The Maturing Workforce – Managing the Crisis Before It Hits
By Eric Lesser
When people leave an organization after a long tenure, their colleagues may compliment them by remarking that the knowledge and expertise they possess are irreplaceable. Unfortunately, this may not be far from the truth. According to the report “Reversing The Aging Work Force Crisis” by Forrester Research, over the next 10 years, 76 million baby boomers will retire, with only 46 million younger employees in line to replace them. Not only is the sheer numbers gap alarming, but a serious concern lies in replacing the skill set and integral knowledge that employees have mastered from years of work.
In recent years, workplace demographics have shifted, as the number of workers approaching retirement continues to increase, while pools of younger workers begin to diminish. Consequently, organizations face the challenge of passing knowledge from older, more seasoned employees to younger, incoming workers. This is easier said than done, because most organizations’ knowledge is typically tacit in nature, built up over years of experience and through a web of relationships.
As individuals progress through their careers, they often develop unique insights that are difficult to replicate. For instance, imagine an employee hired out of college who begins working on a brand new piece of equipment. With ongoing experience with the product and increased knowledge about how it works, that employee may become the most valuable person at the plant on that machine. As the product goes through its lifecycle, this employee may be asked to provide feedback to the machine’s manufacturer and may even be involved in creating standards at an industry level. However, when this employee decides to retire, little, if anything, is rarely done to share the plethora of knowledge the individual has built up over the years.
This example can be applied to almost any industry in which an employee has developed an expertise on a product or service, built strong client or vendor relationships, or established a company best practice. How can these workers and their knowledge be replaced? How do you teach years of specialized skills to a new person? By exploring and identifying specific industry problems and addressing them with workforce solutions, these issues can be resolved before they affect a company’s business processes. With a well-developed and proactive plan, companies can more effectively manage the risks associated with departing employees.
High risk industries
While the aging workforce does not bypass any organization, the following industries are at higher risk.
The U.S. Government may face a true workforce crisis, as many of its employees will soon be retiring. The U.S. General Accounting Office reports that between 1999 and 2006, the following percentage of employees would be eligible for retirement:
· 50 percent of the Agency for International Development
· 45 percent of the Department of State
· 41 percent of the Department of Transportation and National Science Foundation
· 40 percent of the Social Security Administration.
These startling numbers present a major challenge, which is compounded by the difficulty many government agencies face in attracting talented individuals to work within the public sector. However, several government agencies have begun to take proactive steps to stem the hemorrhage of knowledge. For example, the emeritus program at the NASA Goddard Space Flight Center allows retired employees to continue as valued contributors to activities and volunteer their services. Goddard’s recently retired chief information officer was involved in the emeritus program and shared his wealth of knowledge, and invaluable experiences with others.
In another example, through its Academy of Program and Project Leadership’s (APPL) Knowledge Sharing Initiative, NASA conducts knowledge sharing workshops, master project managers forums, and other workshops to capture, share, and transfer project management knowledge from experienced project managers (both senior level and retiree) to up-and-coming project leaders. Their “Leaders as Teachers and Mentors” program has an expert database of current and retired practitioners who make themselves available for consultation.
The oil and gas industry also is wrestling with retirement issues, compounded by challenges in recruiting new employees. For example, the Society of Petroleum Engineers indicates that despite a small increase in its young members in 2004, the average age of members remains 45 years or older. Also, the average age of members in the American Association of Petroleum Geologists is rising: up from 41 in 1981 to 49 in 2001. Making matters worse, the long and discouraging period of industry downsizing that occurred in the 1990s has resulted in a shortage of petroleum engineers and geologists, whose skills are critical to successful drilling efforts. Continuity Management: Preserving Corporate Knowledge and Productivity When Employees Leave cites that at two top schools for oil industry engineers and scientists, the Colorado School of Mines and Texas A&M, students graduating with a bachelor’s degree in petroleum engineering dropped 67 percent between 1986 and 2001 and 81 percent between 1982 and 2001, respectively.
Vital to helping maintain the infrastructure of our country, the energy and utility industries are also two sectors that face the greatest challenges with preserving the knowledge and skills of their workers. For example, according to the Bureau of Labor Statistics, electric power industry workers are already older than the national average (the average utility employee is 43.7 years old), and the median age will continue to increase over the next 25 years. For utilities as a whole, more than 148,000 employees fall in the 55-to-64-year-old range, with another 26,000 employees over age 65. In addition, approximately half of Baby Boomers will reach retirement age in the next five years.
According to UCT Research’s recent utilities survey, while 93 percent of respondents said there is awareness in their organization of the current and pending effects of workforce aging, only 56 percent have procedures in place to minimize the detrimental effects of lost experience by retirement. In addition, only 28 percent said that their organization has in place procedures to retain or attract employees over the age of 50.
In the 1970s, the mining industry experienced a workforce boom and a large number of employees—mostly in their 20s—were hired. Then, from 1980 to 1990, the industry suffered a downturn and many of the younger hires from the 1970s employee growth were let go. As a result, the U.S. Bureau of Labor reports that the median age of workers in the mining industry (45.9 years at the end of 2004) is increasing faster than any other labor force in the country. This is also attributable to coal miners requiring a high-level of technical skills, which involves extensive training and time to develop. Traditionally, miners entering the field would work alongside an older employee and develop skills informally. However, to be more efficient and time-sensitive, the mining industry is beginning to recognize the need for a more formal training program.
Another concern among the mining workforce is dangerous working conditions. Mines and quarries are often dark, damp, hot, noisy and at times—unpredictable and unusual. This working environment can pose a challenge when trying to attract a new and younger workforce. Also, these conditions need to be monitored as workers continue to work and age and thus the increases in health issues become a great concern. For example, according to the National Institute for Occupational Safety and Health, while most research reports indicate that occupational injury rates appear to decline with increasing age, the severity increases and injured older workers tend to require longer recovery periods.
Strategies for addressing the aging workforce
Once senior management recognizes the problem of an aging workforce, they need to prioritize individual positions and groups where intervention is critical. This discussion should involve a cross-functional team of executives who have a solid understanding of overall business objectives and marketplace needs, as well as employee demographics. Intervention will be critical for those positions that hold high-strategic knowledge and where the expected level of attrition is elevated. After identifying the key areas of exposure, an organization is ready to begin designing and executing solutions to address the issue.
Based on our research and working with organizations on their workforce strategies, we recommend considering the following strategies for addressing the challenges of the maturing workforce.
Redirect recruiting and sourcing efforts to include mature workers
With the shift in workforce demographics, many organizations are quickly finding shortages of workers from labor pools where they normally would draw younger employees. As a result, organizations should consider redirecting recruiting and sourcing efforts to include mature workers. To help attract older workers, companies may want to consider the use of part-time positions, and sponsoring recruiting events geared towards mature workers. Also, consider offering flexible benefits targeted toward mature workers, such as additional paid time off around the holidays or a week of unpaid leave after the birth of a grandchild. Recruiting and employing a higher proportion of mature workers can help organizations achieve benefits, such as decreased absenteeism rates and increased customer retention with older customers, who sometimes feel that younger staff are not experienced enough to address their concerns.
Retain valued employees through developing alternative work arrangements
While some organizations are recruiting mature workers, others are developing alternative work arrangements to help retain employees before they leave with their knowledge and skills. For example, some organizations retain workers after they reach retirement age by developing programs that have retirees work on a project-consulting basis with flexible hours and earn roughly the same base salary they earned prior to retirement. These programs prove beneficial not only for the participants, but also for the overall organization because they are able to maintain expertise and transfer it to others. Companies should also explore, when appropriate, the use of telecommuting as a way of encouraging mature workers to remain with the organization. Avoiding the time, costs, and challenges associated with commuting full-time can be a powerful incentive to stay.
Preserve critical knowledge before it walks out the door
When individuals leave an organization, a career’s worth of experiential knowledge can be lost. This can range from email, reports, and documents, to tacit knowledge about how to do their jobs effectively and efficiently. Consequently, remaining employees often search futilely for answers to questions, recreate analyses, or simply fail to heed previously learned lessons.
However, a number of organizations have focused on techniques to stem this hemorrhage of corporate insight. For example, one solution focuses on eliciting the experiential, or tacit, knowledge of employees through detailed interviewing and/or documentation. Organizations capture insights in an explicit form that can be stored for future use. Other companies have tried mentoring arrangements and fostering communities of practice to encourage mature workers to pass down the knowledge to the next generation. This type of exchange can be especially useful when the decision rules and experiences cannot be easily captured or written down without losing the essence of the knowledge.
In addition, to retain valuable experiences, some organization use to technology to help employees share lessons learned, expand the organization’s knowledge base, and improve operational and product quality. For instance, by capturing videos and audiotapes of selected individuals and groups involved in challenging projects, storytelling techniques can uncover and preserve knowledge that can be shared with audiences through a variety of media channels, such as websites.
Help ensure that mature workers are able to use technology effectively in the workplace
One of the primary misperceptions is that older workers have difficulty learning and adopting new technologies. However, several research studies find that age alone is not directly linked to the adoption of computer use in the work environment. So while computer technology is not necessarily a problem, organizations should be aware of two other issues related to the use of technology.
First, organizations need to consider the accessibility requirements of older workers. As individuals age, it may become more difficult to decipher smaller typefaces on a screen, understand the audio portion of a streaming video, or control the hand motions necessary to use a computer mouse or similar devices requiring precise movements. When designing systems, keep in mind the needs of potential user groups and provide alternative mechanisms for accessing, displaying and manipulating Web pages and other applications.
Second, organizations should evaluate strategies with rolling out and training older workers on new applications. For example, consider building a cadre of influence leaders to demonstrate to older workers that they are capable of learning the new technologies, and incorporate ample practice opportunities to build comfort and confidence in using the technology.
Provide opportunities for workers to continually update their skills
Many companies are recognizing the need to refresh the skills of those workers whose formal training may have ended years, if not decades, earlier. To address the learning needs of maturing managers, consider developing programs that focus on both building new skills and leveraging their wealth of experience that they already bring to the table. This can allow workers to maintain their productivity over a longer period of time while simultaneously allowing the organization to take advantage of the experience of more mature workers.
Facilitate the coexistences of a multi-generational workforce
Age is often overlooked when addressing the subject of employee diversity. Yet, the viewpoints and perceptions of different age groups can present significant barriers in a workforce where age differences can span 40 years or more. For example, preconceived biases about the willingness of older workers to learn and embrace new technologies can limit their opportunities, discouraging mature workers from refreshing their skills. At the same time, younger workers may be perceived as not willing to “pay their dues” before advancing in the company. This can dampen the enthusiasm of new employees and result in low morale and early attrition.
These challenges need to be addressed from the start by encouraging the workforce—both young and old—to partner on projects. Every department should be well integrated with a diverse demographic and encourage cross-functional teamwork. When new employees join an organization, pairing older and younger workers during the on-boarding process can help develop both parties develop important connections and relationships. Also, consider incorporating age-related scenarios and role play into ongoing diversity training activities.
Next steps for preparing for the aging workforce
The aging workforce is a challenge that is easily overlooked. However, before an organization is faced with having to react to the problem, it can employ proactive strategies and information to help recognize and address these issues. Having a plan requires creating a diagnostic process that includes examining the company’s current workforce demographics, determining which talents are critical to the company’s success, identifying potential solutions and finally developing an integrated plan to address changing workforce dynamics. An organization that is committed to addressing ever-changing workforce demographics is a company that can continue to improve its efficiency, diversify its workforce and continue its growth into the future.