Of the 3.5 million workers still missing from the labor market after the pandemic, about 2 million of them are older workers who “have simply retired,” the New York Times reported recently, citing a speech by Federal Reserve Chairman Jerome Powell. That’s a problem for short-staffed employers and the U.S. economy as well, since the stubborn labor shortage is part of what’s sparking inflation and interest rates.

What’s preventing employers from doing better at keeping older workers on the job? Attitudes about older workers may be part of the problem, driven by myths about the costs and benefits of hiring and retaining them. Among the myths: Older workers cost more than the value they provide. They use more benefits. They get sick more often. They get slower and weaker as they age.

Every one of those statements is a common assumption among many executives and hiring managers–and there is data to refute it all. Here’s why employers would benefit from building age diversity into their organizations:

Myth: Older workers are a money pit.

Fact: Increasing the number of over-50 workers by 10% can decrease turnover 4% and increase productivity by 1%, according to the Organization for Economic Cooperation and Development (OECD).

One common mistake is to focus on age rather than tenure, says Heather Tinsley-Fix, a senior advisor on financial resilience at AARP. Research shows that it’s smarter in the long term to hire people and keep them than to outsource them on a gig basis, or have a transient workforce with a lot of turnover. “It may be cheaper in the short term, but it harms overall performance as an organization,” she said. Tinsley-Fix cited a study that was commissioned by McDonald’s restaurants in Britain whose results showed that stores that had older workers among staff are more profitable. “The reasons managers gave is that older workers are more approachable and more dependable,” she said.

Research scientists including David Waldman of Arizona State University have cast a spotlight on anti-aging bias, finding that when employers use objective data to rate performance, the ratings improve with the age of the worker, and only when subjective data are used do you see a decline. Tinsley-Fix noted that older workers typically avoid errors that younger, newer employees may make. They are more resilient in hard times and add to diversity of ideas and the retention of intellectual capital. 

In practice, the myth of older workers being more likely to call in sick is one that doesn’t ring true for Susan Cornish, a Columbus, Ohio-based franchise owner of the Jovie childcare company. She says it is the older of her 150 workers who are less likely to take a day off with short notice. Workers in their 20s are more likely to create last-minute plans for occasions like spring break. 

As for using more benefits, Cornish said older workers don’t necessarily use more, but they tend to use different ones. Some don’t need health insurance because they are on Medicare, but they may be averse to driving in bad weather or at night, so a benefit that provides transportation reimbursement would be of interest. 

Myth: It’s cheaper to hire younger people because they earn less.

Facts: Longer tenure in an organization equates to greater productivity at the unit level. What’s more: Older workers can be better than younger workers at avoiding distractions.

The costs of turnover have been well-documented. Tinsley-Fix said it can cost employers as much as $30,000 per position to recruit, train, and get a new employee up to speed. That’s over and above the cost of their salary. The University of Minnesota open library book Human Resources Management lists the following direct costs related to turnover: 

•Recruitment of replacements

•Administrative hiring costs

•Lost productivity associated with the time between the loss of the employee and hiring of replacement

•Lost productivity due to a new employee learning the job

•Lost productivity associated with co-workers helping the new employee

•Costs of training

•Costs associated with the employee’s lack of motivation prior to leaving

The cost of losing an employee ranges between 25% and 200% of their salary, according to Keeping the People Who Keep You in Business, by Leigh Branham. Cornish said the average tenure of her workers over 50 is four years, compared to 210 days for her overall staff average. “Who does that make me want to hire?” she asked. 

Myth: Older workers have too many other priorities besides work.

Fact: People over 50 have the highest level of workplace engagement.

The OECD found that creating a truly multigenerational workforce helps get the best performance out of all your workers, and AARP data shows that engagement and belonging are higher in that kind of environment. “We surveyed a mix of employees from 18 to 60 and they said they enjoy their work more because of it,” said Tinsley-Fix. “Everyone has something to teach and something to learn. Knowledge spillover is tangible, and productivity is higher.” There is one priority that is may differ between older and younger workers. Eric Levitan, founder and CEO of the Atlanta-based fitness company Vivo,  said money is often less important to older workers. “We pay competitively, but they are often more mission driven than salary driven.”

Myth: My organization doesn’t see age.

Fact: Between 1997 and 2020, 20% of workers over 40 and 35% of those over 60 said they experienced age discrimination.

Ageism hits women earlier and harder than it hits men, according to the non-profit Catalyst, which advocates for women in the workplace. It can show up as older workers being pushed out, being the first to be laid off, or being less likely to get an interview or be hired. Once in a company, older workers are less likely to get top marks from a performance review. All of these tendencies can affect the bottom line. According to Tinsley-Fix, research shows that ageism costs companies 4% of net income. 

Research shows that age doesn’t effect job performance in a negative manner, and longer tenure has a positive impact. Older workers’ value exceeds the higher costs, and there is no tipping point at which age becomes a liability. In fact, for many older people, their collective experience can manifest in positive ways. The musician David Byrne, the Talking Heads co-founder who has experienced a surge of creative output in his later years, sought to explain the phenomenon as his 70th birthday approached last year. As he told the Guardian: “Over the years, I think my temperament has become more optimistic. I can, in some ways, convey that to an audience without telling them, without saying, ‘Be hopeful.’ I can show them. By what we do on stage, who we are and how we work together, they see evidence that things can be different.”

Editor’s note: From Day One thanks our partner AARP, who sponsored this story, the second in a three-part series.

Lisa Jaffe is a freelance writer who lives in Seattle with her son and a very needy rescue dog named Ellie Bee. She enjoys reading, long walks on the beach, and trying to get better at ceramics.