More than 50% of older workers pushed out of work

[Spanky]

Is anyone really shocked?

definitely not.

The generational war will only become more pronounced over the next 10-20 years. Age discrimination will only increase when those now under 30 become decision makers in the next couple of decades.

It is NOT something for which to look forward.

 

[Lakewood90712]

I was filling out an online application at a megacorp, and it wanted last 7 years of experience. I retired in 2015, but my relevant experience for this position ended in 2000 with employer long ago. ( Skills of the 2000 job are still 100 % relevant to this open position).

The skill sets from the 2000 job and the job I retired from are quite different.

Have not completed and submitted. This gets kind of thorny , as it reveals age of applicant. I may just submit and see what happens.

 

[Lewis Clark]

Maybe. I don't know the law well enough to say, but it seems like a stretch. If the motive is pay/profit not age, then how do you establish that the motive is age? They'd also have to demonstrate that no other issues were involved. I'm sure it would depend on the specific situation.

Assume the honest motive is to force out the highly paid staff to cut costs, and not to force out the older employees who happen to have the high salaries/wages.

If the majority of the highly paid staff are over 40 years old, this should still be illegal due to the disparate impact on the protected class of employees over 40.

 

[Dtail]

Assume the honest motive is to force out the highly paid staff to cut costs, and not to force out the older employees who happen to have the high salaries/wages.

If the majority of the highly paid staff are over 40 years old, this should still be illegal due to the disparate impact on the protected class of employees over 40.

Many places during the RIF, make sure there is a mix of over 40 and under 40 y.o. employees.

 

[Music Lover]

I buddy of mine is still there at 60, with an obsolete skill set. Despite 30 years of generous contributions to the profit sharing, he has nothing saved. Plans on working till he's 70 and taking SS. I sincerely hope he's ok.

There are a lot of people on this site who are living quite comfortably on the equivalent of 40 years of SS contributions taken at age 70. Your friend has 10 years to lower his expenses and save for retirement. He could be a lot worse off than he is...

 

[Which Roger]

Many places during the RIF, make sure there is a mix of over 40 and under 40 y.o. employees.

During all of the (frequent and recurring) RIFs in my MegaCorp, they were very careful to audit the list of effected employees every which way - by age, sex, race, etc. Of course they did this not out of the goodness of their hearts, but because the lawyers told them it would avoid lawsuits.

But the audits were only meaningful because hundreds or thousands of employees were being RIF'd at the same time. In a small company, the sample size would be too small to get meaningful data.

 

[Lewis Clark]

Many places during the RIF, make sure there is a mix of over 40 and under 40 y.o. employees.

True.

But there are also many places that offer separation packages to the older folks willing to sign non-litigation agreements. So the employers essentially pay off their victims and get away with illegal behavior.

 

[Dtail]

True.

But there are also many places that offer separation packages to the older folks willing to sign non-litigation agreements. So the employers essentially pay off their victims and get away with illegal behavior.

Well effectively I was one of those guys although voluntarily. Got 1 year of salary and benefits.
The alternative was to be eventually RIF'd with a most likely lesser package.

 

[ER Eddie]

I'm sure it depends on the field, too. In some fields (e.g., IT), youth may be more a premium and age more a liability. In my field (healthcare), being older is usually seen as a sign of wisdom and experience. At least that's what I tell myself.

 

[brett]

It is not just salary. The firm that I worked for took into consideration things like vacation entitlement, cost of benefits for the older employee, absenteeism due to ill health, stock options and restricted offerings, and the higher cost of DB (and the ongoing liability) as the employee ages toward their retirement date.

I was told by a senior person in HR that HR consultancy firms such as Towers, etc actually offer a service to employers that can identify the sum total of these costs today and over the next few years on an individual employee basis. Not certain if this is true or not since it was not first hand.

 

[JP.mpls]

I have worked for a medium sized corp for 30 years. It was a family run company with a very strong reputation for doing right by their employees when I first started working there.
At some point the president retired, and the new CEO made the company a public company on the NY stock exchange. Out with old management. Lots of new guys, and their buddies from the last corporation that they "helped".

The flood gates opened, and the layoffs began.
- First some lower performers to keep the company lean.
- Then a large batch of good performing older employees with a scattering of younger employees to make it legal.
- Recently they shutdown a plant in a different location. This included many younger employees. They decided to take advantage of this situation by legally purged 30-40% of the over 55 employees at the locations in my state. Many of these older people were excellent long time employees, but they didn't care, out they went.

I realize anyone can be replaced, but the last batch of workers knew what they were doing, and a large amount of what I would call "native" knowledge walked out the door with them. All sorts of problems and screw ups are happening, but I guess that doesn't matter. Money was saved. The new workers will figure it out at some point.

If there ever was a reason to make FIRE plans, this kind of corporate BS is a good incentive. I will be part of the FIRE class of 2019. I'm sure glad I don't have to try surviving in this environment for another 15-20 years.

Take care, JP

 

[RetireAge50]

One you are 50 you are washed up and should get the f out. Go enjoy yourself and your 3% withdrawal rate.

 

[JP.mpls]

RetiredAge50,
I qualify to buy good medical insurance through the company at a fairly reasonable rate when I turn 60 this spring.

The HR department purged this benefit for new employees, but they surprisingly didn't eliminate this benefit for existing worker (yet).

I'm out in the spring. Not really RE compared to you, but close enough.
Take care, JP

 

[Luck_Club]

Companies always want young blood.

I've been on the revenue side of things my entire career, and only get paid a % of what I sell. Never had a salary or benefits package to cloudy the picture. Still even in my world I've seen it many times; retiring the old guys. They still hunt and take down the big game with ease, but the younger shinier model is always better in management's eyes.

For the "COGGS" in the machine it is just bloody murder. Freshly minted usually has the cognitive ability to do the job, and they command half the price.

 

[FreeBear]

I have worked for a medium sized corp for 30 years. It was a family run company with a very strong reputation for doing right by their employees when I first started working there.
At some point the president retired, and the new CEO made the company a public company on the NY stock exchange. Out with old management. Lots of new guys, and their buddies from the last corporation that they "helped".

The flood gates opened, and the layoffs began.
- First some lower performers to keep the company lean.
- Then a large batch of good performing older employees with a scattering of younger employees to make it legal.
- Recently they shutdown a plant in a different location. This included many younger employees. They decided to take advantage of this situation by legally purged 30-40% of the over 55 employees at the locations in my state. Many of these older people were excellent long time employees, but they didn't care, out they went.

I realize anyone can be replaced, but the last batch of workers knew what they were doing, and a large amount of what I would call "native" knowledge walked out the door with them. All sorts of problems and screw ups are happening, but I guess that doesn't matter. Money was saved. The new workers will figure it out at some point.

If there ever was a reason to make FIRE plans, this kind of corporate BS is a good incentive. I will be part of the FIRE class of 2019. I'm sure glad I don't have to try surviving in this environment for another 15-20 years.

Take care, JP

JP, sounds like where I used to w*rk!


Honestly, I'm not at all bitter. They paid me well, but I ate a fair amount of crap the last several years. I learned early in my career how the game plays out. In fact I was hired out of college to replace a much more experience professional ran into political trouble with his boss, my eventual boss. Within 5 years, this mini-tech offshored half of it's manufacturing. All of manufacturing and large chunks of engineering followed within a decade, but I had been planning an escape from the beginning.


I'm surprised more folks haven't mentioned job offshoring in tech and IT. Whole departments and buildings moved overseas, just like Mega-motors at the beginning of my career. Seeing this a second time, I knew what was coming now that I was no longer the young wonder kid, but was just a burned out techie.

 

[LastOfTheBoomers]

Interesting article - many thoughts come to mind - mainly you should look for a job before you need one - speaking for myself after years at the same company you get comfortable- rejoice that you have 4 weeks of vacation- a nice commute- if you want to keep working - if a recruiter calls go for it.
Keep your skills current- my company brought in SAP - I asked for volunteers to go to training- it was like pulling teeth- It was the young guy that went - I tried to get the mainframe guy to go but he wasn’t interested.
The alternative to this is what I did, and most people here did - save a lot and laugh as you leave!

 

[JPatrick]

Yep. Especially those of us who overeat during the holidays.

Exactly why our belts have so many of those little holes.

 

[nhcycling]

Recently the Megacorp I work for did a RIF and a buyout for 58 and older/10 years of service. Many that had not kept their skill sets updated were worried about being RIF’d and took the buyout reluctantly. They’re not likely to find technical work that pays well. You’ve got to stay current. Though I do feel bad for the ones that were ‘forced’ out, they didn’t spend the many nights/weekends keeping up, taking challenging assignments, taking training classes, putting in extra time to learn that others like myself had done through the years.

 

[CRLLS]

It is not just salary. The firm that I worked for took into consideration things like vacation entitlement, cost of benefits for the older employee, absenteeism due to ill health, stock options and restricted offerings, and the higher cost of DB (and the ongoing liability) as the employee ages toward their retirement date.

I was told by a senior person in HR that HR consultancy firms such as Towers, etc actually offer a service to employers that can identify the sum total of these costs today and over the next few years on an individual employee basis. Not certain if this is true or not since it was not first hand.

I know this is the case. At least that was my suspicion over the years.

So what you are essentially saying is that these "benefits" for being a valued employee over the years (higher earned vacation, stock incentives, promotions, etc) sets one up for being RIF'ed earlier than a person that hadn't been granted such rewards. Quite the turn about in the 3rd act!

 

[Clone]

I think there is also an element of how many $ are being offered for decent jobs. We are looking for someone to run a teaching lab. Job requires a 4 year degree of some type, with some work experience. Some basic manufacturing or engineering lab type background would be great. Full benefits. Job security for as long as they want the job and keep their nose clean. Perfect job for someone looking for a second career, low stress type job. $60K per year. We are getting lots of folks that are trying to get a green card. A number of these are post-docs.



I suspect that most folks that are 50+ are not interested in that type of money. So there are jobs better than minimum wage with crappy benefits. But perhaps not $100K+ jobs.

 

[brett]

My megacorp employer eliminated a level of management. I was impacted I was delighted and was ready for it. Right down to having a recommended lawyer lined up to negotiate the settlement.

The trick is to always be ready for it and not be complacent. Always keep the resume, the contacts, skills, and especially those interview skills up to snuff. The employees that I have seen the worst impacted were the ones that thought that it could never happen to them.

Anyone who thinks it cannot happen to them is living on a different planet. It surely can!

 

[mcbraemer]

IT and Offshoring

To reply to the earlier post about rampant offshoring in the IT field ... you are spot on. I lived through both an acquisition of my IT centric employer company by a Megacorp, followed by a spinoff of our business unit to Megacorp B. Before, during and after the multiple phases of downsizing and offshoring chaos, I looked up and at age 59 was amazed that I had survived. Meantime, I saw many many co-workers forced to train their offshore replacements to do their jobs, tolerated by most only to get the paltry "separation bonus". Also as a group manager I was forced to hire IT temp workers here on work visas, because they were cheap to hire and more easily tossed aside when projects completed. I left voluntarily last year at 63.5 age with a bad taste for this type of business.

 

[Bongleur]

the higher cost of db (and the ongoing liability)

Db

 

[Sunset]

At Megacorp the older, better compensates workers were replaced by people in other countries working for 20 cents on the dollar.

Yes, at one place I worked, they replace me with 6 offshore folks, and I had to supervise their performance for 1 month before leaving.

The 6 of them failed to follow a detailed design plan, missing key points in the design, which I had to point out to them.

Our team lead re-wrote the 6 folks code in 2 days before the build.

I'm sure the Accountants at Mega were happy as they only see the salary expense, not the cost in failed software.

 

[meleana]

This happened to me and some others, but it was not done outright. We were pushed little by little to force us to quit by new management with a sociopath director. Especially small companies- they don't want to pay unemployment claims so they force you to quit instead of firing you. They also don't want any age discrimination lawsuits.


They think you are dead wood and they also look to get rid of you because your salary is higher than bringing in a young one.

I had 3 more years to go until age 65. Ironically my younger replacement only lasted 3 weeks because she could not deal with the jerk in charge and then the idiot had the nerve to call me because he wanted me to come back. Realized after 13 years I had developed an excellent relationship with their clients.


After 13 years there, I left with nothing but my small 401k which was tanking just as I left and had it transferred (after much headache with this company) to my own IRA. No pension, No severance- which they wouldn't have given even if they let me go instead of me resigning. Not the 6 remaining PTO days for the year.No unemployment. Zilch.

Oh, well. I am not going back ever and doubt I will ever work again except maybe per diem. All these companies stink and I have had a lot of jobs in my lifetime.

I might add I was a cheap employee. Had to use my own car in the field as my job involved driving all day. I went through several cars. I was on my husband's health insurance- so they didn't have to pay towards that. They only had 6 holidays per year. They capped my- and others-mid 5 figure salary years ago and took away my yearly incentive bonus plan just a few years after I started. They took away 5 PTO days permanently and capped them. (we had no sick time- it was all bundled as PTO time. (I only called in sick twice in 13 years there). Just a few years ago when I started to take a 2 consecutive week vacation they were actually told me they frowned upon employees taking 2 weeks off in a row! I did not stand for that one! They used me as a courier also to run their errands.

They cut the lunch hour for everyone from 1 hour to 1/2 hour. We used to joke that soon they will make us work for free!

And that was the OLD management- before the Terminator came in!


I don't know how i even held on for the 7 months after the new management started there this past February. I really tried but I just couldn't even make it through the last 3 months of this year- so Sept 21st was my last day.