Survey: Employers Still Not Prepared for Boomers Leaving Workforce

Even though millions of Baby Boomers are poised to age out of the workforce, companies in the United States remain unprepared for their departure and the "imminent talent desert that promises to alter the productive capacity of business and disrupt the national economic landscape," according to a report issued by Sloan Center on Aging & Work at Boston College. In particular, 68% of the 696 organizations surveyed do not yet know how old their workers are or what proportion is likely to retire, while 40% stated that the aging of the workforce will have a detrimental impact on their organization in the next three years.

The 2009 Talent Management Study: The Pressures of Talent Management also reports that:

• 77% of employers surveyed had not analyzed projected employee retirement rates or assessed employee career plans;
• 56% had not assessed the skills their organizations need today and into the future; and
• 30% reported not having enough programs for recruitment, and 35% not enough for training of older workers.

The study's authors note that while the aging population will affect companies differently, the long-predicted workforce desolation has generated surprisingly limited responses. Baby Boomers represented the largest portion (48%) of the U.S. labor force in 2000, but this is estimated to decline to 37% by 2010, leading some economists predict labor shortages of 10-15 million in the coming decade.

“The out-migration of an entire generation of workers will upset the entire balance of the workplace,” said Marcie Pitt-Catsouphes, Director of the Sloan Center on Aging & Work and report co-author. “Knee-jerk reactions to today’s challenging economic reality aside, US companies need to start planning strategically for workforce sustainability. The current abundance of older worker talent and experience is going to dry up, and businesses will very soon need to fill hundreds, if not thousands, of jobs.”

Source: Sloan Center on Aging & Work at Boston College News Release (November 17, 2009)

Canada: Study Looks at Employer Readiness for Boomer Retirements

A survey conducted by the Human Resources Professionals Association (HRPA) in partnership with Life's Next Steps, reports that, while many Canadian employers face retirement levels of 20% or more over the next five years, most admit that they are not fully prepared to deal with this important issue. Specifically, HRPA's "Are Canadian Firms Prepared for the Boomer Exodus from the Workforce?" reports that only 14% of organizations feel fully prepared for "the coming talent shortage," while 23% admit to being "poorly prepared" and 60% say they are only "somewhat prepared".

"Many boomers obviously want to continue working in some way, to remain active and engaged or due to financial concerns," said [Suzanne Armstrong, president of Life's Next Steps.] "HR has an opportunity right now to take the lead in creating programs that help boomers plan for a different kind of retirement, and that encourage good employees to stay involved in the workforce in ways that are practical and flexible. It can be a win-win for employees and organizations. But employers need to act now to create initiatives and incentives aimed at keeping some of these excellent employees on the job in some way."

Source: Human Resources Professionals Association News Release (October 8, 2008)

Commentary: Aging Workforce Presents Longterm Retirement Planning Opportunities for Employers and Employees

Ian Martin, UK Head of Retirement Businesses, HSBC Insurance, suggests that "Ageing populations are an opportunity for us all--be it increased longevity for individuals or access to mature, skilled workers for employers." However, this opportunity also comes with responsibilities: "for individuals to prepare and for employers to understand the value of older workers and ensure the working environment helps older workers to continue to flourish."

Martin's comments drew on an HSBC Insurance global report--"The Future of Retirement: Investing in Later Life"--which identified an ill-prepared generation with high expectations for their retirement but, perhaps unwittingly, unprepared for the cost implications for funding their increased longevity and desired retirement lifestyle.

Source: Director of Finance Online "Long term retirement planning " (September 26, 2008)

Singapore: Unions Track Employer Commitments to Rehiring Older Workers

The National Trades Union Congress (NTUC) has established a four-tier framework to let unionized employers understand where they are in getting on track with respect to when Singapore's reemployment legislation kicks in come 2012. According to the NTUC, 433 out of the 1000 unionised companies have committed, at varying levels, with a total of 3910 older workers having been re-employed.

Under the NTUC's framework, a company can be categorized at on of four levels of commitment to reemployment:

• Level 1 refers to companies that are already reemploying older workers, but on an ad-hoc basis.
• Level 2 refers to companies that are already reemploying older workers and have a reemployment clause in their agreements with unions.
• Level 3 refers to companies that have a formalized HR policy on re-employment.
• Level 4 refers to companies that are pro-actively seeking out new initiatives to ensure that their re-employment efforts are sustainable and scalable.

Of the 433 companies committed to reemployment policies, 15% have in place a formalized HR policy, and the NTUC is working to encourage the other 85% to follow suit, so as to increase the proportion of companies at Levels 3 and 4.

Source: NTUC Press Release (May 13, 2008)

Survey: MetLife Employee Benefits Study Shows Increased Focus on Retirement and Aging Workforce

The workplace has become the dominant starting point for building a strong financial safety net, with more than half of working Americans (52%) obtaining the majority of their financial and retirement products through the workplace, according to MetLife. In addition to providing a picture of corporate employee benefits, its "6th Annual MetLife Study of Employee Benefits Trends" includes a look at a growing focus on retirement and the aging workforce.

Employers are implementing a range of programs and accommodations. Large companies outpace smaller employers when it comes to offering retirement guides/information and training. About one-third of companies with 500 or more employees offer resources and programs for an aging workforce. However, smaller employers provide greater flexibility for working part-time in retirement. Among companies that provide resources/programs for an aging workforce, 44% with 2 to 499 employees provide part-time employment to retirees, compared to 35% with 500 or more employees.

Smaller employers are less likely to anticipate being affected by the aging workforce. Only 35% of employers with 2 to 499 employees think they will be greatly impacted, compared to 50% with 500 or more employees. One reason could be that employees at smaller companies expect to work until an older age. While the average employee at companies with 500 or more employees is anticipating retiring from full-time work at age 63, the average employee at smaller employers is planning to retire at age 65.

Source: MetLife Press Release (April 7, 2008)

Virginia: Older Dominion Project Releases Survey, Starts Workgroup on Aging Workforce

The Older Dominion Project (ODP), a non-profit initiative by Virginia businesses, government, foundations, and non-profits to help Virginia ride the age wave created in 2007, has released its ODP Residents' & Business Leaders Studies, indicating broad interest across both Virginia's residents and businesses in starting to prepare now for the coming demographic tsunami. Businesses, in particular, are aware of and concerned about the attendant workforce issues:

Business leaders see the aging workforce and impending retirement of aging baby boomers as an issue for Virginia. Sixty-five percent (65%) of Virginia business leaders say the "aging workforce" is a serious issue facing the entire economy--with a third (35%) saying it is a "very serious issue." Two in five (41%) feel the aging workforce is a serious issue for their own organization. In addition, two-thirds (65%) feel that the retirement of a large number of workers in the future is a serious issue for the economy and a third (35%) feel this issue will have a significant impact on their company. Half of business leaders (47%) feel their organizations are prepared to accommodate older workers today. Yet, two in five business leaders (42%) say they are prepared when it comes to knowledge transfer (from one generation of workers to the next).

The surveys were released at an ODP meeting in which five workgroups were organized to tackle the identified issues. As described in the ODP Work Group Initiatives, Workgroup No. 4 is the Workforce Readiness Work Group. This group is charged with "putting plans and policies in place . . . to accomodate these new workforce realities."

Source: Older Dominion Project Press Release (March 27, 2008)

Additional Source: ODP video of ODP presentations (March 27, 2008)

Survey: Small Businesses More Prepared for Aging Workforce

The National Association of Professional Employer Organization (NAPEO) has released the results of a survey showing that 28% of small-business owners surveyed have planned for knowledge transfer from experienced older workers approaching retirement age to other workers. This contrasts with recent recent survey results from Novations that only one-quarter of large organizations are making any effort to transfer knowledge from soon-to-retire baby boomers to other workers and just 4% have created a formal process to pass on know-how.

According to Milan P. Yager, NAPEO's executive vice president, small business owners also know their own value and will not let themselves get caught short when it's time for them to leave: 35% say their own retirement plan is solid and another 10% will have a plan in place by the end of 2008.

In addition, the NAPEO survey reports that the small businesses have more older workers, with 21% saying that at least 5% of their workers are 60 to 64, compared to 16% last year. Furthermore, 37% (compare to 18% in 2007) are delaying retirement, and only 4% said that some workers would retire before age 65.

Source: National Association of Professional Employer Organization Press Release (March 5, 2008)

Europe: Survey Shows More Companies Responding to Demographic Changes, Responsive to Older Workers

According to Adecco Institute, European companies are waking up to the demographic challenge of an aging and shrinking workforce, with an increased number of companies having started to analyze their internal age structure and more large companies planning to hire more employees aged 50 and older in 2008 versus 2007. These are the results of Adecco's second demographic survey: "Facing Europe’s Demographic Challenge: The Demographic Fitness Survey 2007".

Applying its Demographic Fitness Index (DFX), which measures the preparedness of companies to cope with the demographic crunch on a scale of 100 to 400 points, Adecco also shows there is much to be done. Overall, European companies averaged 182 points, with Germany and the UK leading with 186 index points each, followed by Italy (182), Spain (180) and France (174). The DFX measures career management, lifelong learning, knowledge management, health management, and diversity management.

The increase in the number of companies analyzing age structures indicates an increased awareness of the issue: 40 percent of all European firms, up from one third a year ago, have conducted an analysis of the overall age structure of their organizations. Medium-sized firms have demonstrated the most significant improvement over the past year.

However, only in France and the UK has this improved level of knowledge of the age structure, so far, led to an increase in long-term staff planning. In the survey, no European company planned their overall staff needs more than 18 months ahead.

One of the most encouraging findings of the 2007 Demographic Fitness Survey is that more and more of the large European companies are willing to hire older employees. 16 percent intend to hire more older employees in 2008 than in 2007, and the share of companies who plan to hire fewer people over 50 has decreased from 42 percent to 34 percent.

Source: Adecco Institute Press Release (January 31, 2008)

Conference Board Suggests Strategic Business Opportunity in Reinventing Aging Workforce

According to a report from The Conference Board, despite warnings of disaster tied to the impending retirement of the first wave of baby boomers, smart companies can actually benefit from this change in the workforce if they plan carefully. Specifically, companies need to analyze their own employee data. Mary B. Young, Senior Research Associate, The Conference Board, and author of the report, says that is "the only way to accurately forecast whether aging and retirement will impact their workforce and, if so, exactly when and where. Once employers know that, they can take the appropriate actions, rather than under- or over-reacting."

Based on a case-study methodology to investigate the aging workforce and its ramifications, the report--"Gray Skies, Silver Linings: How Companies are Forecasting, Managing, and Recruiting a Mature Workforce"--draws several practical conclusions:

• Organizations can use strategic workforce planning to assess the impact of approaching retirements on their ability to execute business strategy;
• Companies that effectively manage mature workers treat them with respect, discern their needs rather than making assumptions, and offer such benefits as flexible work arrangements, affinity groups, and financial and retirement planning;
• Recruiting mature workers may not even be on the radar screen for some companies, but it's a priority for employers who face a shrinking supply of younger workers, or who want a workforce that mirrors their mature customer base;
• Knowledge transfer from mature and/or retiring workers to younger staff is key to preparing for inevitable retirements; and
• Through partnerships with other employers, government programs and nonprofits, companies can get more bang for their buck when forecasting, managing and recruiting mature workers.

Source: Conference Board Press Release (December 13, 2007)

Urban Institute Panel Discusses Benefits of Working Longer

The Urban Institute conducted a panel discussion focused the "demographic tsunami" that the United States faces as the first wave of baby boomers reaches the age of Social Security entitlement. "The decline in the ratio of working adults to retirees and rising health care costs will strain the federal budget and reduce per-capita economic growth. Increased employment of older Americans could help sustain economic growth and fiscal solvency."

Panelists addressed whether, in light of the recent reversal of the century-long trend toward lower labor force participation rates at older ages and while improved health, jobs' reduced physical demands, relatively lower Social Security benefits, and a continued decline in traditional pension benefits will encourage more people to work longer, will the right jobs for older workers be there? A complete audio recording of the opening remarks of Robert Reischauer, Urban Institute, presentations by Katherine Reynolds Lewis, Newhouse News Service, Eric Toder, Urban Institute, Barbara D. Bovbjerg, U.S. Government Accountability Office, Sharon Masling, Workplace Flexibility 2010, and Cynthia Metzler, Experience Works Inc., as well as a question and answer session is available.

In conjunction with this, the Urban Institute also published:

• "Should People Work Longer, and Will They?" a fact sheet examining the benefits of working longer, the characteristics of today's older workers, and recent changes in older Americans' labor supply. (December 7, 2007)
• "Are Employers Willing to Hire and Retain Older Workers?" a fact sheet examining employers' current attitudes toward older workers and the likely future demand for their services. (December 7, 2007)

Source: Urban Institute "Who Will Hire Me When I'm 64? Challenges in Increasing the Employment of Older Workers (December 4, 2007)

AARP Creates Workfore Assessment Tool

AARP has announced the creation of a new online tool to help employers assess their current and future workforce needs and the impact of an aging workforce. The AARP Workfore Assessment Tool is available free to employers and requires the use of Adobe Reader. The tool automatically generate a report that can help an employer:

• Assess any potential impact the aging workforce will have on the organization;
• Map out current employer practices and identify areas for improvement;
• Provide recommendations on how to maximize the experience of an organization's older workforce; and
• Provide an inventory of workplace strengths that can be used to enhance the employer's brand.

Source: Casa Grande Valley Newspaper "Assessment tool helps employers prepare for aging workforce" (November 20, 2007)

United Kingdom: Engineering Firms Redesigning for Older Workers

The Royal Academy of Engineering has released a study showing that engineering businesses are re-designing the future of work in order to cope with the ageing population. The survey of 208 engineering businesses was commissioned by the Royal Academy to investigate awareness and opinion relating to older employees within engineering based businesses.

According to "Engineering Employers Research 2007," 44% of the firms experienced recruitment difficulties over the last year; 49% believed their workforce would face a shortage of young people over the next decade; and 71% are concerned about the loss of skilled workers as employees retire. In response to this, according to the survey:

• 91% of the firms favor their employees working beyond the age of 65;
• 58% offered re-training to their older workers;
• 36% had increased the pay of older workers to encourage them to stay in employment;
• 46% enabled retirees to return to work; and
• 30% had created a reserve of retired workers who can be called upon to work on discrete projects as and when required.

Source: Royal Academy of Engineering News Release (November 16, 2007)

MetLife Study Provides Case Studies of Companies Successfully Implementing Programs Addressing Changing Workforce Demographics

MetLife Mature Market Institute has released a study exploring what proactive organizations are doing to creatively meet the challenges posed by an
aging workforce, including in-depth case studies about four companies that have successfully implemented programs to address the changing workforce demographics: Boston Scientific, First Horizon Corporation, The Aerospace Corporation and Weyerhaeuser. Among other things, the study provides insights for HR managers on such topics as implementing effective flexible work arrangements, helping older workers successfully transfer knowledge, and devising creative solutions for rehiring retirees.

The study, "Searching for the Silver Bullet: Leading Edge Solutions for Leveraging an Aging Workforce", which was developed in collaboration with David DeLong & Associates, suggests a number of lessons that can be learned, including:

• The need to think of phased retirement or flexible work options as a program, not a policy;
• How to create effective knowledge sharing relationships between older mentors and younger
  workers;
• The need to make knowledge transfer an explicit part of any job when rehiring a retiree; and
• Why companies must stop searching for the “silver bullet” and recognize that there is no quick fix to these workforce challenges.

In addition, the study provides specific tips to help employers:

1. Create and leverage a network of former employees;
2. Rehire retirees indirectly on a project basis when pension restrictions prevent direct re-employment;
3. Hire retirees with special expertise to innovate on critical projects; and
4. Tap the expanding pool of older people seeking employment.

Source: MetLife Mature Market Institute Press Release (November 14, 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)

Survey: New England Employers Not Ready for Replacing Aging Workforce

A survey conducted by the Northeast Human Resources Association (NEHRA) reports that over 85% of all firms did not have a recruiting strategy in place to offset the impending retirement of the baby boomers from the workplace, and only 5% responded that they did have a plan in place. In addtion, the NEHRA's e-Survey on the Aging Workforce shows 83% of respondents as not having a formalized plan to retain retirement-eligible workers. Of the 7% that reported having one in place, 74% reported flex-time was the best tactic to retain these workers, with job sharing ranked second at 26%, and telecommuting third at 40%.

"We are already facing a talent shortage in the New England area, and with the retirement of the baby boomer generation at hand, it will only get worse," advises Dan Henry, Chairman of the Board of NEHRA. "We hope these findings help generate some serious discussions and solutions for local businesses before any real crises occur."

Source: Northeast Human Resources Association "Aging workforce a challenge for most firms in the region, NEHRA survey says" (July 23, 2007)