Older workers escaping the ax

The value of experience

Some companies don't have any choice but to let go of younger workers first. "First-in, last-out" rules at unionized companies, for instance, mandate such preferences. Deere is following such rules this month in announcing an indefinite layoff of about 188 staffers at its Dubuque, Iowa, plant, which builds gear for the hard-pressed construction industry.

But 172-year-old Deere, like a lot of old-line firms, is heavily populated by boomers and prizes their experience. The typical tenure at Deere tops 23 years and quite often stretches well beyond that, executives say.

"The more mature a worker is and the longer the time they've spent at Deere, their knowledge goes up exponentially," says Laurie Simpson, the director of team enrichment in the company's human-resources department.

Experts cite practical and legal reasons to explain why this wave of layoffs has proved less harsh on older workers than prior downsizings have.

"It's what we're calling 'work force optimization,'" says Roselyn Feinsod, a consultant at Towers Perrin, a human-capital advisory firm. "It's not blanket cutting across the board but a much more thoughtful approach. It's a much more targeted approach to RIFs (reductions in force) than there was in previous eras."

Singling out highly paid, generally older workers for trimming got plenty of companies into legal hot water for age discrimination in past years. So smart companies now know to avoid that risk, says Gerald Maatman Jr., a Chicago lawyer at Seyfarth Shaw, a firm that focuses on corporate labor law. Companies in survival mode, he adds, "pick the best and brightest people, those who can do more with less." That approach favors time-tested and seasoned boomers, he says.

The legal issue

Still, companies must tread carefully to avoid showing favoritism based on age. They could wind up facing reverse-discrimination suits from younger workers who feel targeted. Few companies will openly discuss any age preferences or even release information on the age makeup of their layoffs. Caterpillar recently offered a voluntary buyout program to its salaried and management staff, and a spokesman noted that it didn't relate to age or tenure with the company. "Basically, anyone who thought it made sense for them could take the package," spokesman Jim Dugan says.

Still, some organizations are candid about the need to keep boomers in place. Jean Jackson, the vice president for work force planning for Baystate Health, a 10,000-employee health care system in western Massachusetts, points to seasoned nurses who can mentor younger recruits in the operating room.

Says Jackson: "Our ability to keep seasoned, longtime employees for longer periods of time will be critical for us."

This article was reported and written by Joseph Weber for BusinessWeek.

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