It's not how old you are, but how old you feel

A study by IESE's Anneloes Raes and co-authors finds that certain HR practices can help employees feel young and reap the productive benefits of youth.

"You're only as old as you feel." It turns out the old adage may have some truth to it. And not only that: how old staff feel can have big implications for companies.

A new study by Florian Kunze, IESE's Anneloes Raes, and Heike Bruch, posits that when a company's employees perceive themselves to be younger than they actually are, the company achieves higher individual goal-accomplishment and overall performance -- especially in dynamic work environments.

What's more, the co-authors identify two factors that help lower subjective ages: having meaningful work and the absence of age-exclusive HR practices. Given the aging workforce in Western industrialized countries, managers should find encouraging news in this research.

Just how old are you?

The study looks at both subjective age and actual age. Subjective age is, essentially, how old you feel. There are health benefits to feeling younger than you are -- and also professional benefits: simply feeling younger has been linked to increased vitality and productivity by previous research.

Individuals assess their subjective age using personal benchmarks, such as their perceived health or stage of life. They also take organizational benchmarks into account, such as the age that employees at a certain position are expected to be, and adjust their perceptions accordingly.

And how does this affect a company's results? Youth has been correlated with pursuing growth and promotion at work, and having a longer term vision. Old age has been correlated with seeking maintenance and having a more limited time view.

So, when employees see themselves as younger than they actually are, they pursue growth and promotion opportunities, for the longer term. Simply put: they may work harder, with a longer view, and the company reaps the rewards.

Dynamic teams for dynamic environments

Growth and promotion-oriented behavior is particularly necessary in companies facing change and volatility.

In these dynamic environments, employees should remain flexible, be willing to acquire knowledge and feel driven to accomplish goals. This is a good fit for someone who feels younger. On the flip side, in more static companies, where little changes, subjective age is not as significant for organizational results, the co-authors find.

The company environment itself plays a role in shaping what age people see themselves to be. Employees compare themselves with the age norms and stereotypes they see around them, and this affects their subjective age.

Doing meaningful work plays a role. When employees see their tasks as highly meaningful, overall satisfaction increases and subjective age decreases.

But there's a caveat: The lowering of subjective age only tends to occur in companies whose HR practices are age-inclusive. For example, when companies limit participation in training programs by age, stereotypes tend to gain force and they can cancel out the positive effects of subjective age.

To cultivate the benefits of meaningful work and younger-feeling employees, HR practices should be age-inclusive and free of stereotypes.

Age is just one of the numbers

The empirical study included 107 German companies from five industry sectors: production, wholesale, retail, service and finance. A total of 15,164 employees participated, including HR executives, who were asked about their HR practices, and C-level executives, who were asked about overall company performance.

The co-authors found that the youngest employees (under 25 years) felt slightly older than their actual age. Meanwhile, for the rest of the sample, the older the employees got, the younger they felt, on average. In their overall sample, subjective ages averaged four years younger than by-the-calendar ages.

Previous studies have revealed that the gaps between subjective and chronological age were drastically different in different countries. In the United Kingdom, for example, the average gap between subjective and real age was almost 10 years, while in China the difference was only 10 months. As this study only looks at Germany, cross-cultural inferences are not made.

In short, it's not how old you are, it's how old you feel, and companies should see an opportunity there. With an aging workforce, leaders who can make their employees feel younger via meaningful work and the absence of age-exclusive policies in dynamic work contexts will also make a clear contribution to their organization's overall performance.