United Kingdom: Acas Warns Employers To Act Now To Meet Age Discrimination Challenge

Acas, an employment relations organization, has released a guide to help employers and individuals understand how the age discrimination legislation effective October 2006 will affect them. More significantly, Acas warns employers to act now to beat the deadline; according to Acas Chair Rita Donaghy, "A lot of organisations are under the impression that the regulations will not affect them--this simply is not true. Age discrimination can affect employees of any age, not just the young and old."

The Acas pamphlet "Guidance on Age and the workplace" is available for free online.

Source: Press Release Acas (Aprl 27, 2006)

Survey: Employers Contemplating Changes in Retiree Drug Benefits

According to a survey developed by Towers Perrin and conducted by the International Society of Certified Employee Benefit Specialists (ISCEBS), a number of employers sponsoring post-65 retiree medical programs are rethinking their prescription drug strategies for 2007, and there’s greater interest in approaches that do not involve taking the Medicare Part D subsidy. In particular, the survey showed that 65% of plan sponsors chose to retain a prescription drug benefit and take the subsidy in 2006, 63% said they had not decided on how to respond to Medicare Part D beyond 2006. The two most popular choices for those (37%) with a 2007 strategy are to offer a supplemental plan in coordination with Medicare Part D plans available in the market and to arrange to offer a specific Part D plan. In addition, 12% indicated that they planned to eliminate all retiree medical coverage in 2007 or eliminate prescription drug coverage.

Source: "Employers With Retiree Drug Benefits Charting Different Courses for 2007" Towers Perrin Monitor (April 13, 2006)

Analysis of Aging Workforce Suggests Declining Economic Value for Many Firms

Francesco Daveri and Mika Maliranta presented their paper "Age, Technology and Labour Costs" at 43rd Economic Policy Panel Meeting in Vienna (April 20, 21, 2006). According to their abstract, the paper seeks to answer the question "Is the process of workforce aging a burden or a blessing for the firm?" by providing evidence on the age-productivity and age-earnings profiles for a sample of plants in three manufacturing industries (“forest”, “industrial machinery” and “electronics”) in Finland.

Our main result is that exposure to rapid technological and managerial changes does make a difference for plant productivity, less so for wages. In electronics, the Finnish industry undergoing a major technological and managerial shock in the 1990s, the response of productivity to age-related variables is first sizably positive and then becomes sizably negative as one looks at plants with higher average seniority and experience. This declining part of the curve is not there either for the forest industry or for industrial machinery. It is not there either for wages in electronics. These conclusions survive when a host of other plausible productivity determinants (notably, education and plant vintage) are included in the analysis. We conclude that workforce aging may be a burden for firms in high-tech industries and less so in other industries.

On the more optimistic side, they do note in the paper that "older workers int eh future will be likely more educated than they are today and therefore, as also implied by our results, they may be more apt to deal with the Next Big Things."

A draft of Working Paper No. 309 is available on the IGIER website.

Source: Abstract Innocenzo Gasparini Institute for Economic Research (IGIER) (April 11, 2006)

Burgeoning Number of Older Women Being Forced Back into the Workplace

Writing for the Chicago Tribune, Bonnie Miller Rubin tells the story of how women are particularly vulnerable to the eroding retirement backstops--Social Security, company pensions and personal savings--because they tend to start working later, earn less and live longer. Citing U.S. Department of Labor statistics that show that the number of women over 65 in the workforce has increased by 38% since 1980, while male participation has remained stable, she shows how ill-prepared many women are for this stage of life, which can stretch two decades beyond age 65.

Women's lifetime earnings look different on average than those of men. Women are concentrated in low-wage or part-time jobs and can lack experience dealing with financial matters. They are more apt to drop out of the workforce to be a caregiver, resulting in more meager assets. Such reasons help explain why older women are flocking to job fairs and filling out applications in record numbers, experts say.

Rubin quotes Cindy Hounsell, president of the Women's Institute for a Secure Retirement, who testified about the retirement gender gap before the Senate Committee on Aging, that as saying that it is a "startling post-retirement picture for millions of women who have worked their entire lives."

Source: "More working women find they can't afford to retire" Chicago Tribune (April 24, 2006) Need to register (free)

Global Retirement Survey Shows Traditional Retirement Model Weakening

People want to abandon traditional models of retirement in favour of self-sufficiency and a mix of work and leisure, according to what HSBC Holdings calls "the largest global survey into attitudes towards ageing and retirement ever conducted." Following up on its initial survey released in 2005, HSBC expanded its survey to cover 20 countries. From its survey of 21,000 people and 6,000 companies, the survey finds, among other things, that:

• 43% want to self-fund retirement
• 36% support compulsory saving for retirement--the first choice option for funding later life
• 72% want to scrap mandatory retirement
• 49% of employers recognise the high value of older workers, but many lack the practices to attract and retain them

Stephen Green, Group Chief Executive, HSBC Holdings plc, said HSBC's research “shows that individuals increasingly expect to bear their own costs in later life, but governments and business must understand their role in continuing to support individuals. They cannot afford to shy away from the enormous challenges and opportunities presented by global ageing.”

Future of Retirement: What the world wants, written in conjunction with the Oxford Institute of Ageing, is available for download as either an executive summary, a consurmer report, or an employer report. In addition, country-by-country summaries are available at The Future of Retirement website.

Source: News Release HSBC Holdings plc (April 26, 2006)

Older Workers Underappreciated in Workplace

According to a survey by Randstad USA, 91% of employed U.S. adults said they have not saved enough money for a comfortable retirement, and 40% expect to continue working after retiring from full-time work. More importantly, the survey shows some possible compatibility issues with younger workers that employers need to be prepared to appropriately address--while three-quarters of experienced workers (ages 55 years and older) said they relate well to younger co-workers, only 56% of all employees surveyed said they relate well to older workers. "In fact, a total of 77% said younger employees do not seek advice and guidance from employees over age 50."

Genia Spencer, managing director of operations and human resources for Randstad USA, offers the "ABCs" of how to bridge the generation gap among employees:

• Avoid any age-based assumptions about employees and recognize that all of your colleagues will potentially bring different and insightful ideas to the table.
• Be open-minded to learning new ways of doing things and be receptive to time-tested ideas.
• Create an environment where all employees have a meaningful opportunity to contribute.

Source: News Release PRNewsWire (April 26, 2006)

Unpaid Leave Helps Middle-aged Caregivers Keep TheirJobs

As the nation ages, so does the psychological distress endured by both men and women caregivers, according to Indiana University sociologist Eliza Pavalko. In a new study--"Combining Care Work and Paid Work: Do Workplace Policies Make a Difference?"--published in the May issue of the journal Research on Aging, Pavalko and co-author Kathryn Henderson found that while middle-aged women who become caregivers for an ill or disabled family member are more likely to leave their jobs altogether than reduce their hours, unpaid family leave, of all family-friendly benefits, proved most useful in helping caregivers keep their jobs.

These findings comes in the face of two trends, a workforce that is both increasingly female and aging, meaning that more and more working men and women will encounter the challenges of caring for parents and other loved ones. During the six-year study period, 13 percent of the employed women surveyed provided substantial levels of care for ill or disabled family members at least once. Caregivers who leave the workforce not only experience the immediate loss of their income and other employment benefits but face the prospect of reduced Social Security benefits later in life.

"Despite growing attention to family-friendly policies in the workplace, we know surprisingly little about whether they help families manage the burden of care work," Pavalko said. "Employers may be particularly interested to find that the relatively inexpensive benefit of unpaid family leave is so effective for reducing employee turnover."

An interview is available with Pavalko from Inside Indiana Business.

Source: News Release Indiana University (April 24, 2006)

Federal Reserve Study to Show Impact of Baby boom Retirement

A new Federal Reserve study, to be published in July, finds that the retirement of the Baby Boom generation will force far-reaching adjustments in the way the economy works. Preliminary results of "The Recent Decline in Labor Force Participation and its Implications for Potential Labor Supply" from The Brooking Institution suggest that forecasts for everything from growth and employment to corporate profits and interest rates will have to be recast.

According to a report on the preliminary results from Bloomberg, the study has shaken economists' forecasts by suggesting the U.S. economy will have to decelerate much more over the next decade than most now expect. "The study projects what the authors call a 'conservative' 3 percentage-point decline over the next 10 years in the labor force participation rate--the percentage of people who are either working or looking for work." However, other economic forecasts predict much smaller drops in the participation rate.

Source: "`Revolutionary' Fed Study Has Economists Rethinking Forecasts" Bloomberg.com (April 13, 2006)

Wisconsin: Why Retirees Are Still Working

Maureen Wallenfang, writing for the Appleton, Wisconsin Post-Crescent, tells the tales of a number of Fox Cities area seniors who have said no thanks to retirement. While some do it for the money, others do it to stay connected. Thus, for example, the retiremetn advice of one of the seniors she talked to was "Don't do it." "'Cut back instead. Keep your finger on what you've done all your life. It's part of you. That's so important,' he said. 'The heart attacks come when you're bored.'"

The paper also ran a companion piece by Wallenfang about how "Some seniors returning to work force need retraining."

Source: "Plenty of older workers on the job" Appleton Post-Crescent (April 23, 2006)

Commentary: Aging Workforce Triggers Need for Business Intelligence

Dr. Ramon C. Barquin, President of Barquin International, believes that business intelligence will play a pivotal role in dealing with the ramifications of the aging of our nation’s population. Writing for the Business Intelligence Network, he says that the aging population will have a direct impact on the workforce--there "will not be near as many arms and legs to do the nation’s work. We will have to import more people, outsource the work abroad or find different ways to do the actual work. In all probability, we will do a combination of the three across the industrial spectrum, but there will be significant impact and change on the workplace."

However, rather than heralding the news that America is aging, Barquin says that it is important to point out enterprises--as well as the nation as a whole--have to start making decisions for which business intelligence will play an important assisting role. "What are we going to do about the shrinking workforce? Do we outsource more work? Do we increase immigration? Do we restructure work processes? How? What? When? Where? Only through the rigorous and methodic application of business intelligence can we actually get the answers right."

Source: "Business Intelligence and the Aging" Business Intelligence Network (April 13, 2006)

First AARP "2020 Vision Forum" Focuses on How the Aging of the Boomers Impacts the Workforce

The AARP launched its opinion leader "2020 Vision Forum" Series with a "Boomers and the Workplace Revolution" forum designed to stimulate debate with key workforce stakeholders on the demographic shifts and trends of the 50+ workforce. At this forum, business, academic and community leaders heard how boomers are reshaping the American workplace. An interactive discussion examined how we as a society can best go about ensuring that suitable work opportunities are available to retain an older workforce as the pool of younger workers shrinks while encouraging employers to expand employment opportunities, training and flexible or "phased" retirement options to retain their boomer workers.

AARP CEO Bill Novelli hosted a panel discussion of leaders in business and education, moderated by CNBC's Maria Bartiromo. Panelists included Ramani Ayer, Chairman and CEO of The Hartford, Jane Friedman, President and CEO of HarperCollins, Daniel Pink, Wired magazine contributor and author of Free Agent Nation, and Dr. Shirley Pippins, President of Suffolk County Community College.

A recorded webcast of the forum is available for viewing.

Source: News Release AARP (April 19, 2006)

For a news story from the forum, see New York Daily News.

Commentary: Hopes for Working Retired Not Panning Out?

Beverly Goldberg, vice president and director of publications at The Century Foundation and the author of Age Works: What Corporate America Must Do to Survive the Graying of the Workforce, believes that "the magic bullet of working retired that would allow those workers who have not saved enough for retirement or whose pensions have disappeared in the collapse of the Enrons and bankruptcies of airlines seems to be a dud." Despite the interest shown by human resource managers, the growth in the number of those working retired has not met expectations.

Goldberg says that buy-outs of older workers still abound and the costs of health care for older workers make employers resistent to finding ways to hold on to them. In addition, "many jobs have changed so much that the skills of most older workers are irrelevant, and training is seldom offered to older workers." Companies are also "opting to invest more in machinery and automation to reduce the need for older workers." One result is that many employees are just hanging on to their current jobs as long as they can.

Source: "Working Retired: An Idea Whose Time May Never Come" The Century Foundation (April 19, 2006)

Commentary: Immigration as Solution to Aging Workforce

In her regular "My Time" column in the Washington Post, Abigail Trafford argues that with "more people living longer and couples having fewer children, the influx of immigrants--who tend to be young adults--helps stabilize the balance between generations." In fact, immigration postpones the day of reckoning "so that we can start the debate now and develop a national blueprint to meet the needs of our aging population."

Source: "Immigration Is An Aging Issue" Washington Post (April 18, 2006)

Canada: Business and Labor Form Alliance To Tackle Challenges Arising from Aging Workforce

As part of a country-wide initiative called the “Workplace Partners Panel” created as a response to labour and business concerns about the need for a collaborative approach to address Canada’s labour market challenges, leaders of Nova Scotia's labour and business sectors are meeting to discuss potential solutions to Nova Scotia’s labour market challenges arising from an aging workforce.

Rick Clarke, President of the Nova Scotia Federation of Labour, and Elizabeth MacDonald, former Vice-President of Enterprise Services for Emera Inc., are chairing a “dialogue session” with the province’s business and labour, community, and government leaders, including representatives from the education sector, immigration settlement, youth and economic development.

“What we want is to help identify and document Nova Scotia and the Atlantic region’s best thinking on the issue of skills needs in the context of an aging workforce,” adds Liz MacDonald. “This is a critical issue for Atlantic Canada as the region deals with an aging population, a low birth rate, and the loss of young people leaving the region in search of other opportunities.”

Source: News Release Workplace Partners Panel (April 18, 2006)

Keeping Pace with Managing Multigenerational Workforces

"Managing multigenerational workforces is an art in itself. Young workers want to make a quick impact, the middle generation needs to believe in the mission, and older employees don't like ambivalence." Eric J. McNulty, managing director of Harvard Business School Publishing's conference division, suggests that companies must recognize new attitudes among their workers: "They must acknowledge that new relationships will exist between employees and organizations. And they must open themselves up to revisiting assumptions about which workers are appropriate for which roles and to rethinking the ways in which they hire, motivate, and retain employees." In particular, he recommends looking at the advice of Tamara Erickson and Bob Morison of The Concours Group, who have done extensive research on the changing workforce and the age-based cohorts that compose it.

• Workers under 35: One should rapidly place younger workers into responsible roles to get the most out of these workers before they move on.
• Workers between 35 and 54: Middle cohort workers may have to stay in their roles longer because the cohort ahead of them is retiring later and there are also fewer replacements coming up from below. They need to be reengaged through fresh assignments, mentoring, and knowledge-sharing roles, and even through career switches within the company.
• Workers 55 and over: Companies should get serious about recruiting and retaining older workers for both entry-level and highly skilled work. Ferret out and eliminate the tacit age bias that often exists in hiring and development processes, and craft roles that leverage the expertise of older workers. Think of retirement as an opportunity to keep talent around rather than as a way to phase people out.

Source: "Can You Manage Different Generations?" Harvard Business School Working Knowledge Newsletter (April 17, 2006)

Arkansas Announces Mature Worker Initiative

Arkansas Governor Mike Huckabee has announced a new workforce development program--the Arkansas Mature Worker Initiative. This program will highlight featured employers who have made a commitment to hire mature workers, many of which companies have offices in Arkansas.

“It’s encouraging to see these companies recognize the value of the countless mature workers we have in Arkansas,” said Gov. Mike Huckabee. “I hope more employers see these workers are known to have essential qualities needed for today’s jobs, including loyalty, dedication and responsibility.”

After rolling out a program on the national level, AARP selected Arkansas as a pilot state, and Gov. Huckabee selected the initiative as one of his top priorities for the Arkansas Workforce Investment Board. Several regional meetings will be held across the state to inform employers about the initiative, at which a panel of employers will discuss the initiative and how their companies have benefited from hiring mature workers.

Source: News Release Department of Workforce Services (April 12, 2006)

United Kingdom: Older Workers Filling New jobs

According to an article by Andrew Taylor, the Employment Correspondent for Financial Times, official statistics show that "more than half the jobs created in the past year were filled by people above the state pension age." He reports that various employers’ organisations attribute the rise in the number of working older people to increasing financial pressures created by pensions shortfalls and a growing willingness of employers to take on older staff.

Sam Mercer, director of the Employers’ Forum on Age, said that employers faced with skills shortages were also more prepared to hire older people who were physically and mentally fitter than previous generations. Large supermarket chains, such as Tesco and J Sainsbury, in particular, had made an effort to employ older staff to reflect the balance of society at large and an ageing population that provided many of their customers, she said.

Source: "Older workers take most new jobs" Financial Times (April 12, 2006)

Rising Health Insurance Costs Pressuring Employees Considering Retiring Early

John O'Neil, writing in The New York Times, reports that the evaporation of health benefits for younger retirees will be playing an important role in the final career trajectory of the baby boom generation. "Even more than pensions, they say, retirees' access to health insurance may determine whether the next decade sees an outpouring of late-in-life energy and entrepreneurialism or whether offices will be clogged with workers stuck in their cubicles until they turn 65." In particular, workers need to contemplate having $50,000 to $100,000, or more, to cover health insurance until they qualify for Medicare, assuming they are healthy enough to qualify for insurance at all.

After discussing many aspects of the problem, O'Neil does conclude by pointing out that there are some signs of new alternatives emerging. For example, some states have extended COBRA coverage. In addition, some companyies are exploring the idea of adding or extending health insurance for pre-Medicare retirees, as they try to manage the departure of their baby boom work forces--discovering that a lot of people are hanging around, ready to retire, but they just don't have the benefits."

Source: "Want to Retire Early and Hang a Shingle? It'll Cost You" New York Times (April 11, 2006)

CPA Group Suggests Tough Retirement Years Ahead

A poll conducted by Harris Interactive for the American Institute of Certified Public Accountants (AICPA) shows that 46% of Americans expect to fund their retirement through Social Security and pensions, and an equal number expect that their retirement funds will last them 10 to 20 years. However, 23% have not yet begun to save for retirement, and 47% indicate that while they have started saving, they also admit they have a long way to go.

“A distressing gap exists between the public’s expectations for retirement and the reality," said Carl George, CPA, Chair of the AICPA’s National CPA Financial Literacy Commission and CEO of Clifton Gunderson LLP. "Moreover, too many Americans think they can rely on the Social Security and pension safety net to carry them through. The fact is, Americans must realize they have to take responsibility today for planning and saving for their retirement. Otherwise, they may find themselves working far longer than they anticipated or at a lower standard of living.”

The survey also shows that 39% of survey respondents believe as little as $500,000 will be sufficient to see them through their retirement. However, George noted that when spread out over the course of 30 years, that amount becomes $16,000 a year and would have to take into account uninsured medical costs and other expenses, such as the possibility of assisted living.

Source: News Release American Institute of Certified Public Accountants (April 4, 2006)

Survey: Americans' Retirement Hopes Filled With Holes

According to the Employee Benefit Research Institute (EBRI), a large majority of Americans expect to enjoy a comfortable retirement, but many have not taken the actions needed to turn their aspirations into reality and face the prospect of having to work far longer than they expect. Published as EBRI Issue Brief No. 292, Will More of Us Be Working Forever? The 2006 Retirement Confidence Survey, EBRI's 16th annual survey, suggests that many have accumulated only modest retirement savings, underestimate the share of their preretirement income they are likely to need in retirement, and have made no estimate of how much they will need to live comfortably once they retire.

By the numbers 24% said they are very confident they will have enough money to live comfortably in retirement, and another 44% said they are somewhat confident. Among the survey's highlights:

• 68% of current workers say they and their spouses have accumulated less than $50,000 in retirement savings--including 88% of those 25–35 and 52% aged 55 and older.
• 66% of current workers think they have some chance that they will live until age 90-—or spend 25 years in retirement, assuming they retire at age 65. However, 58% also think they will have less than 25 years of retirement and another 19% are unable to estimate how long their retirement will last.
• 59% said they hope to have a retirement standard of living equal to or higher than in their working years, but only 58% have actually calculated how much money they will need to retire comfortably.

An Executive Summary of the report is also available.

Source: Press Release EBRI (April 4, 2006)

MetLife Survey Finds Retirement a "State" Not a "Date"

According a new MetLife Mature Market Institute® study, older workers are changing the concept of retirement as they live longer and work well past traditional retirement age--some returning to the workforce after they "retire" and/or opting for "portfolios" of paid and volunteer positions. The study--Living Longer, Working Longer: The Changing Landscape of the Aging Workforce--was conducted by David DeLong & Associates, Inc. and Zogby International and examines the actual work experiences of employees age 55-70.

The study found that 78% of respondents age 55-59 are working or looking for work, as are 60% of 60-65 year-olds and 37% of 66-70 year-olds. The "working retired"--workers have actually accepted retirement benefits from a previous employer and then chose to return to work or seek work--represent 11% of 55-59 year-olds, 16% of 60-65 year-olds and 19% of 66-70 year-olds.

Among other things, the survey found that motives for working differ significantly by age, with economic incentives taking precedence among workers age 55-59 (72% of them citing "need income to live on" as a primary reason for working), but narrowing for 60-65 year-olds (60% citing this reason, followed by a desire to "stay active and engaged" (54%) and "do meaningful work" (43%)), and nearly disappearing among 66-70 year-olds, 72% of whom cited the desire to "stay active and engaged" as a primary reason to work, followed by "the opportunity to do meaningful work" (47%) and "social interaction with colleagues" (42%).

Source: Press Release MetLife (April 3, 2006)

Seminar Offered on Managing Health and Productivity of Aging Workforce

The Disability Management Employer Coalition (DMEC) has announced its 2006 Management Series of half day seminars that provide employers with practical problem-solving tools. This year's schedule includes an offering on "Health and Productivity Management with an Aging Workforce," sponsored by UnumProvident. This seminar will:

• Define current health, productivity and economic patterns related to an aging work force
• Illustrate the labor market dynamics that impact hiring, retention and retirement over the next decade
• Present the building blocks of a productive aging program as part of corporate based disability management, benefit design and human resource management strategies.

It will be offered May 18 in Atlanta, GA, May 25 in Newton, MA, September 7 in Santa Clara, CA, September 14 in Tampa, FL, and September 21 in Houston, TX.

Source: Press Release PressWire (April 3, 2006)

Singapore: Survey Shows Over-50's More Committed Workers

An article by Grace Chong in The Business Times reports that recent survey data shows that employes 50 or older show greater commitment and alignment to their companies than their younger colleagues and feel they are better equipped in terms of resources. The findings--derived from Watson Wyatt Worldwide's WorkSingapore study covering about 8,000 employees working in 13 industries--also show that companies with older, and hence more committed, workers see a better financial performance: "Businesses with highly committed workers had an average shareholder return of 23%, while companies with low commitment levels from staff generated returns of only 7%."

Source: "Companies with older workers perform better: study" The Business Times (April 1, 2006)

New Zealand: EEO Trust Launches Survey of Older Workers

New Zealand's Equal Employment Opportunities Trust has launched an on-line survey on how age affects people's experiences at work. Among other things, the survey includes questions about inter-generational conflict, age discrimination, and older people's experiences and preferences at work. According to EEO Trust Chief Executive Dr Philippa Reed, "Older workers are a growing proportion of the labour force so employers looking for the very best people need to know how to create workplaces which suit them."

Source: Equal Employment Opportunities Trust Media Release (March 30, 2006)

Additional Resources: The EEO Trust subsequently issued its finding on this survey.

A Laid-off Older Worker Retrains

Barbara Rose, writing for the Chicago Tribune, tells the story of one 57-year-old worker has started to retrain his hands and his head for a new set of workplace skills after the Chicago lamp factory where he worked for decades closed in 2005. According to her article, he and other Cooper employees qualified for up to 2 1/2 years of unemployment benefits and training through the federal Trade Adjustment Assistance program for workers who lose jobs to foreign competition, but that as few as 15% percent of Illinois workers who are eligible access the training.

"For older workers, a lot of them really question whether they can go back to school," said Rick McHugh, Midwest coordinator for the nonprofit National Employment Law Project.

Source: "Retooling a career, a life" Chicago Tribune (March 31, 2006)