WASHINGTON – A new AARP study evaluates the business case for the recruitment, retention and engagement of older workers.  The findings reveal that the business case for workers age 50-plus has strengthened since the original report was published in 2005, and confirms that older workers are a critical component of a high-performance business.

“A Business Case for Workers Age 50+: A Look at the Value of Experience 2015” comes at a time when experienced workers are playing an increasing role in the workplace. In 2002, workers age 50 and older made up 24.6% of the workforce; by 2012, they were 32.3% and by 2022, they are projected to represent 35.4% of the total workforce.

The study addresses a misconception that older workers cost “significantly more” than younger workers, noting that adding older talent to the workforce “results in only minimal increases in…labor costs,” AARP found.  For one thing, the report notes that 90% of large employers now base pay in part on performance, rather than exclusively on tenure.

In addition, in terms of retirement costs, only 22% of large companies now offer a defined benefit pension plan, down dramatically from the 68% in 2004.

Looking at the 50-and-older segment of the workforce from a performance standpoint, older workers remain the most engaged age group.  The study states that 65% of workers age 55 and over are considered “engaged,” while younger employee engagement averages 58% to 60%. Although the generational differences in engagement might not seem large, “it takes only a 5% increase in engagement to achieve 3% incremental revenue growth.” In other words, a large company with $5 billion in revenue could achieve a $150 million revenue increase as a result of even a 5% engagement improvement, the study says.

AARP commissioned the study to assess the advantages of both retaining and attracting older workers. The report concludes: “An engaged older workforce can influence and enhance organizational productivity and generate improved business outcomes.”