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Staffing Management: Courting Senior Workers

Lisa Daniel  7/1/2005

Staffing Management, July  September 2005

Vol. 1, No. 2

Entice older workers by offering the policies and benefits they value.

Doug Miller is trying to avert a staffing crisis. As a marketing executive for Hire.com, which recently was acquired by Authoria, a Waltham, Mass.-based human resources management company, Miller is helping keep Authoria clients from running aground due to impending employee retirements.

Millers challenge isnt unusual. The number of workers in the United States older than 50 is expected to increase 34 percent between 2003 and 2012 to 12.5 million, according to the federal Bureau of Labor Statistics. At the same time, Bureau data show that the number of workers 49 and younger will increase only 3 percent, or about 2.7 million.

The challenge of the aging workforce looms across all industries and sectors. But Authorias clients are feeling the challenge more urgently. Many of them are in the aerospace and oil and gas industries. These industries rely on narrow engineering specialties in areas such as propulsion, radio frequency and petroleum, which have some of the biggest worker shortages. One of Authorias aerospace clients says 62 percent of its engineering staff will be eligible to retire by 2010, Miller says.

The antidote prescribed by Authoria and embraced by its clients is a cocktail of creative hiring and retention strategies, all focused on older workers. Flexible work schedules, phased-out retirements, retention bonuses and mentoring younger workers are some of the ingredients.

These policies can attract skilled older workers in industries where skilled workers of any age are hard to find.

If the only skilled worker you can find is 65 years old, and you can get two years out of [him], thats two years you wouldnt have had a worker, Miller says.

But more and more companies are focusing on hiring older workers, not only because they have to, but also because they want to.

Older Employees Are Assets

Borders Group Inc., the Ann Arbor, Mich.-based retailer, is among 13 American companies that have partnered with AARP to hire and retain workers 50 and older. Borders staffing managers began studying their companys hiring and retention trends against census data in the late 1990s, says Dan Smith, Borders senior vice president of human resources. What they found was that their older workers were one of the companys greatest assets.

Our older workers brought a lot of benefits that even we were surprised by, Smith says. Their turnover rate was 10 times less than those under 30.

Also, he says, Borders internal survey of worker satisfaction yielded much higher contentment among older workers than younger ones.

I think [older workers] make better decisions about coming to work for us, Smith says. Theyve had careers already. They know what they like and dislike, and, when they come to us, they know they want to work for us.

The AARP partnerships started with Atlanta-based Home Depot in 2002 after the home remodeling retailer sought out 30 private and nonprofit hiring partners to help create a staffing pipeline into its more than 1,900 stores, says Cindy Milburn, Home Depots senior director of staffing.

Like Borders, Home Depot battled the retail industrys high attrition rates but also had specific hiring concerns, not only for demographic diversity, but also for skilled workers, Milburn says.

Were looking for skilled and knowledgeable workersmaster plumbers, electricians, experienced kitchen and bath designers, she says.

Home Depots staffing strategy was to set up several partnerships, first with the Department of Labors One-Stop Centers for people seeking work, followed by partnerships with various art institutes, AARP, the military andthe latestwith four national Latino groups.

We have to have pipelines of talent where we build long-term relationships, Milburn says. Its a different recruiting model than traditional retailing.

Until three years ago, Home Depots store managers did their own hiring. While all the stores still have a hiring manager, that setup isnt adequate for strategic hiring with a long-term outlook.

Home Depot has since formed a corporate recruiting team that develops a pipeline of available talent that stores can choose from. The process begins with a software program that weeds out most of the 17 million applications Home Depot receives every year.

But in addition to processing the usual influx of resumes, HR also uses strategic processes to attract older workers and retain those already on staff.

Older Employees Value Benefits, Flexibility

Smith and others say the first step is to understand what older workers value. The answer is a high 401(k) match, good health care benefits that extend to part-time workers and flexibility, according to surveys by AARP and companies named here.

Companies successful at hiring and retaining older workers have responded with better benefits and policies such as insurance premiums that dont consider age or pre-existing conditions; phased-out retirements in which employees gradually work fewer and fewer hours until they leave entirely; and job-sharing programs.

Companies have had to be creative to compete for older workers. Borders partnered with Merrill Lynch to offer a Pension Builder program that allows retirees to buy into a gradual annuity stream. The bookseller also requires all store leaders to take its Generations training course to better understand issues important to those over 50. Managers have broad powers to allow flexible work arrangements and have been known to give snowbird transfers to those workers who move from one home to another depending on the season, Smith says.

Authoria helps its clients entice older workers with retention bonuses and phased-out retirement. At the same time, it uses adjacent talent mapping to find mid-career workers who might transfer into hard-to-fill jobs and asks those who are soon to retire to mentor them, Miller says. Authorias research shows most older workers want less-intensive jobs.

A lot of these people may want two months off a year or to work a three-day workweek, Miller says. Im not sure the 62-year-old worker wants to retire altogether. They want to work when theyre not traveling or enjoying their grandkids. This is the whole notion behind letting them downshift.

But should HR managers worry that they are setting a precedent that they will have to honor for all workers? Companies are less worried about a precedent than they are about losing their core employees, Miller says.

Points to Ponder

There are legal issues to consider when structuring policies and programs to attract older workers. While it is not illegal to fill most part-time positions with older workers, according to AARP, older employees could sue under the Age Discrimination in Employment Act if they are routinely channeled into part-time jobs or not considered for full-time jobs. The problem is magnified if part-time positions are in some way less desirable; for example, if they dont include the same benefits as full-time jobs.

Companies interested in hiring older workers will have to be creative in reaching out to what are primarily passive candidates, HR leaders say.

The first step is to educate senior executives about the value of age diversity, so they carry the banner, extolling older workers whenever possible. Borders Smith says that part of his job was made easy after research showed that half of all books are bought by people older than 45.

Milburn, too, says it wasnt hard to convince Home Depot executives of the importance of hiring and retaining older workers, primarily through its partnerships. Its a business imperative, she says.

A Marketing Imperative

As executives are getting the word out about their companys interest in older workers, company marketers have to find the best outlets for reaching seniors.

Its really all about marketing, Miller says. It could be direct marketing through mail or e-mail or through groups like AARP.

AARP has programs to help seniors find jobs, including an alliance with Monster.com, and says it received hundreds of thousands of inquiries about its featured employers. But older workers often are passive candidates who dont surf job boards or peruse help-wanted ads, even through AARP.

One solution is to market a companys interest in older workers through nonemployment web sites, sites either of general interest to people 50 and older or specific to the job or industry. Home Depot relies heavily on the Internet.

Under the slogan Passion Never Retires, Home Depot markets itself to older workers through its web site and others such as AARP, which has 35 million members. Were trying to constantly drive talented people to our careers web site, Milburn says. Its a real focus on employment branding.

AARP recommends against using references to age when advertising positions, including subtleties such as seeking mature applicants. Another way to target older workers is to write mature judgment preferred.

Another AARP suggestion is to avoid application forms that directly seek the age of applicants, such as date of birth or date of high school graduation.

No matter how companies accomplish it, HR managers say focusing on older workers is something firms should do sooner, rather than later.

I really do believe this is an area where companies that have focused on this before the demographic shift will be better off, Smith says.

For information specific to hiring older workers, visit www.aarp.org and click on Career Page, then For Employers, to see best practices, including a checklist for assessing your companys potential to attract and retain older workers.

Lisa Daniel is a business and career writer based in Burke, Va.

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 AARP Survey Findings

 

for Older Workers

The 2003 telephone survey, Staying Ahead of the Curve: The AARP Working and Retirement Study, of 2,001 randomly selected Americans between the ages of 50 and 70 and produced these findings:

70 percent plan to work at least part time during their retirement years. Almost half foresee working into their 70s or beyond.
 Needing money is the top reason they plan to work beyond retirement age. More than two-thirds also want to work to stay active, be useful and have fun.
 They want to work where their opinions are valued.
They want to set their own hours.
They want to be able to take time off to care for relatives, when needed. More than one-third are caregivers to family members.
About 90 percent say a workplace with a worker-friendly environment is important. 86 percent say staying in the workforce will keep them healthy and active.
80 percent want opportunities to learn something new.
 75 percent want to pursue something they've always wanted to do.