Keeping Seniors Connected to the Labor Market: Trends, Challenges, and Benefits IPMA-HR International Training Conference October 3, 2007
Keeping Seniors Connected to the Labor Market Demographic Trends Labor and Talent Shortages The Workforce of Tomorrow What Can Employers Do? What are Public HR managers doing to prepare?
The U.S. Population is Aging
As America Ages, So Does the U.S. Workforce Baby Boomers comprise 46% of today s U.S. workforce; oldest turned 60 last year. 78 million Baby Boomers (born 1946-1964) At the same time, U.S. workforce growth is slowing Source: U.S. Census Bureau, Bureau of Labor Statistics
Change in U.S. Population, 1950-1960 by Age Group 40 36.8 34.5 % Population Change 30 20 10 0 9.9 11.9 17.9 16.6-10 14 & under -4.6 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 & older
Change in U.S. Population, 1960-1970 by Age Group 50 48.7 40 % Population Change 30 20 10 0 3.3 10.5 13.3 19.6 20.6-10 14 & under -4.4 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 & older
Change in U.S. Population, 1970-1980 by Age Group 50 46.4 40 % Population Change 30 20 10 0-10 -20-11.5 14 & under 16.3 10.7-2.2 16.2 27.1 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 & older
Change in U.S. Population, 1980-1990 by Age Group 50 46.1 40 % Population Change 30 20 10 0-10 -20 5 14 & under -12.8 16.4 9.9-2.7 21.7 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 & older
Change in U.S. Population, 1990-2000 by Age Group 55 50.3 45 % Population Change 35 25 15 5 11.8 5.8 20.6 15 12.6-5 -15 14 & under -7.6 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 & older
Projected Change in U.S. Population, 2000-2010 by Age Group 50 45.3 40 % Population Change 30 20 10 0-10 -0.9 9.5-4 15.6 12.6-20 14 & under -14.7 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 & older
Projected Change in U.S. Population, 2010-2020 by Age Group 40 35.1 30 % Population Change 20 10 0-10 8.6-0.6 12.1 2.8 18.2-20 14 & under -13.4 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 & older Source: U.S. Census Bureau
Labor and Talent Shortages are Projected
Examples of Critical Industry Workforce Shortages Utilities: The average age of the utilities workforce in the U.S. is 48; as many as half of the industry s technical workers may be eligible to retire in the next 5 years. (Center for Energy Workforce Development) Education: The proportion of K-12 teachers who are 50 years of age and older has risen from 24% in 1996 to 42% in 2005. Forty percent of the current public school teaching force expects not to be teaching five years from now. (National Center for Education Information) Healthcare: The average age of the RN population in March 2004 was 46.8 years of age (American Association of Colleges of Nursing)
Retirements to take a toll on the Federal Government Average age of federal civilian workforce 45.5 Nearly one-half of the federal workforce could begin retirement in 2008 at age 55 OPM reported that nearly 60% of the government s 1.6 million white-collar employees and 90% of roughly 6,000 federal executives will be eligible for retirement over the next decade.
As well as State Government Anticipated State Government Retirements in the next decade Washington Maine Tennessee Michigan Pennsylvania New Jersey New Mexico North Carolina Illinois Idaho Oregon 3.6% 11.6% 17.1% 16.8% 19.7% 33.6% 63.7% 59.4% 58.0% 55.9% 54.0% 0% 10% 20% 30% 40% 50% 60% 70% Source: Government Performance Project Survey of 37 States
The Public Sector Workforce Is Older than the Private Sector Workforce According to the Census Bureau, in 2006, 69% of the federal workforce was over 40 years old, compared to 48% of the private sector workforce. For state government: 60% For local government: 64%
The Workforce of Tomorrow? Gray matters
There will be more older workers According to the Census Bureau, nearly one quarter of Americans from 65 to 74 23 percent were either working or looking for work in 2006, up from 19.6 percent in 2000.
There will be fewer younger workers Generation X, which follows the Boomers, is a smaller group 26% of the workforce, according to the Census Bureau Younger generations (X and Y) have different attitudes about careers and job satisfaction
There will likely be more Individuals with disabilities in the workplace Older workers, who will make up a larger proportion of the future workforce, are more likely to have disabilities than younger workers. According to SHRM, technology that supports workers with disabilities is growing more affordable and sophisticated, making workers with disabilities more attractive to employers.
The number of immigrants in the workforce will likely increase Between 1970 and 1980, new immigrants accounted for 10% of labor force growth. Between 1990-2001, new immigrants accounted for 50% of labor force growth. Without new immigrants, the labor force would have experienced no growth in New England and the New York region. (In the fast-growing southern and Rocky Mountain states, however, which drew population from elsewhere in the country, immigrants had less of an effect.) Source: Northeastern University Center for Labor Market Studies
Challenges for HR: Managing Workplace Diversity More cultures, religions and languages will be represented in the workplace More generations are and will be working together, which could present challenges in terms of different styles of work and different benefit concerns
Mature Workers have a prominent role to play in the country s economic growth Benefits for Workers: Less reliance on public supports Greater financial security (continue earning and saving) Better physical and mental health, lower mortality rates Benefits For Business: Retain knowledgeable, skilled and experienced employees Benefits to Communities: Reduced strain on government programs, services and benefits
A Work-Filled Retirement 67% of U.S. workers surveyed plan to work full time, part time, or start a business in retirement. Only 13% expect to stop working entirely. 12% say they can never retire. Source: A Work-Filled Retirement: Workers Changing Views on Employment and Leisure, from Work Trends #16 (2005), Heldrich Center for Workforce Development/Rutgers.
A Work-Filled Retirement 35% currently save nothing to supplement expected Social Security payments. 18% of workers plan to work part time in retirement because they need the income, up sharply from 10% in 2000. Among those who retired but are still in the workforce, 54% said they went back to work because they needed the income. Only 27% now plan to work part time out of interest or for fun, down from 42% in 2000.
But Not All Mature Workers Can Work, Want to Work, or Find it Easy to Get A Job Many unable to work past retirement age (mandatory retirement, physical strain/disability) Many unable to find flexible work options Many don t want to work Many find themselves competing with experienced peers for later-in-life employment
And, many are unable to find employment Takes longer for older workers to find new jobs 25.8 weeks vs. 18.9 for younger workers Harder for older workers to regain wages after a job loss Older workers more likely to drop out of the labor market altogether following job loss Source: Bureau of Labor Statistics
What Can Employers Do? Expand Their Recruitment Efforts To cope with potential labor shortages, employers may need to expand their efforts to reach: Youth Women Laid-off workers Older workers Welfare recipients Veterans Persons with disabilities Ex-offenders
What Can Employers Do? Increased Emphasis on Retention In the SHRM 2004-2005 Workplace Forecast, retention issues did not appear on HR professionals list of top 10 concerns. In 2006, an emphasis on developing retention strategies for current and future workers was the employment trend rated most likely to have a major impact on the workplace. This includes: Retaining baby boomers Retaining those likely to replace them
What Can Employers Do? Succession Plans and Flexible Workplaces 74% of employers said they have already or plan to develop succession plans and replacement charts 62% plan to provide flexible scheduling (job-sharing, tele-work, etc.) 50% of employers said they plan to provide opportunities for workers to transfer to jobs with reduced pay and responsibilities 49% plan to create or redesign positions that allow near-retirees to ease into retirement (phased retirement, bridge employment) (Source: SHRM Workplace Forecast 2006)
What Can Employers Do? Increased Emphasis on Training 83% of employers surveyed by SHRM said they plan to invest more in training and development to boost skill levels of current employees, including both training in basic skills and specialized skills 84% of employers said they plan to provide continuous skills training for incumbent workers (to update workers skills and keep workers ahead of the curve) 71% of employers surveyed said they plan to make greater investments and make more use of e-learning 44% of employers surveyed said they plan to increase their involvement in local, state and national workforce readiness and development initiatives (Source: SHRM Workplace Forecast 2006)
Have you given much thought to what kind of job you want after you retire?
www.heldrich.rutgers.edu