Get Ready for the Older Worker

By Hannah Wallace April 30, 2005

A major shift is taking place in the U.S. workforce: It is aging rapidly. By 2012, nearly 20 percent of workers will be age 55 or older, in contrast to 14 percent in 2002. That's an increase of more than 10 million 55-plus workers in just 10 years. The main reason for the graying workforce is the disproportionate number of baby boomers, about 76 million of them. In 2012, boomers will be between 48 and 66 years of age. Their presence in the workforce likely will be all the more palpable because millions of them will choose not to retire, either because they enjoy working, want to remain active or simply may not be able to afford retirement.

In response to this seismic change in the labor force, many employers will find that attracting and keeping older workers on the job will be key to remaining competitive. Both independent and private research has shown that business and customer perception of older workers is positive. They are consistently praised for their dealings with customers and often are placed in roles that demand sensitivity to customer issues.

And, in contrast to the stereotypes, most reports indicate that performance tends to improve with age, the one exception being slight productivity declines for those workers older than 45 who were performing heavy physical labor. Older workers also cost less in terms of recruitment and retention. They tend to stay on the job for 10 to 15 years as compared with 3.4 years for younger workers ages 20 to 30. And older workers tend to have better attendance records than their younger counterparts.

Thus, many businesses are beginning to re-examine their practices of recruitment, training, alternative work arrangements, health benefits, pensions, retirement savings plans and retiree benefits. Entire industries are already feeling the pressure of this demographic shift. Aerospace and defense, utilities, healthcare, insurance and financial services, and public education, in particular, face some of the greatest threats of brain drain as mature, experienced workers approach retirement and too few skilled replacements are available.

The problem is not restricted to white-collar professions; the ranks of experienced blue-collar workers are already thinning, with implications for such industries as construction and heavy manufacturing that are reliant on the skilled trades. Nor is this problem limited to the private sector; the federal government is highly populated by individuals nearing retirement age and faces substantial talent shortages in certain jobs as a result.

In the short term, employers will want to look at their current programs, identify problems and unmet needs, and think about how to improve what they are doing now. They will also want to make a first-round assessment of how the changing demographics will affect them and identify specific occupational groups where there may be problems and where a strategy is needed. Over the longer term, employers will have several opportunities for more effective responses to mature workforce challenges and issues, such as recruiting, alternative job structures and different options for phasing into retirement.

Employers can improve productivity through workplace and program redesign in ways that will respond well to mature worker issues, through work/life programs, compressed scheduling, phased retirement and other means. Talent shortages will be a major problem for many employers. It is vital to understand where staffing gaps are likely to fall and to build job-specific strategies to fill them, particularly in scarce occupations. Some companies are already doing this type of planning.

In 2004, for example, 35 companies were named AARP Best Employers for Workers Over 50, among them three Florida-based firms: Lee County Electric Cooperative in Fort Myers, Welbro Building Corp. in Maitland and West Gate Resorts in Orlando. Some of these employers offer programs that allow a gradual move into full retirement or a phased retirement in which people may continue working as regular employees, but at reduced hours while also beginning to tap retirement benefits such as pensions. Others rehire retired employees as part of their temporary pool or as consultants. Some offer flexible work options, such as job sharing, working on a project basis or working from home. Some offer training programs that target older employees and encourage them to learn new technology and advance their knowledge and careers.

Benefits are always an issue. Innovative employers, like Volkswagen of America, allow workers to allocate $5,000 in pre-tax earnings to a flexible spending account for eldercare. Many employers offer catch-up contributions in 401(k) plans, which allow employees over 50 to make contributions above the usual limits.

In Sarasota and Manatee counties there are significant factors that can come to bear on workforce issues. A large share of the population is 50 years and older, and that population continues to grow. The economy is largely service-based, with the notable exceptions of healthcare services and the creative and performing arts. With the current price increases in real estate and the growth and expansion of this area, the need for skilled and unskilled labor will increase.

Many factors will encourage boomers to remain on the job. For one, the government is gradually raising the full-retirement age to 67 by 2027. Strides in health and longevity as well as the less physically demanding nature of most jobs will also add to this trend. But economic necessity is likely to be the impetus as boomers' retirement expectations will likely be eclipsed by inadequate savings, shrinking pensions, higher health-care costs and reduced benefits. A recent AARP study found eight of 10 baby boomers plan to hold full-time or part-time jobs after reaching retirement age.

Older workers return to the workforce for numerous reasons. Some wish to engage in the social interaction and satisfaction of performing in the work place. Others may need to augment retirement income. Some may be looking for executive or career-track positions. Some workers may be looking for healthcare benefits until they reach Medicare eligibility at 65. Others may need benefits to fill the gaps that Medicare doesn't cover. Still some may not need benefits at all and are simply looking for wage compensation.

For employers, employees and returning mature workers, there is potential for a win-win situation. There are different fits for different types of workers. The Senior Community Service Employment Program of the Florida Department of Elder Affairs, for example, gives low-income seniors job training and places them in part-time positions within their communities.

Busch Entertainment, Inc. and AARP recently ran two highly successful job fairs to recruit part-time and seasonal employees 50 years and older for Busch Gardens and SeaWorld theme parks. At the Busch Gardens event more than 500 applicants showed up, and by the close of the day Busch Gardens had hired more than 75 new employees. SeaWorld also had a great response with 300-plus people showing up for the job fair. By the close of the day SeaWorld had hired 150 new employees. Having heard the success of these job fairs, other employers in the state are now looking for ways to recruit older workers for both service and high-level jobs.

Most organizations will want to calculate the return on investment. Identifying methods of measuring success is an important step towards improving programs and keeping them in place. Programs need to be tailored to the environment. Paying particular attention to implementation is vital. Many good ideas fail to live up to their potential not because they are bad, but because the implementation was not adequate. Monitor results and utilization of programs implemented. Evaluate the benefits and costs of each program.

"The fact of the matter is that many mature workers want to be fully committed to a gainful endeavor as long as possible," says Laura McMullen, president of Think Bigger Consulting Group, a Sarasota-based management consulting group specializing in human resources and consulting and coaching solutions.

Employers need to take care in maintaining the skill sets of employees to ensure their long-term viability and the profitability of their businesses. The influx of baby-boomers moving through the system is not going to go away. They are a palpable force in the labor market. "Don't wait until you have an insurmountable gap in your workforce before you examine your resources," says McMullen.

Sun Hydraulics: It's All About Training

Sun Hydraulics is a Sarasota-based valve design and manufacturing company with facilities in the U.S., U.K., Germany and Korea. Well known in the manufacturing industry and studied in Ivy League M.B.A. programs for its lack of formal corporate structure, Sun Hydraulics operates with no job titles or offices, and the only meeting room has a picnic table.

But Sun Hydraulics is also unique in its workforce, most of whom are highly skilled and precise machine operators. Out of 540 employees who range in age from 18 to 82, about 200 of them (or 37 percent) are over 50 years of age. "At Sun our workers start out as learners, then become doers and then teach others," says Kirsten Regal, who handles human relations for the company. Sun's oldest employee was hired at the age of 79. He was trained by younger workers, became a doer and now he also teaches others. His productivity is at the same level as his younger counterparts, Regal says, adding that all Sun Hydraulics employees are full-time and have 100-percent paid benefits and a 401(k). They have no formal retirement age and their turnover rate is only 10 percent.

Sun Hydraulics has proven that a well-trained and skilled workforce is not dependent on age: "Sun's 2004 sales of $94.5 million-a 33-percent increase over 2003-meant an increase in material costs, but workers were even more efficient and productive," says Regal. "An efficient workforce is all about skill, training and dedication, and has very little to do with age."

Home Instead: A Good Fit

Home Instead Senior Care is a Sarasota organization providing non-medical home care for seniors, including companionship, cooking, light housekeeping, transportation and shopping. After 10 years in business, they've learned that older workers are often the best match for their clients.

"Our clients want someone they can relate to with music, hobbies, and aches and pains," says Julie Shortall, recruitment and training manager for Home Instead. "Many of our clients tend to prefer mature caregivers. Clients can more easily engage with them."

While Home Instead employs younger workers as well, Shortall says her mature workers often work from a desire to continue growing and contributing to the lives of others without the stresses of needing to provide for a family. Therefore, they can be more flexible in terms of client schedules. (More than three-quarters of its employees, young and old, are part-time workers and do not receive benefits.)

"We have found a great richness in these (mature) caregivers," she says. "They are someone the client can relate to, often with many similar life experiences, and they have time and a desire to share it-to make a difference in the life of someone who needs help."

Van Wezel: Star Performers

The city of Sarasota-owned Van Wezel Performing Arts Hall has a long history of welcoming workers over 65. Of its 20 current box office employees, six are over 65, and two of them are over 80, says house and box office manager Loreda Williams. All of them are part-time employees; Williams says their starting salary is $8.05.

"They are here, and I want them to be here," says Williams. "They do a very good job, they are very easy to work with, conscientious, responsible-if they say they're going to do something, they do it." Williams says turnover among her older staff is lower than with young people-students, for example, who may leave the area after they graduate. And their genuine pride in the institution-the friendships they make with each other and with regular patrons, their brush with the glamorous world of show business-makes them excellent customer service representatives. "They love the Van Wezel," she says. "They live for it. For some of them, it's their reason for getting up in the morning every day. Our older workers say, 'I want to help'; while sometimes a younger person will say, 'It's raining, I can't make it in.'"

Joan Werling, 74, who's worked the box office window for eight years and is currently on a 34-hour a week schedule, concurs. "I enjoy helping people, they become my friends. Plus, every time I pull up and look at the bayfront in the morning, it makes my whole day."

Williams says challenges do exist. "Sickness, surgery and just realizing that it's time to go (because of mental and physical health issues) when they don't want to" are all factors, she says.

Scott Melton is the associate state director (southwest) for AARP Florida.

Filed under
Show Comments