Employment Planning for an Aging Workforce Results from an AARP California Survey of Employers By Jennifer H. Sauer, AARP Knowledge Management

Transcription

1 Employment Planning for an Aging Workforce Results from an AARP California Survey of Employers By Jennifer H. Sauer, AARP Knowledge Management California Businesses View of Aging Workforce Trend Results from the AARP California employer survey show that retaining and recruiting skilled employees is are the top two issues facing their organization. Training or retraining the current workforce and developing performance programs follow close behind as issues that are extremely important to California while much less important is addressing the needs of an aging workforce. Highly Issues to California Businesses (N=514 CA Employers) Extremely important Very important Retaining skilled employees Recruiting skilled employees (Re)Training current workforce Developing performance programs Introducing new technology Ensuring a diverse workforce Addressing needs of aging workforce Providing eldercare benefits Developing telecommuting programs Decreasing contract workers Increasing part-time workers Increasing contract workers Planning for Potential Labor Shortage and Boomer Retirements Interestingly, California businesses do foresee a potential labor shortage occurring in their organization within the next five years (extremely likely:12; very likely: 29; somewhat likely: 32). In fact, threequarters (77) of them utilize up to seven of ten possible measures that could prepare their organization from such a worker shortage including improving technology, increasing training opportunities, offering phased retirement, or offering incentives to delay retirement (see Questions 8 and 9). 1 Two-thirds, however, report hiring younger employees as a way to safeguard the business from baby boomers retiring. Fortunately, California businesses do not rely heavily on this tactic. 1 Reporting up to seven measures taken by organizations to prepare for possible labor shortage due to retiring baby boomers was derived from a count of those who said yes to each of the ten measures tested in the survey question. Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 1

2 Addressing an Aging Workforce Is Key to Employee Retention and Recruitment California businesses have good reasons to support the retention and recruitment of older employees. The characteristics that California businesses say they need from all employees are very similar to the qualities that older employees have. Survey respondents say that older employees rank high in their commitment to doing quality work; have good basic skills in reading, writing, and arithmetic; get along well with their coworkers; have reliable performance records and experience; and work well on teams. Top Employee Qualities Desired 2 (n=514 CA Employers) Top Older Employee Qualities 3 (n=514 CA Employers) Avg. Rank Quality Avg. Rank Quality 1 Commitment to quality work 1 Experience in job or industry 2 Basic reading/writing/math skills 2 Loyalty/dedication to company 3 Get along with co-workers 3 Basic reading/writing/math skills 4 Reliable performance record 4 Commitment to quality work 5 Works well on teams 5 Reliable performance record 6 Can count on in crisis 6 Can count on in crisis 7 Customer service oriented/friendly 7 Customer service oriented/friendly **Shaded areas indicate similarities between qualities desired and 50+ employee qualities Value of Organizational Knowledge Retention When workers leave or retire from an organization, they take with them valuable knowledge of instruction and experience. Unless an organization has mechanisms in place to preserve worker knowledge, its loss can negatively affect the organization s capacity to innovate and operate efficiently, and may even increase its vulnerability to competition. 4 California businesses understand this the majority of them report that retaining the knowledge gained by employees before they leave the company is extremely (32) or very important (44), and over half say they experience a major loss of knowledge when an employee retires or leaves the organization (see Questions 10 and 11). Major loss Minor loss Impact of Knowledge Loss with Exiting Employees (N=514 CA Employers) No loss not sure Based on the average response to a 5-point importance scale where 5 is extremely important and 1 is not at all important. 3 Based on the average response to a 5-point good/poor scale where 5 is very good and 1 is very poor. 4 See DeLong, D. (2004) Lost Knowledge: Confronting the Threat of an Aging Workforce. Oxford University Press, Inc. Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 2

3 Accommodating Employees Who Work Past Traditional Retirement Age California businesses are already committed to approaches that accommodate employees who want to work past traditional retirement age. Some business leaders say they are already training their employees to upgrade skills and addressing diversity issues, while others are planning to use these approaches within the next five years. Still others would consider using approaches within the next five years like shifting employees from one track to another, allowing employees to transfer to jobs with reduced pay and responsibilities, reducing work schedules, or providing part-time work without benefits. Moreover, many employers report currently offering a variety of benefits that may be favorable to an employee age 50 or older half or more say they offer a defined benefit pension, retiree health benefits, or long-term care insurance with seven in ten or more offering prescription drug coverage. Approaches California Employers Currently Use /Would Consider Using to Accommodate Non-Retiring Employees (N=514 CA Employers) Current using/planning Consider using Benefits offered By California Employers 5 (N=514 CA Employers) Yes No Upgrading employee skills K investment plan Hiring retired employees Addressing age bias/diversity Reducing work schedules Prescription drug coverage Long-term care insurance Transfering jobs Retiree health benefits Shifting career tracks Providing part-time with benefits Providing part-time w/o benefits Defined benefit pension Elder-care benefit/leave Multiple response question. percentages will not add up to 100 percent. Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 3

4 Summary of Survey Findings While California employers responding to this survey say that addressing the needs of an aging workforce follows retaining and recruiting skilled workers and professional training and development, the data from this survey clearly indicate that value pre-retirement employees and are currently providing workplaces and benefits than pre-retirees would find appealing. Respondents to this survey indicate that their employees ages 50 or older largely exemplify the top desired qualities they want in an employer and the majority understand the negative impact a retiring employee can have on a business if no practice or system is in place to harness that employee s knowledge and experience. Moreover, many California employers are using or would consider using proposed approaches that may be accommodating to non-retiring employees such as upgrading employee skills, hiring retired employees, address age bias, and allowing or offering alternative work styles or schedules. California employers in this study also report that their organization currently offers benefits that may be more appealing to worker age 50 or older than to younger workers such as prescription drug coverage, long-term care insurance, and retiree health benefits. Virtually all organizations face a loss of institutional and expert knowledge with the departure of retiring or departing employees that can often cost them the competitive edge they need to remain successful in the marketplace. Clearly, many businesses in California, however, will need some help with planning for a change in workforce demographics. Survey results show that responding employers in California turn to the EEOC, U.S. Department of Labor, state employment agencies, management consulting firms, AARP, or private employment agencies for information on issues related to the 50+ employee. Together these private and public organizations can and should collect and provide information on older employees such as retirement planning, knowledge sharing, retraining, part-time work with benefits, age discrimination, or phased retirement. This survey provides a unique glance at the opinions of employers from a variety of industries across the state of California. AARP in California may want to next consider additional research that delves more deeply in particular areas covered in this survey as well as investigate the workplace opinions and needs of 50+ workers in the state. Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 4

5 What can California employers do to recruit and retain 50+ workers? According to the Bureau of Labor Statistics, nearly one in three U.S. workers will be age 50 or older by 2014 a projected growth rate of more than 30 percent from 2005 to 2014 compared to less than half a percent of projected growth rate for younger workers ages 16 through A recent synthesis best practices, case studies, and research by Towers Perrin for AARP provides businesses with recommendations to help them contend with a potential labor shortage and an aging workforce trend. Some of these recommendations are as follows: Businesses must recognize and address the emerging aging workforce. Seek out and analyze workforce demographics and labor statistics to determine how this trend might affect particular industry sectors and organizations. Businesses should analyze current turn-over rates and number of employees expected to retire. Consider the benefits and costs of hiring from outside labor pool versus increasing benefits and knowledge retention and mentoring programs that may help retain skill employees. Inventory current talent pool and future need. Consider increasing outreach to the external 50+ talent pool to fill open slots rather than maintaining an applicant pool consistent with the demographics. Align workplace policies and culture to incorporate the key needs and considerations that motivate a 50+ worker to join or stay with an organization. Dismiss age-related myths. Seek information on cognitive and skill development at different age levels. The notion that older workers are not as motivated as younger workers, inflexible, uncreative, or unable to learn new technologies is myth, not fact. What do employees want? Consistent with data reported in 1998 by AARP, most Baby Boomers (79) say they expect to work in retirement. 7 While financial necessity and health benefits are a primary reason older employees continue to stay in the workforce, non-financial benefits of employment such as the wish to work for enjoyment, the desire to stay physically and mentally active, and the need to have something to do are important as well. 8 In 2003, AARP asked people across the nation age 50 or older what they viewed as important job attributes. Working retirees and pre-retirees planning to work into retirement noted the following as very important workplace attributes: Employee opinion is highly regarded Allows employees to delay retirement until ready Provides family care-giving leave or time Offers flex-schedules and work arrangements Offers phased retirement program Health benefits and retiree health benefits Pension program Professional and skill development New experiences 6 U.S. Bureau of Labor Statistics: Projections for Civilian Labor Force, Retrieved from 7 Roper ASW for AARP (2004) Baby Boomers Envision Retirement II: Survey of Baby Boomers Expectations for Retirement 8 Brown, S.K. (2003). Staying Ahead of the Curve 2003: The AARP Working in Retirement Study. Washington, DC: AARP. Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 5

6 Methodology In May 2006, AARP commissioned Alan Newman Research, Inc. to conduct a survey of California employers. AARP selected to use a web survey as the data collection mode for this study because of the convenience and scheduling flexibility this afforded respondents, as well as the ability to administer a more in-depth questionnaire. In the end, ANR completed 514 interviews with HR Executives, HR Directors, HR Specialists, HR Generalists, Managers of Compensation, or other individuals responsible for recruiting or hiring employees, managing benefits, supervising training, or conducting dispute resolution between employees, management, and/or unions. In order to qualify for this study, employers had to have at least 50 full-time employees and be located within the state of California. Eligible businesses were initially identified based on sample information. However, all respondents were re-screened based on job title, company location, and number of full-time employees. Soft quotas were set to ensure representation across seven California regions as well as to ensure variation in company size. Two unique sample sources were utilized for this study - e-rewards and infousa. Each e- Reward invitation included a unique URL which would open a browser window directly to the beginning of the survey. All records purchased from infousa were initially contact by phone. The web survey was accessible to respondents from June 7 through August 16, Phone recruiting began July 2, Up to 5 call attempts were made per number. In all, 3,207 responded to the e-rewards invitation and 461 completed the survey. Based on the sample of businesses with 50 or more employees from infousa, 642 qualifying phone contacts were made and 53 surveys were completed via the internet. A total of 514 surveys were completed. Due to the mixed-mode method of data collection, and because the majority of respondents to this survey were panel participants, no estimates of sampling error were calculated. 9 The results reported here are based on un-weighted data as the weighting scheme showed in many instances insufficient case numbers to provide well founded weights. The annotated survey shows the response proportions to all questions. Percentages may not add up to 100 percent due to rounding or multiple responses allowed. Questions about this survey should be directed to Jennifer Sauer (202) or jsauer@aarp.org. 9 As recommended by the American Association of Public Opinion Research, Reporting Margin of Error or Sampling Error in Online and Other Surveys of Self-Selected Individuals. Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 6

7 Employment Planning for an Aging Workforce Annotation of an AARP California Survey of Employers By Jennifer H. Sauer, AARP Knowledge Management Un-weighted n=514 (Percentages may not total 100 due to rounding.) S1. Are you the senior level executive responsible for making human resources decisions? 56 Yes 43 No [TERMINATE] 1 DON T KNOW / NOT SURE [TERMINATE] S2. Excluding contract or contingent employees, approximately how many full-time employees does your company have in all locations in California? 0 Less than 50 [TERMINATE] ,000 or more 0 DON T KNOW / NOT SURE S3. Excluding contract or contingent employees, approximately how many part-time employees does your company have in all locations in California? 43 Less than ,000 or more 8 DON T KNOW / NOT SURE S4. At what age do you begin to consider someone an older employee? years years years years S5. Approximately what percentage of your company s workforce across all locations in California is age 50 or older? [RECORD ACTUAL PERCENTAGE] 7 5 is is is is is is is is 50+ Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 7

8 1. In your opinion, how important are the following issues to your organization? [RANDOMIZE LIST ORDER] Extremely Very Somewhat Not Very Not At All a. Recruiting skilled employees <.5 b. Retaining skilled employees c. Training/retraining your current workforce <.5 d. Introducing new technology into your workplace e. Developing programs to improve employee performance <.5 f. Addressing the needs of an aging workforce g. Increasing the number of part-time employees h. Developing programs for telecommuting or at-home workers i. Increasing the number of contract employees j. Decreasing the number of contract employees k. Ensuring a diverse workforce l. Providing eldercare benefits/leave Thinking about the needs and culture of your organization, how important is it that all employees possess the qualities listed below? [RANDOMIZE LIST ORDER] Extremely Very Somewhat Not Very Not At All a. Commitment to doing quality work b. Ability to get along with co-workers c. Willingness to be flexible about doing different tasks... d. Loyalty and dedication to the company e. Someone you can count on in a crisis f. Experience in the job or industry g. Basic skills in reading, writing, and arithmetic <.5 h. Ability to work well on teams <.5 i. Ability to handle multiple projects j. A reliable performance record k. Individual initiative l. Having up-to-date job skills <.5 m. Willingness to learn new technology <.5 n. Willingness to try new approaches to problems Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 8

9 o. Willingness to participate in training or retraining programs p. Willingness to travel q. Creativity r. Ability to interact well with customers/ public (be customer service oriented) Based on your knowledge and experience, how would you evaluate employees at your organization that are age 50 or older on each of the qualities listed below? Please provide your overall impression of the employees at your company that fall into this age group. [RANDOMIZE LIST ORDER] Very Very Good Good Fair Poor Poor a. Commitment to doing quality work <.5 b. Ability to get along with co-employees c. Willingness to be flexible about doing different tasks d. Loyalty and dedication to the company e. Someone you can count on in a crisis f. Experience in the job or industry <.5 g. Basic skills in reading, writing, and arithmetic <.5 h. Ability to work well on teams i. Ability to handle multiple projects <.5 j. A reliable performance record <.5 k. Individual initiative <.5 l. Having up-to-date job skills m. Willingness to learn new technology n. Willingness to try new approaches to problems o. Willingness to participate in training or retraining programs p. Willingness to travel q. Creativity r. Ability to interact well with customers/public (customer service oriented) <.5 [Questions 4 and 5 were open-ended questions deleted from the survey during the pre-test. In the interest of time, and in order to prevent programming and survey pattern errors, the remaining question numbers remained unchanged.] Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 9

10 6. For the following please indicate whether finding qualified applicants has been easier, more difficult, or about the same as it was five years ago. [RANDOMIZE LIST ORDER] Easier. About the Same More Difficult Not Sure a. Qualified applicants for management positions b. Qualified applicants for supervisory positions c. Qualified applicants for non-management and non-supervisory positions d. Current employees qualified for promotion to jobs of higher grade or responsibility In your opinion, within the next five years, how likely is it that your company will face a shortage of qualified workers? 12 Extremely likely 29 Very likely 32 Somewhat likely 21 Not too likely 6 Not at all likely 2 Not sure 8. Baby Boomers, or those born between 1946 and 1964, are approaching traditional retirement age. Their retirement may create a shortage of employees since the generation following them is much smaller. Has your organization taken any steps to prepare for this possibility? Yes No Not sure [QUESTION 8 AND 9 WERE COMBINED PRIOR TO FIELDING IN ORDER TO REDUCE REDUNDENCY.] 9. Has your organization done any of the following to prepare for a potential shortage of workers as a result of baby boomers retiring? [RANDOMIZE LIST ORDER] Yes No Not Sure a. Hire younger employees b. Hire older employees c. Increase training opportunities d. Change recruitment efforts e. Conduct workforce planning f. Improve technology g. Re-hire our retired employees h. Offer incentives to delay retirement i. Offer alternative work arrangements such as part-time work, job sharing, or telecommuting j. Offer phased retirement k. Other [SPECIFY]... Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 10

11 10. How much knowledge loss do you think occurs when employees retire or otherwise leave your organization? 51 A major amount 42 A minor amount 3 None 4 Not sure 11. In your opinion, how important would you say it is to retain the institutional knowledge that might be lost when employees retire or leave? 32 Extremely important 44 Very important 18 Somewhat important 4 Not too important <.5 Not at all important 2 Not sure 12. Does your organization have a formal process that enables employees who retire or otherwise leave to share the knowledge they have obtained on the job? 35 Yes 50 No 15 Not sure 13. Organizations use different approaches to accommodate employees who want to work past traditional retirement age. For EACH of the following strategies, please indicate whether your organization is [RANDOMIZE LIST ORDER] IN THE NEXT 5 YEARS DO YOU. Currently Use and Plan to Use Not Using but Plan to Not Using but Would Consider Not Using & Won t Consider Using Not Sure a. Enabling employees to ease into retirement by reducing their work schedules b. Shifting employees from one career track to another career track... c. Providing training to upgrade skills of employees d. Hiring retired employees as consultants or temporary employees e. Providing opportunities for employees to transfer to jobs with reduced pay and responsibilities f. Providing part-time work arrangements without continuation of benefits g. Providing part-time work arrangements with continuation of benefits h. Addressing age bias issues in the workplace by offering programs such as mentoring or diversity training i. Other : [SPECIFY]... Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 11

12 13. Have you ever sought any information on the following issues for employees age 50 or older? [RANDOMIZE LIST ORDER] Yes No a. Phased retirement b. Alternative career tracks c. Retraining d. Age discrimination e. Retirement planning f. Part-time work with benefits g. Knowledge sharing h. Other [SPECIFY] Have you sought information on any of the issues listed above from the following organizations? [RANDOMIZE LIST ORDER] Yes No a. Private employment agencies b. U.S. Department of Labor c. State employment agencies d. Chamber of Commerce e. AARP f. Equal Employment Opportunity Commission (EEOC) g. Management consulting firm h. Society for Human Resource Management (SHRM) i. Other [SPECIFY] Have you ever heard of or read about AARP s Best Companies for Older Workers recognition program? 30 Yes 62 No 9 Not sure About Your Organization The following questions are for classification purposes only and will be kept entirely confidential. 16. Is your organization headquartered in the State of California? 77 Yes GO TO QUESTION No Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 12

13 17. Where is your organization s headquarters? Please include city, state, and zip code. [WRITE IN CITY, STATE, AND ZIPCODE] 18. Where in California State is your office located? [WRITE IN CITY, COUNTY, AND ZIPCODE] 19. Which of the following best describes the primary nature of your organization s business in California? 13 Business/Professional Services 3 Telecommunications 3 Entertainment/Theater/Performing Arts 13 High Tech/Computers 6 Financial/Insurance/Real Estate 10 Health Services 1 Utility 4 Retail 9 Manufacturing 8 Education 1 Publishing 5 Nonprofit 3 Hospitality 0 Construction 21 Other [SPECIFY] 20a. And into which of the following SIC industry categories does your company fall? 3 Agriculture, Forestry, and Fishing 1 Mining 3 Construction 13 Manufacturing 6 Transportation, Utilities, Communication 5 Wholesale trade 7 Retail trade 9 Finance, Insurance, Real Estate 5 Services: Non-Professional 32 Services: Professional 9 Public Administration 6 Other [SPECIFY] Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 13

14 20b. And in as much detail as possible, please describe what your company does? 21. In the past five years, did your company experience any of the following occurrences: [RANDOMIZE LIST ORDER] Yes No a. Filed for bankruptcy b. Merger with another company c. Acquired another company d. Generated spin-off company(ies) Is your company the OUTCOME of any of the following occurrences in the past five years: [RANDOMIZE LIST ORDER] Yes No a. A merger with another company b. An acquisition by another company c. A spin-off d. A start-up company Currently, about how many people work permanently, either full-time or part-time, and temporarily as seasonal or contract employees for your organization in the state of California? Full-time Part-time Temporary Number of employees a b c d As a percentage of your permanent workforce, approximately what was your organization's turnover rate in California for 2004? More than Not sure Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 14

15 25. In the past year, what percentage of your employees who work in the State of California and are age 50 or older work either full-time or part-time or are temporarily, seasonal, or contract employees? Full-time, permanent? Part-time, permanent? Temporary, seasonal or contract work? Does your organization offer any of the following retirement benefits? [RANDOMIZE LIST ORDER] Yes Not sure a. Retiree health benefits b. Defined benefit pension c. 401K investment plan d. Prescription drug coverage e. Long-term care insurance f. Elder-care benefits/leave Does your organization abide by retirement policies set forth by labor unions or the federal government? Yes 16 Yes, we employ labor union retirement policies 29 Yes, we employ federal government policies 14 Yes, we employ labor union and federal government retirement policies 21 No, we do not employ labor union or federal government retirement policies 21 Not sure 28. What percentage of your employees who work in the State of California are currently eligible for retirement benefits through your company? No retirement benefits offered 19 Not sure No Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 15

16 About You 29. Which of the following best describes your position in the organization? 12 Key Executive/President/CEO/Chairman/Owner 26 Human Resources Professional/ Human Resources Manager or Director 48 Other Manager/Director/Officer 14 Other [SPECIFY] 30. What is your age? 10 Under or older Employment Planning for an Aging Workforce: Results from an AARP California Survey of Employers 16

17 AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. We produce AARP The Magazine, published bimonthly; AARP Bulletin, our monthly newspaper; AARP Segunda Juventud, our bimonthly magazine in Spanish and English; NRTA Live & Learn, our quarterly newsletter for 50+ educators; and our website, AARP Foundation is our affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. AARP staff from the California State Office, Office of State and National Initiatives (SNI), the Public Policy Institute, and Knowledge Management contributed to the design and implementation of this study. Special thanks go to AARP California staff including Tom Porter, Charee Gillens, and Nina Weiler; the late Bill Anderson (SNI); Sara Rix of (PPI); and Clare Hushbeck of State Affairs; Rachelle Cummins, Jennifer Leslie, Darlene Matthews, Joachim Bruess, Regina Sims, Joanne Binette, and Jim Barnett of Knowledge Management; Robin Cohen of Procurement and Contract Management; and Michael Schuster of General Counsel. Jennifer Sauer designed the survey and wrote the report. Copyright 2007 AARP Knowledge Management 601 E Street NW Washington, DC Reprinting with Permission For more information about this survey please contact Jennifer H. Sauer at: or jsauer@aarp.org