Workforce Shortage: Retaining Knowledge And Expertise

April 19, 2006
An aging workforce has manufacturers rethinking the roles of the boomer generation.

Every day this year 7,918 people will celebrate their 60th birthday, according to projections by the U.S. Census Bureau. That works out to 2.89 million folks getting ready to either retire or rethink their work schedules. For manufacturers, it's time to offer choices to senior employees or risk losing years of knowledge and expertise.

What do older workers want from their employers?

"A lot of the things we talk about the Generation Y wanting are in complete harmony with what the boomers want in order to stay," says Suzanne Miklos, CEO of Cleveland-based Organizational Effectiveness Strategies, a consultancy that links business strategies with people strategies.

Specifically, older workers want to work fewer hours but still have a meaningful job responsibility. They don't want to be just a pair of hands; they want to make a contribution, according to Miklos.

Top Five Reasons Older Employees
Stay With A Company

Competitive health-care benefits package 61%
Competitive retirement benefits package 54%
Work/life balance 35%
The caliber of people with whom they work 28%
Recognition for work 27%
"What we are seeing is the career planning for younger workers is expanding to life planning for older workers," Miklos says. "As you look at the number of people turning 60, they want to contribute, but they also want balance in life -- health, family and spirituality. We will probably start to see more of the cutting-edge organizations create a safe place for that conversation. HR departments need to know what options people are looking for."

However, people are afraid to have that conversation. "Nobody wants to ask Joe when he might be retiring. It's the elephant in the room, and no one wants to speak up first," says Miklos.

For manufacturers, it would behoove them to start the dialogue before vast amounts of knowledge is lost.

Attractive Incentives For Workers 50+

Flexible work arrangements 41%
Training to upgrade skills 34%
Time off for volunteerism 15%
Phased retirement 14%
Reduced shiftwork 14%
Job rotation 12%
Sabbaticals 11%
Reduced responsibility 8%
Mentoring as a primary job responsibility 5%
Indeed, a recent study by the Society for Human Resource Management (SHRM) found that half of survey respondents said they are seeing many new workers who lack overall professionalism, written communication skills, analytical skills or business knowledge.

"We know there will be millions of baby boomers retiring and that some workers now entering the workforce lack core competencies," says Susan Meisinger, president and CEO of SHRM. "There are serious HR and workforce issues that could undermine the nation's global competitiveness. And HR must determine how to meet these challenges."

Additionally, an AARP report, which was prepared by Towers Perrin, found that HR managers who may have once thought that older workers could be replaced by those fresh out of school will find themselves creating flexible work schedules, telecommuting options, training and education, phased retirement and "bridge jobs" expressly designed to encourage workers over 50 to remain on the job beyond the age at which they might otherwise retire.

Indeed, the report -- The Business Case for Workers Age 50+ -- states that 58% of HR managers responding to a 2005 AARP survey said that it is more difficult today than it was five years ago to find qualified job applicants.

How Companies Are Preparing For Potential Worker Shortage

Increased training 6%
Succession plans/replacement charts 29%
Flexible scheduling 21%
Creating bridge employment 20%
Capture institutional memory/
organizational knowledge
Increased recruiting 16%
Phased/gradual retirement 10%
Doing nothing 32%
The 2005 survey also found that more than half of the HR managers queried believe that their companies are likely to face a shortage of qualified workers within the next five years. For manufacturers, the job of finding qualified employees is even harder.

"The image of manufacturing is unattractive to younger generations," explains OE Strategies' Miklos. "In the past you expected people who needed a job to feed their family would show up, and you would have plenty of people to select from. It's not so anymore."

Miklos notes that the need to retain older workers is greater than ever. The trick to retention -- offering enough incentives to stay.

"If you retire or step back in pay [by taking a part-time position in the company], that can affect the type of benefits that you get [compensation and health insurance]," according to Miklos. "Some companies have handled this by letting people retire and then bring them back. And I think if companies don't get on board with that, what we'll get is people retiring and going to a different organization."

Miklos also says that companies are going to have to think about cafeteria plans in terms of their degrees of full- and part-time positions.

What it comes down to is offering an engaged workplace. "If they have a voice, they make a difference, they're learning, and it's a worthwhile contribution both to their own skill sets and contribution to the company, workers will want to stay on board," Miklos says.

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