Survey: Many Organizations Unprepared for Aging Workforce

Challenge for HR is to educate leaders on advantages older workers bring to the workplace

By Kathy Gurchiek Jan 13, 2015
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Few U.S.-based employers are making a concerted effort to change their strategies in order to recruit and retain older workers, even as many employees in their workforces approach and reach retirement age, according to a survey the Society for Human Resource Management (SHRM) conducted with 1,913 U.S.-based employers.

Only 3 percent of organizations report having a formal strategy to recruit older workers and only 4 percent have a formal retention strategy for this demographic.

SHRM released the survey results in its report Preparing for an Aging Workforce on Jan. 13, 2015. About one-half of HR professionals said they did not think the potential loss of talent during the next one to two years would have an impact on their industry or organization, but one-third indicated they believed it would be a problem or a crisis in the next six to 10 years. SHRM’s research comes as more than 75 million Baby Boomers reach retirement age.

“By 2030, when all Baby Boomers will have turned 65, fully 18 percent of the nation’s population will be at least that age,” the Washington Post reported in July 2014, citing Pew Research Center population projections. Referencing a Social Security Administration report and the Pew Research Center findings, the Post noted that by contrast, “today, just 13 percent of Americans are ages 65 and older.”

It’s not that there are not enough members of Generations X and Y to replace older workers.

“Gen X and the Millennials are well-educated generations. It’s just that the need for skilled, educated and experienced workers is going up and up,” explained Jennifer Schramm, SHRM’s manager of workplace trends and forecasting.

She pointed to a SHRM Foundation report, The Aging Workforce: Leveraging the Talents of Mature Employees, which noted that the population of younger workers with the education and skills to replace Baby Boomers is not large enough—or growing fast enough—to make up for the older generation’s departure.

“This is why [employers] will want to hold onto their experienced and skilled older workers as long as they can,” Schramm said.

Pew noted that in the U.S., the age of the population has been reflected by what demographers call an “age pyramid,” which is now morphing into an “age rectangle.” By 2060, the U.S. will have almost as many Americans over age 85 as under age 5 as a result of longer life spans and lower birth rates.

“Convincing workers to delay retirement and stay in the workforce will be an important HR responsibility in the years ahead, but preparing for these changes could be challenging if managers and organizational leaders do not lend their support in these efforts,” SHRM and the SHRM Foundation wrote in the report.

The survey for the Preparing for an Aging Workforce report was administered to randomly selected SHRM members from May-July 2014 as part of a three-year national Aging Workforce Initiative underwritten by the Alfred P. Sloan Foundation.

A minority of HR professionals indicated that their organization had analyzed the impact of workers ages 55 and older leaving their organization (17 percent), identified their future workforce needs (21 percent) or identified potential skills gaps that may arise (20 percent) within the next six to 10 years.

The challenge for HR, according to the report, is educating leaders and managers on the benefits and opportunities older workers offer employers. More work experience, maturity/professionalism, a stronger work ethic, and skills in writing in English were the qualities employers most valued in older workers, the survey found.

While some older workers are staying in the workforce longer because of the impact of the Great Recession, employers should not be lulled into complacency and neglect to change their recruitment and retention strategies, cautioned Evren Esen, director of SHRM’s survey programs.

Nearly two-thirds of HR professionals said their organizations employ older employees who have already retired from other companies or careers; 46 percent of those employees are a mix of full- and part-time workers, 43 percent are full-time employees and 11 percent are part time.

About one-fourth of HR professionals also said that it was “difficult” or “extremely difficult” to recruit qualified older workers at the executive and management levels, as well as in professional roles such as engineer, nurse and analyst, compared to other workers.

“The demographic change already is becoming an issue in industries such as health care, higher education, and gas, oil and mining, and it’s not going away,” Esen said in a news release.

Power Engineering magazine reported that “about 40 percent of the workforce at America’s electric and natural gas utilities will be eligible for retirement in the next five years and about 20 percent are eligible now.” It noted that “some utility companies are encouraging their older workers to delay retirement or are hiring them as contractors.”

“Workforce planning is important,” Esen added “… particularly in the context of an aging workforce.”

Formal, Informal Strategies

More than half of employers have conducted a strategic workplace planning assessment with older workers in mind to identify future workforce needs (58 percent) and future skills gaps (52 percent) for the next 1-2 years. More than two-fifths, however, reported they are not changing their retention, recruiting or general management policy practices.

The following were found to be “very effective” strategies by the majority of respondents whose organizations have taken specific action to recruit and/or retain older workers:

Starting flexible scheduling, such as telework and alternative work schedules.

Offering reduced hours or part-time positions.

Hiring retired employees as consultants or temporary workers.

Employee referrals was the most commonly cited recruitment method to target workers ages 55 and older.

Among those using social media to recruit older workers, 74 percent use LinkedIn and 49 percent use Facebook to find job candidates.

More than three-fourths (77 percent) of respondents were at U.S.-based operations, 61 percent worked for organizations that have more than one location and nearly half were at privately owned for-profit businesses.

Kathy Gurchiek is the associate editor at HR News. Follow her @SHRMwriter.

Related SHRM Article:

When Workers Won’t Retire, Challenges Arise, SHRM Online Benefits, December 2014

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