The Aging Workforce: An Underutilized Resource
According to the U.S. Bureau of Labor, there will be a shortage of 10 million workers by 2010, and 43% of the civilian workforce will be eligible to retire in the next 10 years. This global workforce shortage will affect every major company worldwide.
U.S. Census Bureau statistics show that the world is aging. Specifically, the number of people aged 65 and older is expected to increase 26% by 2015, while the population aged 40 to 54 will shrink by 5%. Americans aged 25 to 39 will grow by a modest 6%. On top of that, birth rates are declining.
Not only are employers running out of workers as the population ages and birth rates decline, they are also running out of people with the skills necessary to do today’s work. Global competition is changing the way most companies do business. Technology is continuously redefining how, where and by whom work is performed, and it’s changing the skills necessary to perform that work. Companies are also increasingly shifting their focus to customers and innovation. That puts added emphasis on leadership, collaboration, process excellence, customer service and compliance. Successful companies are more people-dependent than ever before.
So the world of work is changing while the number of available workers – and the number of workers with the required skills – is shrinking. Employers are finding it harder than ever to fill open positions.
This is good news for the aging workforce. Companies that have counted on hiring younger workers will have to look elsewhere; specifically, at retaining and re-training the workers they already have.
Aging workers or individuals seeking to enter or re-enter the work force can capitalize on the global talent shortage, as employers will be scrambling for any and all qualified workers they can get. The labor shortage is coming (or is already here in some parts of the United States and in some industries), and older workers have the potential to help companies weather that shortage.
There pool of aging workers is deep. According to the Bureau of Labor Statistics, people aged 55 and older will comprise slightly more that 20% of the nation’s workforce by 2014 – up from 16% in 2004. That’s more than 27 million workers who may be available to work.
Older workers have accumulated substantial knowledge about their job and their company. This knowledge allows them to do their jobs more effectively, more efficiently and more productively. This knowledge may also give the aging workforce an advantage against less experienced colleagues.
Many studies have shown that the mature worker has a better work ethic. That means they’re likely to be loyal, reliable, show up on time, act professionally, pay attention to tasks, persevere, have good work habits and display emotional maturity. Mature workers are generally good at those soft skills that are so important in the contemporary workplace.
However,not all employers feel the mature worker is worth the price. A recent survey conducted by Manpower asked companies what prevented them from actively pursuing the over-50 worker. Twenty-four percent of respondents said that expectations for higher salary or stature were a barrier, and 21% cited healthcare costs.
There’s some validity in those responses. In a 2005 AARP study titled, “The Business Case for Workers Age 50+”, the group found that employees age 50 to 65 use, on average, 1.4 to 2.2 times more healthcare as workers in their 30s and 40s. But healthcare costs are not the largest component of labor costs. The biggest component, base salary, is driven by the employee’s skills, responsibilities and individual contributions, not by age.
In other words, the cost of employees has to be examined with a broader lens. Because of healthcare, the total labor cost of 50+ talent is only marginally higher, while the cost of replacing experienced workers is significant.
The world has changed. The average life expectancy today is dramatically higher than even 30 years ago. Sixty is the new 40. And while the world and the world of work have changed, in many cases employers’ stereotypes have stayed the same. Shockingly, most employers are not worrying about the aging workforce issue: 78 % of the employers Manpower surveyed don’t feel that the aging workforce will have a negative effect on their success. Fewer than 18% of employers have a strategy to recruit older workers, and fewer than 28% are planning retention programs for that population. Companies need to realize the benefits they can gain by targeting and employing mature workers. HR departments need to start building the talent pipeline to make sure their organizations have an adequate number of candidates from which to choose. And if mature workers aren’t part of the candidate pool, employers are missing an opportunity.
So, you’ve decided to change jobs or re-enter the workforce – where do you start? When it comes to finding a new job, there are many outlets mature workers can pursue.
Research recruiting specialists in your area who have experience placing older workers
Join local or national associations, like AARP, and start networking
Join industry associations
Get in touch with old colleagues and employers and let them know you are back on the market
When perusing job advertisements, look for companies that boast generational diversity
A 2006 study conducted by the Center on Aging & Work and Workplace Flexibility at Boston College showed that employers do have some general negative attitudes about older workers, feeling that their late-career employees were, for example, resistant to change.
Additionally, RetirementJobs.com released some compelling research in 2007 about age bias. The website found that in many cases employers failed to acknowledge applications and resumes from mature workers. They also found that when the 50+ worker succeeds in getting an interview, but is then rejected, the most common reason provided is their “over-qualification” for the position.
Not only is it hard to get hired as an aging worker, it’s also hard to get the necessary training and development. According to the RetirementJobs.com’s survey, employers may systematically exclude mature workers from receiving needed training and development to keep their skills and knowledge current, instead focusing training resources on younger workers. As an aging worker, you’re making a mistake if you expect your employer to be the one worrying about keeping your skills current.
Don’t let this happen to you! Just because you’re aging doesn’t mean you don’t strive for excellence.
Be sure to discuss with your employer your career path and development opportunities that could lead to advancement. Be proactive and ask for training if you think it could lead to new opportunities within your organization. Make sure your employer is using fair salary and advancement criteria across your organization with regards to age and experience.
These age bias issues point to the importance of generational diversity awareness programs in the workplace. For the first time in history, four generations are working together. Aging workers should use their experience, qualifications and maturity to their advantage. They can be a role model for positive cross-generational interaction in the workplace by learning the work and communication styles of co-workers of all ages, and by respecting and celebrating differences.
Nearly half of all workers will be eligible for retirement soon. The first thing aging workers should do is determine whether or not they are ready to retire. Do you have the financial means? Are you mentally ready to slow down? Or do you just want to make a change?
Even if you answered “yes” to the above questions, you still might not want to retire. A perception is that people continue working for money or benefits, but according to 2003 AARP research, there are more existential reasons that keep us going to work. We want to stay active. We want to feel useful. We want to have fun and be around people. We want to continue learning.
If you are considering retirement, take a moment to think about your company’s age demographics and your own needs. Will a lot of workers on your team or in your organization be retiring within the next few years? If the answer is “yes,” consider how a delayed or phased retirement plan could work to your advantage. Talk to your employer about what would make you stay. Options to discuss with your employer could include:
Flexible work schedules (including part-time, more paid time off, telecommuting or job sharing)
Accommodations when necessary – like less physical activity, devices to help with hearing or sight loss
Potential consulting roles
Ways to reduce stress in your work environment
If you know you’ll be retiring in the near future, and you haven’t discussed succession with your employer, you should start planning now. This can be accomplished through formal mentoring programs, job shadowing, or training and developing your organization’s younger workers. The critical point is, don’t let your institutional and job-specific knowledge walk out the door when you do.