This study investigated small business hiring of senior citizens. It found that older persons make up a moderate percentage of  the small business work force. The respondents reported dependability, possession of the work ethic, respect for authority, experience, and company loyalty as advantages of seniors. The major disadvantages were physical limitations, illness, slow work, and costs of medical benefits. Most respondents plan to hire larger numbers of seniors in future periods

Peterson, Robin T.

Stratemeyer, Andreas W.

English

Middle Tennessee State University: Journals@MTSU

STRA TEGFAN ANALYSIS OF SMALL BUSINESS HIRING OF SENIORSRobin T. PetersonAndreas W. StratemeyerNew Mexico State UniversityABSTRACTThis study investigated small business hiring ofsenior citizens. lt found that older persons makeup a moderate percentage of the small business work force. The respondents reporteddependability, possession of the work ethic, respect for authority, experience, and companyloyalty as advantages ofseniors. The mjaor disadvantages were physical limitations illness, slowwork, and costs ofmedical benefits. Most respondents plan to hire larger numbers ofseniors infuture periods.INTRODUCTIONThe United States population is steadily growing older and many small and large companies arefinding profitable markets in the senior citizen segment (Peterson, 1995).They are discoveringthat older consumers represent a desirable target market (Lee, 1997; Wolfe, 1994).By the sametoken, they are finding that seniors are becoming an increasingly important component of thelabor force (Gayle, 1990).Advances in medical care, exercise habits, and eating patterns have led to a situation where thereare large numbers of older persons, many of whom enjoy superior mental and physical healththan their predecessors (Wolfe, 1994).Many of these individuals like the idea of extending theirworking lives beyond normal retirement ages, either in a full or part time capacity.Seniors do not always experience success in obtaining jobs. In fact, some find that managers arereluctant to hire them. It is possible that United States cultural attitudes and norms may accountfor some of the neglect of older individuals as potential employees. Seniors in the United Statesdo not enjoy the status that they do in many other societies. In this country seniors are ottenperceived as lacking mental and physical competence, status, and power (Kluckhohn,1987).Hiring decisions may be mirroring this cultural norm, whether or not it is accurate.Firms can sometimes benefit, of course, because seniors will often accept employment at lowerwages than younger workers. This allows the firm to obtain valuable expertise, at a lower cost.39Journal ofSmall Business Strategy Volume 9, No. l Spring /998It is possible, of course, that small businesses avoid hiring older persons because of perceivedweaknesses of these individuals as participants in the labor force. Some managers may havediscovered or believe for other reasons that seniors are not physically or mentally able to carryon duties as ably as younger persons. Medical and insurance costs may be substantial for theelderly. They may lack critical computer skills or insist upon inflexible hours. One of thepurposes of this study was to uncover views of small business managers regarding these andother possible shortcomings of older individuals as employees.Specifically, the current study was undertaken to address four objectives:1. To measure the degree to which small firms in the United States hire seniors.2. To ascertain the advantages which small firms perceive in older employees.3. To determine the problems which small companies perceive in including older workerson the payroll.4. To derive estimates by small firm managers as to anticipated hiring of seniors in the future.THE STUDYThe researcher mailed 20 questionnaires to a randomly-chosen set of 50 college and universitySmall Business Institute directors located in 50 states. Therefore, the total number ofquestionnaires mailed was 1,000 (50 x 20). The geographic dispersion of the sample wasundertaken in order to produce results that were reasonably representative of the population ofsmall businesses at large. Accompanying the questionnaires was a letter explaining the purposeof the study and asking that the SBI director distribute the questionnaires to 20 past and presentSBI clients and to collect the questionnaires once they were completed and forward them backto the researcher. Follow-up letters were sent to non-respondents.The effort yielded a sample size of 368 usable returned questionnaires-aresponse rate of 36.8%.The questionnaires had previously been pretested on a sample of 20 small business managerslocated in the city where the researcher worked. Since the managers making up the final samplewere all past or present SBI clients, they satisfied the requirements for classification as a smallbusiness, according to the criteria set forth by the small business administration.The respondents were asked if they hired seniors (defined as individuals 65 years of age andolder) and, if they did, for the proportion of the work force that were seniors. They were alsoasked for perceived (A) advantages and (B)disadvantages of hiring older workers. Further, theywere requested to forecast if they would hire more or less or about the same proportion of seniorsin the future as they had to date. Demographic data (sales revenues and industry specification)were also solicited.The respondents were asked to specify their 1995 sales revenues. The median figure was$643,200, reflecting the fact that the study focused only upon small firms. Since the surveycovered only small business, its findings and conclusions cannot be extended to encompass theentire universe of firms.RESEARCH RESULTSThe industry makeup of the sample was examined. Table I sets forth the results. Retailing makesup the largest grouping, followed by manufacturing, service, wholesaling, and "other" category.In this case, the percentage of service firms was lower than is sometimes encountered in studies40Journal ofSmall Business Strategy Volume 9, No. I Spring /998of small business. Chi Square tests were employed for Table I and the following tables, sincecomparisons between frequencies were sought. The Chi Square tests indicate cases wherefrequencies exceed those of others. In all cases, .05 levels of significance were employed.Table IIndust Com osition Of The Sam leIndustrn~Fre uencN s ~PTManufacturing 85 23./uIVholesaling 22 6.0Retailing /89 5/.4'ervice43 I/.6Other 29 7.9Total 368 /000%sSigniftes a frequency that is significantly larger than the column frequency, according to aChi-Square test at the .05 level.The questionnaire asked the respondents if their companies hired senior citizens. The resultsappear in Table 2. By far the greatest percentage is in the "none" category, followed by the I-4.9% and the 5-9.9%groupings. It is evident that most work forces contain a relatively smallproportion of older workers. In contrast, over eleven percent of the U.S. population is of age 65and older.Table 2Percenta e of Res ondents'orkforces Made U of SeniorsPercenta e of Workforce ~Fre uencN s p~ufNone /68 45. 7ul-4 9% 84 22.8u5-9.9% 48 l3. IIO-/4. 9% 36 9.7/5-/9. 9% 22 6.020% and over /0 27Total 368 /00. 0%*Signifies a frequency that is significantly larger than the average frequency for the columnaccording to a Chi-Square test at the .05 level.41Journal ofSmall Business Strategy Volume 9, No. I Spring i998The members of the sample were asked to specify the advantages of employing seniors, basedupon their experience. Table 3 sets forth the frequencies associated with each category ofresponse. The total frequencies exceed the sample size, because most respondents cited more thanone advantage.Those advantages which received the greatest frequencies were that seniors were dependable,possessed the work ethic, respected authority, were experienced, and were loyal to the company.Other important advantages were flexible schedules, mature behavior, stability, punctuality, andwillingness to train. Less frequently reported were responsibility, honesty, character, customerorientation, trustworthiness, and limited family.As the columns in the table indicate, there are some differences between industries. In retailing,for example, the work ethic was reported more frequently than dependability. The reverse is truein the other industries examined. The "experience" advantage received more frequencies thanrespect for authority in retailing and in the "Other" industry. In manufacturing and service,however, respect for authority was mentioned more oflen. A flexible schedule was reported asan advantage by a large number of retailers. These differences between industries reflect desiredcharacteristics and behaviors of employees in these industries, as well as the performance ofseniors in these roles.Further, the differences between industries suggest different rationale for hiring older persons,from one industry to another. A retailer who sought to employ those with the work ethic mightbe especially highly motivated to hire seniors, for example. Conversely, a service firm desiringdependable employees might find seniors to be especially useful.When the data in Table 3 are converted from frequencies to ranks (based upon the number offrequencies in each cell), it is possible to measure the degree to which the respondents in the fivesmail business industries agreed upon the importance of particular advantages. With ranked data,it is possible to perform a Kendall Coefficient of Concordance test, designed to assess the degreeto which members of a set of (m) distinct ranks offerings of (n) things tend to be similar.Basically, this indicates the extent to which the rankings agree with each other. The coefficientwhich was computed in this case was .79.This indicates a high degree of concordance betweenthe industries, since the variance of the rank sums is 79 percent of the maximum possible.Table 4 presents the disadvantages of hiring seniors which the respondents reported. In terms ofraw numbers, the advantages outweigh the disadvantages-sixteen advantages and twelvedisadvantages were cited. Further the frequencies associated with the advantages were 1,476,while those mentioned for disadvantages were 381, furnishing some evidence that smallbusinesses are satisfied with the performance of these individuals. Disadvantages which havefrequencies significantly higher than those in their columns, according to Chi Square tests at the.05 level of significance are labeled with asterisks.For the sample at large, the significant disadvantages are physical limitations, illness, "too slow",and cost of medical benefits. Other frequently-mentioned disadvantages were diflicult to train,opinionated, forgetful, and "only part time". Finally, some respondents mentioned inflexiblehours, unsociable, complain, lack computer skills, and other topics.42Table 3Industry g~ORetail Manufacturing Service Wholesale Other Totalhdxantgge Number % ivumber % Number % Number % IVumber % ivumberDependable 74 /0.4'6 12.6'6 14.9' l 11.5'2 /0. I v 169 I l.5*Work ethic 82 11.5'3 I /.8' 4.6 7 7.3 6 5.0 146 10.0vRespect for authority 54 7.6v 37 10.2v 12 6.9 13 /3.5v /6 /3,4v 132 9 OvExperienced 56 7.9'6 9.9'2 6.9 9 9.4'8 15.1'31 8.9vLoyal to company 68 9.5" 27 7.4 /5 8.5v ll I/.5v 8 6.7* 129 8.8*Scheduleis flexibl 65 9.1v 22 6.0 15 8.5v 4 4.2 5 4.2v III 7.5w Mature behavior 51 72 24 66 13 7.4v 9 94 10 84v /07 73Stable 50 7.0 23 6.3 /I 6.3 7 7.3 6 5.0 97 6.6Punctual 38 5.2 2/ 5.9 9 5./ 6 6.2 9 7.6 83 5.7Willing to train 3/ 4.4 22 6.0 8 4.6 7 7.3 8 6.7 76 5.2Responsible 26 3.7 /7 4.7 8 4.6 5 5.2 5 4.2 61 4.2Honest 34 4.8 9 2.5 9 5./ 3 3.1 2 1.7 57 3.9High character /8 2.5 /6 4.4 7 4.0 I 1.0 4 3.4 46 3.2 4!Customer oriented 22 3.I 4 l. I 8 4.6 I l.0 3 2.5 38 2.6Trustworthy 19 2.7 6 1.6 7 4.0 0 0.0 3 2.5 35 2.4Limited family 17 2.4 6 /.6 5 2.9 2 2.1 3 2.5 33 2.2Other 7 1.0 5 /.4 2 /. I 0 0.0 I 0.8 15 1.0Total 712 100.0 364 100.0 175 100.0 96 /00.0 119 100.0 1466 100.0*Signifies a proportion that is significantly greater than the average proportion for the row,according to a Chi-Square test at the .05 levelTable 4.O0IndustryRetail Manufacturing Service Wholesale Other Total9lsttdy/tntttge iVumber % ivumber % Number % Number % Number % NumberPhysical limitations 24 14.5a 23 19.8a 5 I i. Iv 4 Il. /v 7 2/.2'3 /5.9v toillness 32 19.3a ll 95v 7 /5.7* 6 lb.7a 2 6.1 58 /4.6*Too slow 19 11.4a 16 13.7' 178' /4.0' 3.0 4912.5'ostofmedical benefits /4 8.5a 16 /3.7v 2 4.4 4 II. /e 6 /8.3v 42 10.7aDificult to trai n 9 5.4 14 /2.1' 13.3' 5.6 4 12.1'5 8.8Opinionated 20 /2.1' 5.2 2 4.4 2 5.6 5 15.1'5 8.8Forgetful /3 7.8 8 6.9 5 II.l' 8.3 3 9.2'2 8.1Only part time II 6.6 9 7.8 4 8.9' 16.7v I 3.0 31 7.8Inflexible hours 7 4.2 6 5.2 4 8.9' 0.0 I 3.0 18 4.5Unsociable 4 2.4 3 2.6 0 0.0 3 8.3 I 3.0 /I 2.8Complain 3 /.8 0 0.0 I 2.2 I 2.8 I 3.0 6 1.5Lack computer skills 3 1.8 i 0.9 0 0.0 0 0.0 0 0.0 4 L0Other 7 42 3 26 I 22 0 00 I 30 /2 30 e+Total 166 100 116 100 45 100 36 100 33 100 396 100'Signifies a proportion that is significantly greater than the average proportion for the row,according to a Chi-Square test at the .05 levelJournal ofSmall Business Strategy Volume 9, No. l Spring /998The disadvantages for each industry that have frequencies significantly larger than their columns,according to Chi Square tests of frequencies at the .05 level are identified with asterisks. TheKendall Coefficient of Concordance for the disadvantages was .73, slightly less than that foradvantages, but still substantial.There were some interesting differences between industry categories. For instance, manufacturersand "others" found seniors difficult to train, while retail, service, and wholesale firms did not.Retail and other companies reported "opinionated" as a significant disadvantage, while the othercategories did not. "Other" was the only industry citing significant numbers in the forgetfulcategory. Service and wholesale companies found that only part time was a significantdisadvantage. Finally, only service firms found inflexible hours to be a significant disadvantage.The respondents were requested to specify if they planned to hire different percentages ofseniors in their work forces in the future than they had in the past. Fifly two percent indicated thatthey did plan to hire a larger percentage, thirty eight percent that they planned to hire about thesame percentage, four percent that they planned to hire a smaller percentage, and six percent thatthey did not know.DISCUSSIONThis study was designed to measure the degree to which a sample of small firm managers hiredsenior citizens, their perceived advantages and disadvantages of hiring these individuals, andtheir future employment plans for seniors. Many sample members hire seniors, although thepercentage of the work force is moderate. When queried about advantages, the members of thesample set forth a number of these, emphasizing dependability, the work ethic, respectingauthority, experience, and loyalty to the company. There was substantial agreement amongindustries on the ranking of the importance of the advantages.The major disadvantage mentioned by the sample was physical limitations, followed by illness,being too slow, and the cost of medical benefits. As in the case of advantages, concordancebetween industries was high. Finally, a large proportion of the sample plan to hire largerpercentages of their work force from the senior group in the future.IMPLICATIONSCertain implications for small business managers emerge from this study. It appears that thesecompanies should experience a number of advantages, as well as some disadvantages, as aconsequence of hiring the elderly. They can be expected to hire even larger numbers in the futurethan they have in the past. For some this will mean continuing to use current employees pastnormal retirement ages. For others it will mean recruiting new employees from the ranks of theelderly.The large number of advantages set forth by the respondents suggests that small businesses whoare not recruiting and retaining seniors may be failing to take advantage of a high potential poolof managerial and operative talent. This is particularly the case for those small businesses whichare currently experiencing high caliber personnel shortages and shortcomings in the abilities ofcurrent employees. Recruitment programs targeted at elderly job seekers may hold considerablepromise for them.45Journal ofSmall Business Strategy Volume 9, No. I Spring l998Small business managers who are considering the employment of seniors should take intoconsideration the advantages and disadvantages uncovered by the study. If, for instance,dependability, possession of the work ethic, respect for authority, experience, and companyloyalty are of substantial importance to the recruiter, seniors may be a very good source ofapplicants. Conversely, if the job in question would not be appropriate for those with physicallimitations, those unable to work because of illness, those who work slowly, or those withconsiderable medical problems, the employer may be well-advised to approach the seniorapplicant pool with caution, unless modifications, such as changes in the nature of the work, canbe accomplished.Recruiting seniors sometimes necessitates different sources of job applicants than recruitingyounger persons. There are organizations, such as Aging in America, that specialize in placingolder job applicants. Some senior citizen centers are active in placing members who seekemployment. Various employment agencies are active in this field. Employers who seek olderemployees may be well-advised to consider these alternative sources.CONCLUSIONSWhen seniors are hired, small businesses may find it advisable to make certain changes inmethods of supervising employees and arranging their work. Since seniors are dependable,experienced, and have the work ethic, they may require less close supervision. It may benecessary to convert some jobs to part time or job sharing and to employ flextime, if this is notalready available. Certain job responsibilities may have to be redesigned, so they are lessphysically demanding.Training methods and procedures may, of necessity, require deviations from those used foryounger employees. Since many seniors are experienced, their desired training may be lessextensive. In some cases, adjustments may be needed in the training format, as by presentingideas at a slower pace. A positive phenomenon is that the training benefits to the firm may accruefor a long time period for seniors, since their turnover is less and they are less likely to move onto other companies afler they have been trained by the current employer.REFERENCESG Tl .M(199D) T d h 21MC B~AD I 6 I .30(l)566D.Kluckhohn, C. (1987).Mirror for Man. Greenwich, Conn.: Premier Books, 189-192.6, 0 A (1997) Th 7 h Bl I Ad 11 g A~iG mu . 1)99(l)465D.Peterson, Robin T. (1995). The Depiction of Senior Citizens by Banks in NewspaperAdvertisements: A Content Analysis. Journal of Professional Services Marketin 12 (2),95-106.W IB.G IdB.()994). T g I g h M Ml d. A I 0 ~HI6(2),32.36.46

An Analysis of Small Business Hiring of Seniors

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An Analysis of Small Business Hiring of Seniors

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