Aging Workforce Will Challenge HR

Facing a wave of retirements, most businesses have no idea what is at stake.

By Jen Schramm Dec 1, 2014
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1214-Cover.jpgThe Baby Boom generation is still booming in the workplace, with workers ages 55 and older expected to make up approximately 26 percent of the labor force by 2022. That’s up from 14 percent in 2002 and 21 percent in 2012, according to the Bureau of Labor Statistics. But as the proportion of older workers grows, so too does the prospect of a catastrophic loss of knowledge and experience when they retire. Unfortunately, there are signs that HR professionals aren’t fully prepared for this so-called silver tsunami.

In 2014, the Society for Human Resource Management (SHRM) and the SHRM Foundation launched the Aging Workforce Project, a three-year initiative highlighting the value of older workers and identifying best practices for employing an aging workforce. The project, which is supported by a grant from the Alfred P. Sloan Foundation, will investigate current workforce demographics and how they are likely to change in the future.

A key component of the initiative is a SHRM survey of HR professionals that aims to assess how aware organizations are of this impending demographic shift and what, if any, actions organizations are taking to prepare for an aging workforce. Thirty-six percent of respondents said their organizations were beginning to examine internal policies and management practices to address this change. However, one-fifth said their organizations have already scrutinized their workforces and determined that no changes in their policies and practices are necessary. Another fifth indicated that their organizations were just becoming aware of this potential change in the ratio of older workers.

Planning Ahead

How organizations are preparing for the projected increase in the proportion of older workers in the labor force.
Beginning to examine internal policies and management practices 36%
Have determined that no changes in policies and practices are necessary 20%
Just becoming aware of this potential change 19%
Not aware of this potential change 13%
Have implemented specific policies and management practices 6%
Have proposed specific policy and management practice changes 5%
Have agreed on a plan to change policies and management practices 2%
Percentages do not equal 100 due to rounding.

Source: SHRM 2014 Aging Workforce survey report.

Few HR professionals currently believe that the potential loss of talent due to the retirements of aging workers is considered a crisis or even a problem in their industry, the survey found. The lack of concern is surprising, given recent media attention on skills shortages and rising recruiting difficulties.

But it may be partly due to a lack of information about precisely when and how these changes will take effect within a given industry or organization. Only about half of HR professionals said their organizations track the percentage of employees eligible to retire in the next one to two years, and even fewer forecast workforce demographics beyond that time frame. About 20 percent of organizations have conducted strategic workforce assessments involving the loss of workers ages 55 and older that identify future workforce needs and potential skills gaps in the next six years and beyond.

Additional SHRM research will look at how organizations are adjusting their recruiting and retention strategies to target older workers and assess the skills and experience that HR professionals most value in older workers. Overall, the latest findings indicate that businesses can start to address the upcoming skills gap by first filling the knowledge gap about the potential size and impact of the wave of retirements to come.

Jen Schramm is manager of the Workforce Trends program at SHRM.

 
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