differences in hiring and perceptions of seniors between managers serving in small retailers of different sizes. It is possible that very small retailers, for instance, might differ in their hiring practices and perceptions about seniors from larger retailers. Even though all of the retailers were classified as "small" there are differences in size within this category. Finally, the hiring practices and perceptions of managers may differ from one retail category to another. It is entirely possible that there would be differences between electronics and grocery stores, for instance.

REFERENCES

Barber, D. (1998). The dawning of the third age, Management, 45(5), 46-47.

Burke, M. J., L. M. Findelstein & N. S. Raju. (1995). Age discrimination in simulated employment contexts: An integrative analysis, Journal of Applied Psychology, 80 (6), 652-664.

Busko, D. & M. Raynor. (1999). More on the aging worker: Who are they and how can they stay vital?, Journal of Management Consulting, 10 (3), 68-69.

Costa, D. L. (1998). The evolution of retirement: Summary of a research report, The American Economic Review, 88 (2), 232-236.

Flynn, G. (1995). Retirees find that temp work doesn't get old, Personnel Journal, 74 (4), 56-59.

Forte, C. S. & C. l. Hansvick. (1999). Applicant age as a subjective employability factor: A study of workers over and under age fifty, Journal of Employment Counseling, 36 (1), 24-34.

Hellerstein, J. K., D. Neumark & K. R. Troske. (1999). Wages, productivity, and worker characteristics: Evidence from plant-level production functions and wage equations, Journal of Labor Economics, 17 (3), 409-446.

Henderson, C. (1998). The luckiest old folks in history, The Futurist, 32 (4), 48, 52.

Kaeter, M. (1995). Age-old myths, Training, 32 (1), 61-66.

Kang, J. & J. Hillery. (1998). Older salespeople's role in retail encounters, The Journal of Personal Selling and Sales Management, 18 (4), 39-53.

Landry, J. Human resources: What declines in job security? Harvard Business Review, 77(4), 22-23.

Leonard, B. (1999). Growing number of older workers stay on the job, HR Magazine, 44 (2), 28-29.

Mullin, T. (1998). Gray matters, Stores, 80 (3), 10-12.

Pave, I. (1991). Older workers face age-old problem, Business and Society Review, 77 (2), 26-31.

Peterson, R. (1996). An analysis of contemporary forecasting in small business, Journal of Business Forecasting, 15 (2), 10-12.

Schooler, C., M. Mesfin & S. Oates. (1999). The continuing effects of substantially complex work on the intellectual functioning of older workers, Psychology and Aging, 14 (3), 483-506.

Thackray, P. (1994). Life begins at forty, Management Accounting, 72 (3), 73-74.

Top five objectives to hiring senior executives. (1998). Association Management, 50 (13), 24-25.

U.S. Bureau of the Census. (1998). Current Population Reports P25-1099, Washington, D.C.: U.S. Government Printing Office.

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Robin T. Peterson, New Mexico State University

Table One

Proportion of Subjects' Workforces Comprised of Senior Citizens

Proportion of
Workforce Frequency

 Number Percent of Total

None 160 42.0% *
1-4.9% 49 12.9
5-9.9% 63 16.5 *
10-14.9% 33 8.7
15-19.9% 20 5.3
20-24.9% 31 8.1
25-29.9% 13 3.4
0.3 and over 12 3.1
 Total 381 100.0%

* Indicates a frequency that is significantly larger than the average
frequency for the column according to a Chi Square test at the .05
level.

Table Two

Perceived Advantages of Employing Older Persons

Advantage Number Percentage of Total

Self motivated 115 10.1% *
Disciplined 97 8.5 *
Dependable 88 7.7 *
Respect for authority 87 7.5 *
Mature behavior 79 6.9 *
Loyal to company 72 6.3 *
Experienced 72 6.3 *
Trained 68 5.9
Follow instructions 57 5.0
Work schedule is flexible 57 5.0
Responsible 57 5.0
Honest 53 4.6
Has credibility with customers 45 3.9
Few drug problems 45 3.9
Willing to train 39 3.3
Punctual 38 3.2
Limited family 37 3.2
High character 28 2.2
Other 17 1.5
 Total 1143 100.0%

* Indicates a proportion that is significantly larger than the average
proportion for the column, according to a Chi Square test at the
.05 level.

Table Three

Perceived Disadvantages of Employing Older Persons

 Percentage
Disadvantage Number of Total

Physical limitations 90 11.3% *
Less Productive 73 9.2 *
Not adaptable 71 9.0 *
Difficult to train 68 8.6 *
Administrative complexities 65 8.2 *
 in recruiting & hiring
Cost of medical benefits 61 7.7 *
Inflexible working hours 49 6.3
Do not relate to younger 46 5.8
 employees
Too slow 46 5.8
Illness 42 5.3
Will work only part time 41 5.2
Forgetful 40 5.0
Lack computer skills 36 4.5
Complain 31 3.9
Unsociable 21 2.6
Other 13 1.6
Total 793 100.0%

* Indicates a proportion that is significantly larger than the average
proportion for the column, according to a Chi Square test at the
.05 level.

Table Four

Forecasted Changes In the Employment of Older Persons

Estimate of Change Number Percentage of Total

Greater Percentage 192 50.4 *
About the Same 138 36.2 *
Smaller Percentage 21 5.5
Don't know 30 7.9

Total 381 100.0%

* Indicates a proportion that is significantly larger than the
average proportion for the column, according to a Chi Square
test at the .05 level.