Demographic "Time Bomb" in Wait for Information Technolgy Businesses

Len Rust of the Rust Report draws attention to a recent report by research firm Ovum suggesting that IT shops are facing a demographic time bomb. According to Tom Kucharvy, the author of the report--"North America's IT staffing 'time bomb': managing the demographic shift" (September 2007; available from Ovum):

North American IT shops may well be facing a staffing perfect storm. Two big challenges are certain--a mass retirement of baby boomers that promises to deplete staff and starve many companies of critical skills, and a shortage of replacements due to a smaller crop of college graduates and a dramatic decline in students majoring in and planning to enter IT-related fields.

Rust writes that "As older workers exit, along with them go technological skills, industry and company knowledge, and seasoned judgment, including how to weigh the many factors that go into decision-making." However, a cultural divide will be created as yung people entering the workforce can be expected to embrace future advances without any reserve or difficulty, while "mature workers are unlikely to have the same readiness."

Meanwile, according to the Ovum report:

There are a number of steps that companies can take now to address current requirements and many others that corporations, in partnership with government organizations and educational institutions, must take to pre-empt even greater challenges in the future. The first step, however, is to do something that only a small percentage of US corporations have done--acknowledge the nature and extent of the problem and the need to address it.

Source: Rust Report Age gap strikes IT (October 26, 2007)

Corporations and Universities Helping Train Older Workers for New Careers

Writing in U.S. News and World Report, Kim Clark reports on the rising demographic tide of older students in universities, as a growing number of colleges, charities, companies, and governments are accommodating and encouraging adults who return to the classroom.

Among other things, Clark tells about an IBM prgorma, launched in 2005, that pays older staffers interested in becoming science or math teachers up to $15,000 apiece for tuition and time off for student teaching. This program is now being emulated in California with the establishment of EnCorps, which relies on partners in the commercial sector to recruit, train, and prepare retiring employees to pursue alternate careers as math and science teachers.

While IBM has, more recently, extended its program to pay for training older workers who want to "retire" into other public-service jobs, other employers are focusing more dollars on educating older workers in an effort to keep them from retiring. Thus, for example, Clark writes: "United Technologies Corp. is paying for all tuition and up to three hours off a week for any accredited college class. What's more, older students who get a degree are given a graduation present of $10,000 in utc stock."

Source: U.S. News & World Report "Heading Back to College Universities are doing more than ever to attract older students" (October 26, 2007)

Canada: Alberta Solicits Feedback on Aging Workforce

The Alberta Government has launched a public consultation on aging workforce, giving Albertans a chance to share their feedback on the issues and opportunities related to Alberta’s aging workforce. The consultation runs until December 14 and results will be compiled into a summary report to support the development of future policies.

According the consultation--"Alberta's Aging Workforce", Alberta and British Columbia are both facing labour supply challenges that are expected to intensify in the coming years; in Alberta, workers aged 45 and over account for more than one-third of the workforce. An accompanying discussion document ("Mature Workers in Alberta and British Columbia: Understanding the Issues and Opportunities") includes information from 14 large employer and labour groups plus small and medium-sized businesses in Alberta and B.C. This document is intended to be a resource for employers and policymakers in the public and private sectors, and it provides "a profile of mature workers in Alberta and B.C., factors that influence work decisions, and approaches taken by various stakeholders, governments and countries in response to the labour market challenges of an aging workforce."

Source: Government of Alberta News Release (October 23, 2007)

Other Sources: Edmomton Journal "Reports promotes keeping older workers on job" (October 23, 2007)

Survey: Ernst & Young Suggests Employers Not Ready to Face an Aging Workforce

Ernst & Young has released a follow-up to its 2006 report on the aging workforce. In this new survey--"Aging Workforce Survey: Challenges and Responses--An Ongoing Review", employers in the United States are depicted as remaining unprepared for the looming brain drain stemming from the aging of the “baby boomer” generation, "leaving themselves open to economic and productivity challenges if strategic plans are not put in place over the next five years."

Using response from human resource (HR) executives from Fortune 1000 companies, the survey confirms that a gap in strategy exists across organizations when preparing for and developing programs to meet the demands of this population as it nears retirement. The findings also suggest that employers may be experiencing a disconnect with this demographic in areas such as succession planning and employee benefits programs. For example, 41% say middle management level employees will be most affected by the brain drain; however, of those with formal succession-planning programs in place, 75% are focused on monitoring senior management only.

Among other key findings in the survey:

• Although 44% say it would be desirable to have senior management stay beyond the normal retirement age, 60% say current programs are “neutral” in terms of encouraging or discouraging retirement at a certain age;
• only 29% are considering phased retirement programs (with only 9% having such programs in place);
• 39% agree health care is the main driver in one’s decision to retire, but 54% are considering increasing employee co-pays that which could lead to the loss of talent.

Ernst & Young LLP also hosted a Thought Center Webcast with a panel discussion on the aging workforce and whether Corporate America is prepared to deal with the challenges arising from the impending retirement of the "baby boomer" generation. The webcast will be archived on their website.

Source: Ernst & Young News Release (October 22, 2007)

Health and Safety Professionals Must Address Aging Population’s Needs in the Workplace

At the 95th Annual National Safety Council’s (NSC) 2007 Congress and Expo held in Chicago in October, Dr. Gregory Petty, professor of health and safety programs at the University of Tennessee, led a session on "Special Safety Concerns for an Aging Workforce" to encourage health and safety professionals to take a look at the needs of older workers. According to a report of the session by Laura Water for Occupational Hazards, Petty explained that the phenomenon of so many older employees returning to the workforce after retirement can be attributed to better health, insufficient retirement funds or the desire to gain new experiences. Further, while many business and industry leaders are overlooking the increasingly older workforce, he predicted the expectations of this population’s work ability will change “with the realization that ‘old’ does not have to mean tired, sick, cautious or quiet.” However, hat the benefits of hiring older employees, however, are accompanied by risks.

Older worker face various challenges: the onset of diseases, reduced blood flow, memory problems, medication side effects and the loss of strength, stamina and flexibility. Older workers also may find it more difficult to learn new skills. Their reaction times slow down, their balance is affected and their vision and hearing quality decrease.

Among the suggestions that Petty made are for employers and health and safety professionals to be prepared to make accommodations for their older workers to keep them safe. These could include wellness programs, job analyses, and ergonomic evaluations to protect the aging workforce. He also added that restructured job duties and work hours might be beneficial to this population, as could be providing behavior-based feedback and giving more positive than negative consequences.

Source: Occupational Hazards "NSC: Special Safety Concerns for an Aging Workforce" (October 18, 2007)

Additional Sources: BLR " Managing Safety for the Aging Workforce" (October 23, 2007)

United Kingdom: European Court Decision Seen as Supporting Mandatory Retirement Law

A number of United Kingdom lawyers, reacting to the European Court of Justice decision upholding Spain's manatatory retirement law, believe the decision suggests that a challenge to the UK law will also fail. Thus, for example, a story in Personnel Today quotes Rachel Dineley, employment partner at law firm Beachcroft, as saying:

"While Heyday may persist with its challenge regardless of this development, employers can take comfort from what is clearly a sound and sensible view.

"Conversely, employees who had contemplated challenging their employer's decision to require them to retire on reaching age 65 may reluctantly accept the decision, and recognise that any challenge through the Employment Tribunal is very probably futile."

Similarly, in an article for THe Times, Michael Herman quotes James Baker, a solicitor at Macfarlanes, as saying: “The court has clearly accepted that mandatory retirement ages are discriminatory but that they can be justified as in this case.”

However, in a story in Clickdocs, quotes Juliet Carp, an employment solicitor with Speechly Bircham LLP, as saying:

"At first sight, the ECJ's decision seems likely to disappoint older workers - and delight many employers.

"Although the judges in Palacios made it clear that a wide discretion is offered to member states, it is still possible that the ECJ might not accept the British policy objectives as a legitimate excuse for age discrimination."

In addition, Gordon Lishman, Director General at Age Concern, has announced that, while disappointed that the the Palacios case did not succeed, Age Concern still believes "it is discriminatory for an individual to be made to retire on the grounds of their age and against their will," and that the Court decision will not set back the legal case that Heyday, supported by Age Concern, is bringing to the Court. "There are significant distinctions between the Heyday case and the case of Felix Palacios. The legal advice we are hearing is that Heyday should forge ahead with its case undeterred."

Sources: Personnel Today "European Court of Justice signals UK's mandatory retirement age will survive Heyday challenge" (October 16, 2007); The Times "EU ruling a blow to workers over 65" (October 17, 2007); Clickdocs "Compulsory retirement not prohibited, says ECJ" (October 18, 2007); Age Concern News Release (October 17, 2007)

European Court of Justice Upholds Mandatory Retirement Legislation

In the case of Palacios v Cortefiel Servicios SA, the European Court of Justice has held that the European Union's Equal Treatment Framework Directive does not prohibit member states from introducing mandatory retirement ages. Following an earlier ruling by an Advocate-General of the ECJ, the Court ruled on a complaint brought by Félix Palacios de la Villa against Cortefiel Servicios SA, in which Mr Palacios claims that his dismissal on the ground that he had attained the compulsory retirement age laid down in a collective agreement was unlawful and that a provision in Spain's discrimination laws which effectively allowed employers to force staff to retire at 65 was incompatible with European law.

In its decision, the Court first stated that national legislation fixing an age for compulsory retirement establishes rules relating to "employment and working conditions, including dismissals and pay" within the meaning of Council Directive 2000/78/EC of 27 November 2000--establishing a general framework for equal treatment in employment and occupation--and, therefore falls within its scope. Thus, since such legislation directly imposes less favorable treatment for workers who have reached that age as compared with all other persons in the labor force, it cannot pass muster unless there is justification for that difference in treatment.

Turning to the justification in the case of the Spanish legislation, the Court found that it lay in a national policy aiming to promote better access to employment by means of better distribution of work between the generations, even though the legislation did not formally refer to that aim. Furthermore, the court found that the legitimacy of such an aim could not reasonably be called into question, since the promotion of a high level of employment constitutes one of the ends pursued both by the European Union and the European Community.

The Court stopped short of authorizing any such legislation. While member states and enjoy broad discretion in their choice, the national measures may not go beyond what is "appropriate and necessary" to achieve the aim concerned. Thus, the Court found it not unreasonable for a member state to take the view that compulsory retirement, because the worker has reached the age-limit provided for, may be appropriate and necessary in order to achieve a legitimate aim in the context of national employment policy consisting in promoting full employment by facilitating access to the labour market. Furthermore, the Spanish legislation was not based only on a specific age, but also took account of the fact that the persons concerned were entitled to financial compensation by way of a retirement pension at the end of their working life, the level of which cannot be regarded as unreasonable.

Source: European Court of Justice News Release (October 16, 2007)

Indiana: Census Bureau Releases Profile of Older Workers

In a continuation of its partnership with 31 states on a series of reports on workers 55 and older, the Census Bureau has released its report on Indiana, the fourth state to be released in the series. Among the highlights of the report--"The Geographic Distribution and Characteristics of Older Workers in Indiana: 2004":

• of the 92 counties in Indiana, one county--Ohio County--had 20% total 55 or older;
• statewide, 14.4% of workers were 55 and older;
• 90 counties experienced an increase from 2001 to 2004 in the percentage of the county workforce that was 55 and older;
• among industry sectors that employed 100 or more workers 55 and older, educational services had the highest proportion of workers in this age group.

Source: U.S. Census Bureau News Release (October 15, 2007)

Netherlands: Focus on Age Discrimination

According to an article in Expatica, age discrimination is increasingly prevalent, and less talked about in the Netherlands than other forms of discrimination.
Of the 694 complaints of discrimination submitted to the Dutch Committee for Equal Treatment (CGB) in 2006, 219 dealt exclusively with discrimination on the basis of age.

Older employees tend to be less likely to be promoted or invited for job interviews, even when their resume are similar or better to younger candidates, according to a recent CGB report.

In addition, companies that are forced to reorganise usually prefer to fire older employees first. Older employees are also the least likely to be offered outplacement programmes that help make a quick transfer to a different company.

While laws may help the older workers who do file complaints, some insiders say only economic need will end age discrimination; as the baby boomers retire, the larger work force requirements can only be realized if companies decide to retain their senior professionals.

Source: Expatica.com "'Older' workers in Holland facing age discrimination" (October 12, 2007)

Canada: Federal-Provincial Partnerships To Help Retrain Unemployed Older Workers

The Canadian Deparemtn of Economic Development and British Columbia signed the Canada-British Columbia Agreement on the Targeted Initiative for Older Workers (TIOW). This agreement will allow British Columbia communities to design and deliver projects and services that will help unemployed older workers retrain for new careers. It is anticipated that these community-based projects will help at least 1,200 workers in British Columbia to upgrade their skills, benefit from job counseling, and gain work experience.

Similarly, the Governments of Quebec and Canada will jointly contribute $568,000 to facilitate the reintegration into employment of older workers in the Centre-du-Québec region who have been affected by plant closures or downsizing, particularly in the furniture and clothing industries. According to the estimates of Emploi-Québec, which manages the Targeted Initiative for Older Workers, this amount will help to reintegrate 72 older works into employment over the next few months.

Source: Government of Canada News Release (October 11, 2007); News Release (October 11, 2007)

United Kingdom: Government Seeks Feedback on Flexible Retirement

The United Kingdom's Department for Work and Pensions has issued a consultation, seeking views on key issues raised by industry since the implementation the pension provision of the Employment Equality (Age) Regulations in December 2006, particular application of the regulations in relation to flexible retirement and pension provision. The Department believes that there is still confusion as to whether the age rules can allow more flexible retirement.

The issue is especially important, since the government considers flexible retirement key to meeting the challenges of an ageing population by providing choices and opportunities for older people to plan how they want to stop working. "Increasing the incentives to work for longer will give individuals the opportunity to plan for a longer working life and save towards a more financially secure retirement." However, because of the age rules, "[e]mployers and the pensions industry may be reluctant to implement change without case law and therefore are cautious in proposing modifications to a scheme which could be considered discriminatory or which cannot be objectively justified if challenged."

Thus, in the consulation, the Department seeks responses to, among other questions:

Q1. We would welcome your views on what you believe might constitute direct or indirect age discrimination in relation to flexible retirement.

Q2. It would also be helpful if you could indicate practices which you believe should be exempt or which could be objectively justified.

Source: Department for Work and Pensions "Flexible Retirement & Pension Provision" Consultation Document (October 10, 2007)

Ireland: Report Calls for Abolition of Mandatory Retirement

A call for an end to mandatory retirement was one of the key recommendations of the Senior Select Retain & Retrain partnership as part of its final report--"More than just a Number, Older workers in Ireland." “The impact which compulsory retirement has on people cannot be underestimated,” Age Action chief executive Robin Webster said that “[c]ompulsory retirement ages, whether in the public service or not, should be removed. It would not only give workers who wish to continue working the option to do so, but would also enable employers retain some of their most experienced and valuable staff.”

The partnership consists of Age Action, FAS, ICTU, PARTAS and Contact Recruitment, and was funded by the EU Equal Community Initiative. Other recommendations of the final report include:

• Those who are made redundant or leave the workforce should be provided with the information they need to help them make this transition;
• In facilitating diversity in the workplace, it is essential that in-company age awareness training become a routine part of good HR practice, also leading to an improvement in inter-generational communications within companies;
• Older workers need to be assisted in knowing how to sell their experiences and validate their competencies, regardless of formal qualifications;
• employers need to examine work practices and make flexible work arrangements available, inclduing part-time work;
• older workers should benefit equally from access to training and courses should be more geared towards their personal and professional development;
• there is a need for a one-stop shop for employment services for older people.

According to the Minister of Enterprise, Trade & Employment, the recommendations bear serious consideration by policy-makers, practitioners and decision-makers: "Dissemination of the findings of the project’s work and of the lessons learned will be invaluable both in the policy making process and in generating public awareness generally of the issues involved."

Sources: Age Action Ireland "Time has come to abolish the mandatory retirement age" (October 4, 2007); The Irish Times "Call for end to mandatory retirement age" (October 4, 2007); Department of Enterprise, Trade and Employment Address by Minister Michael Martin at the “Experience has a Future” Conference (October 4, 2007)

Additional Resources: Senior Select Retain and Retrain "Older Workers & Employment Agencies in Ireland" (September 2007)

U.S. Labor Department Funds Pilot Projects To Help Older Workers Gain and Maintain Employment

The U.S. Department of Labor awarded four organizations more than $3.1 million to support pilot programs designed to benefit older workers. Grantees will partner with local entities, including One-Stop Career Centers, employers, community colleges and other educational institutions, to provide older workers with skills-based job training. Certain programs also will allow participants to earn wages while learning a new career and/or provide both older workers and employers with information and skills training designed to foster productive relationships between the two groups.

Source: Department of Labor News Release (October 1, 2007)

Survey: Older UK Workers Less Likely To Take Sick Leave When They Do Not Need To

Research from Unum suggests that older workers in the United Kingdom demonstrate greater integrity than their younger colleagues when it comes to taking days of work sick when they don’t really need to. Specifically, 99% of 56 to 64 year old workers in full-time employment had not taken a single day off sick when they hadn’t really needed to in the past 12 months, while 25% of 16 to 24 year old and 17% of 25 to 34 year old workers had taken at least one day.

With respect to days taken off for genuine illness, Unum’s research revealed that older people take slightly more days off work than their younger colleagues: on average, 16 to 34 years old workers took approximately four days off a year while 45 to 54 year old workers took around seven and a half days. However, 55 to 64 year old workers took just under seven days.

Commenting on the findings from a medical point of view, Unum’s Chief Medical Officer, Professor Michael O’Donnell, said:

Occupational Health professionals have long believed that short-term absence is less frequent in older workers. This research confirms that the reason for this is that they are less likely to take time off for trivial or spurious reasons.

Source: Unum Limited News Release (October 1, 2007)

Other Sources: Health Insurance & Protection "Older workers 'take less sickies'" (October 1, 2007)