By Dr. Marie Gould Harper
Program Director, Management at American Public University
So much in the world of work is changing. The idea of retirement has a different meaning than it did a couple of decades ago when the dream was to work, get your gold watch and ride off into the sunset to enjoy retirement.
However, a variety of factors now makes that dream unattainable for many older employees. Also, there are some organizations that are not adequately prepared with a succession plan for the baby boomers who are getting ready to leave the workforce at this time.
Bureau of Labor Statistics Says Labor Force Participation Is Shrinking
Who do we expect to do the work in the near future? How do we pass on organizational knowledge?
According to the Bureau of Labor Statistics, the aging of the baby boom generation has had a dramatic impact on the labor force. In 2000, for example, baby boomers were the prime age group with the highest participation in the labor market.
But during every year since 2000, a segment of the baby boom population has shifted from the prime age group into the “ready for retirement” group. That has led to a lower participation rate in the labor market.
This trend is expected not only to continue but to accelerate between 2012 and 2022. About 35% of the U.S. labor force will be 50 years of age or older in 2022 (up from 25% in 2002).
About 10,000 baby boomers turn 65 every day. Who is going to do the work in the future?
Millennials Are A Large Group in the Workforce, But Often Have Different Career Paths
These days, the U.S. Census reports that millennials are the largest living generation. Although there may be more millennials, that data does not mean they are the biggest group in the workforce or that we should cater to their interests.
Many millennials have opted to start their own businesses and do “gig” work. The greatest talent might not be flocking to traditional organizations as their predecessors did. That change is food for thought.
As the labor market experiences a decline in the number of seasoned employees, the groups that we expect to be in the pipeline to replace them are declining as well.
According to a presentation by the Society for Human Resource Management Foundation, some industries will probably experience an adverse impact on the retirement/skills gap. Those industries include educational institutions, government agencies, healthcare, manufacturing and oil/gas.
Dispelling the Myths around the Value of Older Workers
Older workers still have value. If they want (or need) to stay gainfully employed, companies should encourage their participation and seek out their counsel. These older workers can educate the younger generation about an organization’s history. They can also provide a foundation for their younger colleagues’ corporate success.
For company employees to move forward and grow, they need to know their company’s history and values. What better way is there to orient the next generation than to encourage collaboration and engagement among the various generations in the workforce?
Downsizing Older Workers Often Backfires on Organizations
When downsizing became a corporate trend, many organizations took the easy way out and eliminated positions based on seniority. Why? In most cases, older workers had the highest salaries and getting rid of them saved more money.
However, companies found that using that approach left some unexpected voids, such as experience and loyalty. Many companies have moved to a more analytical approach and now assess the poor or positive performance of business lines as a means of determining what should happen to their employees.
Also, compensation structures and reward programs have changed. Employees may receive more bonuses and other non-financial incentives instead of the traditional annual merit salary increase. In some instances, it is not the senior employees with the highest salaries who earn those bonuses and incentives.
Advantages of Keeping Older Workers
According to the SHRM Preparing for an Aging Workforce Survey, the top five reasons to keep older workers as long as possible are:
- More work experience/knowledge (77% of respondents)
- More maturity/professionalism (71% of respondents)
- Stronger work ethic (70% of respondents)
- Ability to serve as mentors to younger workers (63% of respondents)
- More reliability (59% of respondents)
The survey involved 2,000 human resources (HR) professionals discussing their thoughts and perceptions on how ready their organizations were for the “changing of the guard.” Unfortunately, the results supported the concern that many organizations have not implemented a succession plan on how to transfer organizational knowledge. That lack of planning will lead to skill gaps in their businesses.
Half of the survey’s respondents have started to analyze their workforces and the potential of a skills gap. But only 35% of the respondents have explored what the statistics will mean to their businesses and how they will address their workforce situation when the baby boomers retire. It’s good to have data, but you have to know what to do with the information.
How to Leverage Your Mature Talent Bank
There are several ways to properly leverage your mature workforce talent:
- Get together with peers in your industry to find out how they approach this problem.
- Build a business case for the value of mature workers for your organization.
- Assess how the aging workforce impacts your organization.
- Develop a talent strategy regarding how mature workers will fit into your organization (such as recruitment goals and succession planning milestones).
Many organizations need to recognize the value of mature workers and stop trying to “lead them out to pasture.” Older employees will let you know when they are ready to leave.
Companies can greatly increase organizational value for their employees by creating an internal culture that respects the value of older workers. They can also implement activities that encourage collaboration and engagement among different generations in the workplace.
Remember, according to the Department of Labor, has predicted that the workforce is shrinking. How is your organization going to handle this change and remain effective in the market?
About the Author
Dr. Marie Gould Harper is the Program Director of Management at American Public University. She holds an undergraduate degree in psychology from Wellesley College, a master’s degree in instructional systems from Pennsylvania State University and a doctorate in business from Capella University. She is a progressive coach, facilitator, writer, strategist and human resources/organizational development professional with more than 30 years of leadership, project management and administrative experience. Dr. Gould Harper has worked in both corporate and academic environments.
Dr. Gould Harper is an innovative thinker and strong leader, manifesting people skills, a methodical approach to problems, organizational vision and an ability to inspire followers. She is committed to continuous improvement in organizational effectiveness and human capital development, customer service and the development of future leaders.