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IBM Searches-and-Replaces Older Workers—Are Millennials Next?

Employers of all types indulge in the practice of terminating, laying off, or otherwise replacing their older workers with a younger workforce. Respectful Exits exists to challenge these practices of discarding those who want, need and can continue to contribute and earn. Simply put, we call for an end to the outmoded notion of a 65 “sell-by” date and the strengthening of extended work and flexible paths to retirement.

Typically these “premature retirement” methods occur out of sight or below the conventional radar. But a new piece from ProPublica, Cutting ‘Old Heads’ at IBM, brings such a practice—by a legendary company, no less—into full and disturbing view. The article suggests that IBM’s strategy for assuring competitiveness in the more youthful tech era has been to systematically replace its older workers with millennials, and accuses the company of persistent and blatant age discrimination. No doubt IBM is not alone amongst its peers in discriminating against its long-serving and legendarily loyal “family members,” but the degree to which these practices have allegedly occurred is shocking.

Interviews throughout the piece feature veteran IBMers who believe they were discarded not because of an inability to perform and add value, but because they don’t fit an age-obsessed profile that seems based far more on mythology than demonstrated reality. The company’s creative tactics for removal ranged from revising their performance review process in order to facilitate unusually early retirements to banning telecommuting in a specific effort to disadvantage older remote workers.

Many assumptions about the value of younger vs. older workers are just that

Aside from the seeming disregard shown to committed, long-term employees, more striking are the not-so-hidden assumptions about work and workers that are apparently driving IBM’s actions. For a company that has repeatedly claimed over the years to be strategically “flexible”, the mechanical, zero-sum thinking revealed in this ageist approach flies in the face of post-industrial, 21st century organizational best practices. A few examples of this underlying flawed logic stand out:

Myth:  Older workers are uncomfortable with and can’t adapt to new technologies.
Reality:  Seasoned workers who have integrated a range of new technologies for decades are equally or more capable of adapting innovation into complex organizations compared to less patient and seasoned users of “perfect” technologies.

Myth:  You need to clear out older workers to make room for millennials.
Reality: This “limited pie” argument rests on the long-discredited “lump of labor” theory that employment and its effect on the larger economy is a zero-sum game. Extending older worker employment adds to an economy that supports all.

Myth: Older workers are “more expensive” than new hires.
Reality: Setting aside their greater value of accumulated skills, experience, and organizational know-how, an Institute of Electrical and Electronics Engineers study shows that older workers also have half the turnover rate (and expensive replacement costs) and show better attendance levels and use fewer sick days than younger workers, among other cost differences.

Warning to Millennials: the faster tech evolves, the earlier your “sell-by” date may be

Perhaps the most chilling assumption in this apparent IBM strategy is that the skills, knowledge, and utility of tech workers – and presumably other kinds of workers, from marketing to field support – quickly become outdated and must be replaced by the next cohort of “digital natives.” Following this logic, today’s twenty-something tech-savvy new hires may have a shelf-life of twenty years or less, rather than the longer run today’s discards have had. How should they be preparing for a retirement that spans 40 to 50 years?

Clearly deeper, more creative thinking is called for.

Companies must adapt to the new longevity, or risk extinction themselves

It’s time to re-examine the career lifecycle and employer responsibility for adapting to the new longevity of today’s workforce. Robust strategies for true lifelong and career-long development are required to avoid the neglectful obsolescence that currently characterizes the workplace. If you stop training people in their 40s, their skills will atrophy until they tend to become “under-skilled and over-paid” in their late 50s.

There are surely challenges in productively integrating a large cohort of newer workers with a pre-retiree population. But there are ways to address this challenge by thinking outside of the box. In my most recent Leading through Mutual Respect blog, I outline creative solutions that companies confronting comparable challenges have developed to meet competing demands. One example is hospitals pursuing a blend of job sharing and phased retirement schedules, allowing older RNs in demanding roles to ease into retirement while offering intensive mentoring and upskilling to new nurses. An imaginative tech company could do the same.

To understand the IBM story more fully and dramatically, don’t miss the accompanying 6-minute video that offers a summary (watch below). To hear directly from IBMers whose jobs were and continue to be eliminated, visit their Facebook page, Watching IBM.

2018-05-15T13:20:16+00:00 April 30th, 2018|0 Comments

About the Author:

Paul Rupert
Paul Rupert is Chief Executive Officer of Respecful Exits. Paul has forty-five years of nonprofit management and consulting experience. He founded and managed innovative nonprofits in healthcare, legal services, mediation, publishing and advocacy campaigns. He played a pivotal role in promoting the practice of flexible scheduling and staffing throughout the economy. His firm Rupert Organizational Design has consulted to more than a hundred companies implementing creative flexible staffing and scheduling initiatives. His firm currently leads in the development of flexible and phased retirement programs.

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