Freefall @ Fifty

The generation gap has hit the workplace.

At 40, a Chemical Bank manager in New York feels he is finally in charge. Except when older people on his staff start to speak up. They are "like my father trying to tell me what to do," he says.

When the younger man was negotiating a contract with a customer, a 55-year-old underling interrupted and proposed different terms, making the boss look incompetent. Another time, on a business trip, the veteran berated him in front of other employees for driving the company car "too fast." Yet the older fellow has had trouble mastering a personal computer. "I find myself thinking, how can I replace him?" says the 40-year-old manager, who would speak to a reporter only on the condition that he not be named.

As America ages, older workers increasingly are perceived as a management problem -- rigid, hard to retrain and too expensive. Gray hair is expected in the executive suite but is becoming quite unfashionable in middle management and lower down in the ranks. Of course, the loss of older workers also means losing the contribution of people with experience and skills honed by years on the job.

"None of my clients ever ask for someone over 50," says Pat Cook, an executive recruiter at A.T. Kearney Co. who believes that "age discrimination is the workplace issue of the 1990s. Instead of a 50-year-old, employers want a 30-year-old who costs a lot less and doesn't give you any funny looks when you say `leap over the wall.'"

Corporate downsizings have sharply struck workers 50 and older, with many companies making heavy use of early retirement offers. Many older workers feel they must accept the offers, according to a recent University of Pennsylvania Wharton School study. Some 25% of workers aged 51 to 61 feel they have a 50-50 chance of being laid off without benefits within a year. And, according to the Bureau of Labor Statistics, only 17.7% of the work force has the last-hired, first-fired protections afforded by collective bargaining agreements.

Yet age-discrimination laws also make it difficult for managers to fire older workers with performance problems. Federal law protects workers 40 and older from bias in wages and benefits, hiring, firing and training, and also prohibits mandatory retirement in all but a handful of occupations.

The tensions are bound to escalate as older workers feel financial pressure to stay on the job longer -- and turn to the courts for protection. After rising less than 3% between 1979 and 1992, the number of U.S. workers 55 and older will increase 38% by 2005 -- more than either blacks or women, the Labor Department predicts. Moreover, age-bias suits have already surged 14% in the past two years, according to the Equal Employment Opportunity Commission.

Filing a lawsuit is what John Kolterman, 63, did after his boss told him he "wouldn't be able to adapt to the coming changes" and fired him from his job as assistant manager of a Wal-Mart store in Ruskin, Fla. The boss also fired the second-oldest assistant store manager, who was 52, on the same day, and told coworkers hours later "they were going to get some younger assistant managers that were go-getters," a former co-worker says in an affidavit in the case. Mr. Kolterman, who had helped open several Wal-Mart stores, had been described by previous bosses as a strong leader and had received high scores in management training and a recent raise in pay, according to documents he filed in a pending age-discrimination case in U.S. District Court in Tampa, Fla. Nevertheless, his supervisor frequently addressed him as "Pops" and "old man" on the job.

Many managers "aren't conscious that they're behaving in a discriminatory way. They just believe older workers can't do certain types of things, that they aren't as active or as vibrant," says Thomas Dickson, a Tampa, Fla., attorney for Mr. Kolterman. Wal-Mart Stores Inc. says it dismissed Mr. Kolterman "as part of a companywide reduction in work force at the assistant-manager level. All dismissals were based on individual past performance and no other reason."

Yet managers under pressure to do more with less say they are too stretched to be flexible. Thomas Enneking, who manages a group that processes the paying off of loans at a Dallas mortgage company, considers himself a patient boss and praises his older workers' reliability. But his patience wore thin when he tried to retrain one particular employee in his 60s.

The employee tried hard but couldn't remember details. After months of being "overly patient," Mr. Enneking says he finally persuaded the employee to take a different assignment. "I finally decided we can't afford to spend more time here," he says. "There's so much work to do. We're on deadlines. It's basically sink or swim, and you've got to get it right the first time."

Some older workers acknowledge they have neglected updating their skills. Io Oakes, the former head of interior design for a Boston architectural firm, was laid off at 50 because she lacked computer skills, she says. "When I got out of school in 1976, they weren't teaching" computer-assisted design or spreadsheets for project management, she says. And as the years wore on, she was successful in design work but "didn't put in the time" to learn about computers, she says.

Meanwhile, growing computer use by architectural firms was reducing support staff. If she had been able to do spreadsheets, she believes, she might have broadened her role at the firm and salvaged her job. But when her bosses made a 20% across-the-board staff cut two years ago, they "told me they couldn't afford to keep me," she says.

She has since beefed up her computer skills and started her own facilities-management firm. And the layoff taught her a lesson. "If you think you've adapted, you're done. You're already obsolete," she says. "Innovations are happening almost faster than the individual can adapt."

Often, however, the stumbling block for older workers isn't technology but psychology. "When an older, more experienced person has to report to a 35-year-old, there's bound to be friction," says Estelle Holzer, president of Diversity Consultants, an Oak Brook, Ill., training concern. "The younger boss says, `Is this going to be a pain in the neck? She's been around since I was in high school.'"

When Ms. Holzer, as a regional manager for an insurer, was assigned to work for a new regional vice president 12 years her junior, "I thought, oh, my God," she says. His intensity annoyed her, she admits. "He was more of a numbers person than I. He would come to my department and want to sit there from 8 a.m. to 8 p.m. going over numbers."

The two clashed when the vice president resisted her request for an assistant. She feared "he thought I couldn't handle it anymore, because I wasn't as young as some other people," she says. "I got pretty hot under the collar," although she later apologized for losing her temper.

Dozens of studies comparing younger and older people working full time at similar jobs show only minor actual differences in performance. While older workers typically take longer to learn a new task, when given enough time, they perform as well as younger adults do, studies show. Older workers are equally productive, less likely to change jobs or be absent, slightly more satisfied with their jobs and have a stronger work ethic than younger workers have, according to Harvey Sterns and Michael McDaniel, specialists in industrial gerontology at the University of Akron.

The view that older workers are a costly burden comes with its own price. More than half of 406 companies surveyed in 1991 by the Conference Board, a New York business-research group, said older workers are less flexible than their younger colleagues in taking new assignments. Yet companies that squeeze out veterans may suddenly find themselves a bit short on experience and maturity.

B&Q PLC, a chain of 280 hardware stores in Britain, discovered as much after suffering high turnover with its staff of young retail clerks. Pressured to solve the problem, B&Q five years ago decided to experiment with more-senior employees by staffing one store entirely with clerks who were 50 and older. These older workers soon proved themselves more productive and reliable.

Turnover at the store they staffed was one sixth that at comparable B&Q stores, the company found in a study conducted three years ago. Absenteeism was 39% lower. And inventory damage and theft were 59% less; older workers took better care of stock.

Moreover, the store outperformed other B&Q outlets, earning about 18% higher operating profits each year. One reason cited: the older workers were more attentive to the clientele. "Instead of just pointing down an aisle, they'll say to a customer `come have a look with me,' and then talk about how they've used something at home themselves," says Ray Baker, a B&Q training manager.

Today, about 11% of B&Q's 15,500 workers are 50 or older -- including one part-time clerk who is 80 -- up from just 1% to 2% five years ago. And the company hopes to increase that percentage to 15% in a few years. "They have all this life experience and can lead younger workers," says Mr. Baker.

Other companies have found that retraining older workers can revitalize careers. At Ceridian Corp., in Minneapolis, Robert Pedersen, 49, made a difficult switch from a 20-year career designing computer hardware to the faster-growing software business. With encouragement from his boss, he signed up for a televised class in a new programming language. Then, despite no experience, he was granted his request to work on a new software-testing project.

At first, he was barely keeping pace. "You have so many things that you've already learned that get in the way of what you're trying to learn," he says. After days at work when he couldn't even understand the terminology his co-workers were using, "I would go to bed at night and just sort of lie there, wondering if I was doing the right thing." A final boost from an informal mentor, Michael Marlin, a 56-year-old Ceridian software consultant who joined the project a couple of months after Mr. Pedersen, helped him over the hump.

But these programs are the exceptions. About 28% of 1,000 companies surveyed last year by the Society for Human Resource Management and the American Association of Retired Persons had programs aimed at integrating and retaining older workers. And many of the programs that do exist offer low-paying jobs with few benefits.

One much-publicized program by McDonald's Corp. in the 1980s, for instance, recruited unemployed older people who "needed help getting back into the work force," a spokeswoman says. Though the program, called "McMasters," did help some train for new jobs, most were flipping hamburgers for about $5 an hour.

"Some programs treat older people like substitute teenagers," says Joyce Welsh, vice president, age, work and retirement, for the National Council on the Aging, in Washington. "Not all older people are working just to keep busy. Some are working to live."

Older workers were underrepresented in training programs at a dozen New York employers surveyed by Joan Waring, an assistant vice president at Equitable Cos. They were discouraged from seeking training, Ms. Waring says, with messages like "would you really need this kind of thing? We'll offer another class later," or "What are you doing this for?"

Retiring at 50 or 55 isn't a possibility for most people. A study by the National Institute on Aging and the University of Michigan shows that 40% of workers 51 through 61 have earned no pensions for retirement other than Social Security. And they aren't old enough yet in most cases to collect that. Some 14% have no health insurance, and 20% no savings or real estate.

Furthermore, as corporate downsizings continue, "over the hill" is happening a lot younger. Some employees have seen their status switch almost overnight from up-and-comer to unwanted. "Traditionally the 40s were an intermediate period when people hit their stride and their attractiveness to the company peaked," says Stephine Wells, a Sausalito, Calif., employment-discrimination attorney. "But now I'm seeing a pattern of the 40s being a real dangerous period."

Frank Dunnigan, who is 42, had worked at Macy's in San Francisco for 22 years and had risen to the rank of store superintendent when a new, 31-year-old store manager started excluding him from memos and weekly management meetings, Mr. Dunnigan maintains. "I was told, `There's no need for you to attend,'" he says. Soon, other managers started coming to work in jeans and T-shirts, leaving Mr. Dunnigan feeling out of it in his suit and tie. Sometimes, he says, his casually dressed comanagers would call on him to meet with irate customers because he was the only one dressed for it.

When an assistant store manager started closing every staff meeting with, "OK, boys and girls, let's rock-and-roll!" Mr. Dunnigan got nervous. "Those of us over 40 thought it was a pretty bizarre way for a senior executive to end a staff meeting," he says. "But `trendy' was the operative word. Everything was young and trendy."

Mr. Dunnigan says that another manager remarked casually, "We just have to get some younger blood in here." When Mr. Dunnigan reproached her, "she said `You know what I mean-younger thinking.'" The new managers, he adds, "honestly believe that they have a moral mission -- some calling from above to rid the company of `deadwood.'"

Mr. Dunnigan believes his performance was good. An idea he and his assistant offered to change store hours contributed to a sales increase, he says. But he was laid off early this year as part of a downsizing that he claims has reduced 40-and-over executives in Macy's San Francisco store to 4% from 28% in early 1993. "There is a very clear process of exclusion going on," says Mr. Dunnigan. R.H. Macy & Co. declines to comment on any aspect of Mr. Dunnigan's employment.

Even the 40-year-old Chemical Bank manager who would like to replace his older staffers worries that he is "on the fringe. I know I'll be one of them soon and I ask myself `What do I need to do to remain contemporary?' I drink Dewar's and I have since I was 18. But when I go out with my younger staffers, there are eight glasses of wine on the table and just one Dewar's."