If you employ a large number of baby boomers or even have a handful of older workers who hold critical jobs within your organization, this is your wake-up call.
The demographics of this generation born from 1946 to 1964 are compelling. Within five years 20 percent of all US workers will be 55 and over and the median age of the workforce will be 41, a class of workers protected by the Age Discrimination in Employment Act.
At the same time the numbers of workers ages 25-44 are expected to decline by 3 percent leaving a shrinking pool of younger workers to replace retiring baby boomers.
“To think you can replace a retiree with a new worker, well, the numbers won’t be there even if the skills would be,” said Mary Beth Marshall, executive director of the DuPage Work Force Board, one of more than 600 state and local boards nationwide that provide workforce development, education and leadership in their communities.
“We can train all the people we want, but if you’re losing them out the back door, it’s not going to make any difference.”
Experts in academia who have monitored the trends agree.
“It’s affecting different organizations in different ways because of the industry they are in and the occupations that are important to that organization,” said Marcie Pitt-Catsouphes, director of The Center on Aging & Work at Boston College, and co-author of The National Study of Business Strategy and Workforce Development.
Critical shortages of experienced workers are forecast in many industries, including health care, education, transportation and logistics, utilities and technology.
“We have been working with AARP (American Association of Retired Persons) to get some visibility on this issue in the technology industry,” said Steven Ostrowski, director of corporate communications for CompTIA, an Oakbrook Terrace-based business association of individuals and organizations in technology, and member of AARP’s Alliance for an Experienced Workforce.
“This is a national issue and everyone will face it. Every industry will be competing for a smaller pool of talent and the qualified workers will be golden. If the trend continues, these workers will have the upper hand.”
According to Tim Wollerman, manager of workforce information at AARP, the aerospace and science industry will also be impacted not only because of the aging of the workforce, but also because younger people are not entering the same aerospace and science tracks as the older generation.
Darlene Ruscitt, regional superintendent for DuPage Regional Office of Education, has also noticed this trend.
“We have pockets of (teacher) shortages at the high school level, particularly in advanced math and science classes,” she said.
“We are aware that this is a national issue and a special issue for us,” said Don Schmitt, director of human resources at Argonne National Laboratory, where the average age of the science and technology workforce is 48. “Some experts have projected a more significant problem in terms of whether the U.S. will remain competitive in science and technology. Even if we didn’t have the huge cohort of boomers retiring there will be issues of filling the pipeline.”
A consortium of nine workforce boards of metropolitan Chicago are managing a Critical Skills Shortages Initiative which was launched statewide in 2003 by the Governor’s Office and the Department of Economic Opportunity.
“We began looking at workforce issues in general as they pertain to health care, manufacturing, transportation and logistics,” said Pat Fera, manager of the Workforce Investment Board of Will County. “The maturing workforce is going to have a significant impact on all three of these industries.
“Here in Will County we’ve begun to look at what we can do to assist workers who are the retirement age, but may want to change careers and do something different—how we can take those retirees or near-retirees, and channel their experience and knowledge into our existing workforce.”
According to Jeffrey Sherwin, mayor of Northlake, the issue of an aging workforce hasn’t come up in his community, where the economy is focused primarily on manufacturing and logistics.
“We’re just trying to stay competitive,” said Sherwin. “I don’t see (boomers) leaving the workforce en masse. Unless they have retirement savings and health care benefits they will need to continue working. People are buying bigger houses, they didn’t save for retirement and many still have kids in college.”
Sherwin said that suburban Chicago may be less affected by an aging workforce than other parts of the country because of immigration patterns in the region. The Center for Aging & Work at Boston College is beginning to look at the impact of immigration on the workforce.
“Some labor force economists predict that maybe immigration takes care of the aging of the U.S. workforce, but it’s not so simple,” said Pitt-Catsouphes. “Immigration patterns of the past don’t necessarily predict those of the future.”
For example, the United States has in recent years depended on workers from China and India to supplement the workforce. However, these countries are beginning to take steps to retain their young talent who are needed to support their own growing economies.
Conversely, companies doing business outside the U.S. will have to take into consideration the expectations of workers based on culture, values, politics and even the aging of the workforce in other parts of the world.
China’s older adult population is growing rapidly, with a declining ratio of workers to retired people. Italy and Germany are also aging more rapidly than the U.S.
“Japan’s population is aging more rapidly than anywhere else in the world,” said Pitt-Catsouphes. “They still have a mandatory retirement age so companies with work sites in both countries must develop strategies that consider both cultural and legal issues.”
Experts suggest that in order to remain competitive, employers will need to examine the demographics of their workforce, understand the complex layers of the issue, and insure that their policies and practices are engaging enough to recruit and retain skilled older workers.