An Aging Puerto Rican Workplace: Implications for Building at 21 st Century Workplace in the Global Market

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1 An Aging Puerto Rican Workplace: Implications for Building at 21 st Century Workplace in the Global Market Deborah Russell, Director, Workforce Issues

2 America s Aging Workforce Significant Demographic Changes in the USA Nearly one in three workers will be 50+ by 2012 Median age of workers 40 Baby Boom generation nearing traditional retirement age

3 Puerto Rico Mean age of expected retirement 64 Puerto Rican 50+ workers (Boomers) expect to work past the traditional age of 65.

4 Projected % Change in Labor Force by Age Group, % 50% 40% 30% 20% 51% 43% 10% 0% -10% 13% 10% 14% -7%

5 Workforce Shortages Nurses and other health professions Teachers Public administration Engineers Scientists Highly skilled professionals

6 Employee Perspective

7 Reinventing Retirement Boomers much less likely to associate retirement with the traditional retirement age of 65. Nearly 70% of workers who have not retired report that they plan to work into their retirement years or never retire. 56% of Puerto Rico residents age 40+ indicate they expect to retire between the ages of 59 and % say they expect to retire between the ages of 68-80

8 Primary Reasons for Working Money Health Insurance Retirement benefits Flexible work arrangements

9 Puerto Rico Maintain health coverage Pay health premiums Build up savings Qualify for Social Security Need/Want income Pay for prescription drugs ECONOMICALLY DRIVEN

10 Why People Think They ll Work in Retirement Pre-retirees age Stay mentally active Stay physically active 87% 85% Be productive or useful 77% Do something fun 71% Need health benefits 66% Help other people Be around people Need money Learn new things 59% 58% 54% 50% Pursue a dream 32% Source: AARP, Staying Ahead of the Curve, 2003: The AARP Working in Retirement Study, 2003

11 Other Key Factors Older workers, particularly the boomers, are striving for work/life balance: 31% of mature workers became responsible for a dependent parent. In Puerto Rico, this extends into other elderly family members 23% had an adult child move back home (Boomerang kids) 16% were providing child care or day care for grandchild

12 Employer Perspective

13 Employers are anxious about the future Lost knowledge can hurt financially Harder to find qualified employees Need to do more to retain workers Need to establish formal programs to address retention and recruitment of 50+ workers

14 Employer Challenge Puerto Rico Finding employees with right skills and qualifications Recruitment/filling key positions Providing competitive benefits/compensation Managing increasingly diverse workforce High/unwanted turnover Risk of knowledge loss with retirement

15 Employer Perspective Positive Perceptions of Older Workers Loyalty and dedication to the company Come to work on time; low absenteeism Commitment to doing quality work Someone you can count on in a crisis Solid performance record

16 Critical Issues for Puerto Rico Employers Finding skilled employees Retraining current workforce Training current workforce Introducing new technology Developing programs to retain employees The aging workforce Retaining institutional knowledge of retiring employees

17 Employer Perspective Negative Perceptions of Older Employees Averse to change Lack experience with new technologies Out-of-date job skills Difficulty reporting to younger bosses Too Expensive

18 The Business Case for 50+ Workers

19 The Business Case for 50+ Workers Debunk the myths employers possess regarding the costs associated with 50+ workers and build a business case for utilizing 50+ workers as one strategy for addressing labor shortages.

20 The Business Case for 50+ Workers Costs Cash compensation Health Benefits Pension Benefits Paid Time Off

21 The Business Case for 50+ Workers Industry Overlay Energy Financial Services Health care Retail

22 The Business Case for 50+ Workers Cash Compensation Tied to market median Cost depends on ability, experience and performance Cash compensation not necessarily tied to age

23 The Business Case for 50+ Workers Health Benefits Health claims for years and dependents equal times the cost of claims for year olds. HR managers are increasingly concerned with behavioral issues that lead to health risks year olds are less likely to have dependent children

24 The Business Case for 50+ Workers Pensions Only 21% of private employers offer DB plans vs. 42% that participate in DC plans DC plans are not age-based

25 The Business Case for 50+ Workers Value part of the Equation Engagement Turnover

26 The Business Case for 50+ Workers Engagement Towers Perrin study shows that 50+ workers are more engaged as they age. Highly engaged workers correlates with overall performance of the company.

27 The Business Case for 50+ Workers Turnover The average tenure among workers is 3.7 years. Median job tenure of 55+ worker is 3.3 times that of year old. Employers often don t see ROI until 3 rd year.

28 Implications for Puerto Rico Employers Offer more flexible work opportunities Survey your employees to determine programmatic opportunities (retention strategy) Institute knowledge retention strategies Partner with senior-focused organizations that can assist with recruitment and championing your brand

29 What s In it For Business? The boomers will reinvent "retirement," working longer either because they want to or they need to. Mature workers offer businesses a unique combination of experience, loyalty, enthusiasm and a strong work ethic. As the workforce ages, businesses that know how to recruit and retain mature workers will gain a competitive edge.

30 Best Practices - Recruitment Brevard Public Schools Retired Principals Volkswagen of America Recruiting from databases Centegra Health Alumni Nurse Program

31 Best Practices - Benefits Busch Entertainment Annual wellness visit Scottsdale Healthcare Backup elder care at nominal cost Principal Financial Health risk assessment Has seen a $260 cost savings per employee Home Depot Offers health benefits to part-time workers

32 Best Practices Flexible Work Stanley Consultants Phased retirement program CVS & Borders Books Snowbird program Mercy Health Part-time, flex-time, seasonal

33 Best Practices Workplace redesign Baptist Health South Florida Hydraulic beds International Trucking Supporting mechanics Pinnacol Assurance Ergonomics program reduced workman s compensation costs by 33%