A surge of titanic proportions is about to sweep through American businesses as eighty million skilled and experienced baby-boomers reach retirement age. Departing the work force at a rate of four million per year until 2024, this loss of seasoned workers will create an undertow in every sector. Retirees take with them networks of professional contacts, specific skill sets, and organizational knowledge.
In addition, according to a July 2008 Bureau of Labor and Statistics report, employment numbers for the 16-25 age group are projected to decline between the years 2006-2016, and among those 25 to 54, there will only be a slight rise. This smaller labor pool will not be able to replace the huge flood of departing older workers. Because 30 percent of boomers aged 57 to 61 have bachelor's degrees or higher, even more job shortages are predicted in fields requiring highly skilled professionals.
But here's the good news. In a recent American Association of Retired Persons study, 70 percent of employees nearing 62 and older plan to work well into their retirement years. The BLS study breaks down the numbers of those already retired, those who accepted early-retirement packages, and those who were laid off. Employment of mature workers 55 to 64 is expected to climb by 36.5 percent. For those 65 and older, the employment numbers will soar by 80 percent. According to AARP's Public Policy Institute, "…workers aged 55 and over will account for more than 90 percent of projected labor force growth over the next decade. The number of employed men and women aged 55 and older grew by nearly 2.3 million, or 9.7 percent between 2005 and 2007." Companies looking to keep their competitive edge will have the opportunity to make use of the skills of these returning workers.
Telecommunication companies, such as R & B Network Services, No. 887 on the Inc. 5000 list, already hire workers who took early retirement from the top 500 publicly traded companies and are too energized to sit at home. Firms in the education sector, such as ESW Incorporated, No. 2125 on the Inc. 5000 list, search for employees with 25 to 35 years of specific subject matter experience. As a result, their staff ranges in age from the mid-50s into the 80s. The company is so successful that 95 percent of its business comes from repeat clients. Another firm, Educational Services of America, No. 1015 on the Inc. 5000 list, finds retirees a useful resource. Mark Claypool, President and CEO, comments that 15 percent of his staff is aged 55 to 75 and they "…offer a rich tapestry of experiences to the school environment."
Retirees are also found in the government-consulting sector. VectorCSP, No. 802 on the Inc. 5000 list, provides high-end aviation engineering, logistics, and change management consulting to the federal government, primarily to the Coast Guard. Over 50 percent of their employees are ex-Coast Guard officials and have worked with VectorCSP's aviation technology in the past. Managing Partner Jeanne Cumby claims a staff retention rate of over 95 percent since the company started in 2002. None are there solely for a paycheck, she says, but for what they can offer the Coast Guard and their country.
Consulting and staffing companies are particularly well positioned to fill vacated posts or find jobs for retirees. Patrick Jones, CFO of top-tier staffing company Addison Search, LLC in Chicago states that 10 percent to 15 percent of its 250,000 contractors are aged 55 and over. The company is ranked No. 1395 on the Inc. 5000 list. They started actively hiring older workers in 2005. "Typically, the people who are retiring are the most productive, highly valuable employees," says Jones. "There's not a company that's not going to be impacted by this."
Some fear that seasoned workers will increase the cost of their benefit package, but Jones says he's seen no significant increase. Many former retirees decline retirement benefits because they already collect social security or receive retirement benefits from a previous employer. Nor has Jones seen any difference in time off for illness in his over-55 staff. "Older workers are our most reliable contractors," he says. "If you tell them to show up at 8 in the morning, they're there at 7:45 a.m. with their sleeves rolled up. They need very little re-training. Often, when clients call us for help, there's been a big blow-up with lots of chaos and not a lot of structure. Older workers have the maturity to handle the stress along with the different types of personalities involved." At what point do retirees' abilities start to diminish? Jones laughs and says he has one contractor in his mid-70s who has been requested three times in the past year by the same client.
What Motivates Seniors?
Jones also discusses different motivations of employees as they age. This is confirmed by the MetLife study, "Living Longer, Working Longer: The Changing Landscape of the Aging Workforce," which sorts the Working Retired into three separate categories. Those 55 to 59 are motivated by economic incentives, but a dramatic shift occurs among 60 to 65 year-olds, who require challenges and the need to feel they still have something to contribute. Baby boomers, while better educated, and more highly trained than previous generations, don't want their skills to rust or to waste years of their education and training. For returnees 66 and older, social interaction is an important factor. The two latter groups work out of choice, not need.
Samar Ghadry, co-owner and Executive Vice President of Powertek Corporation, No. 1092 on the Inc. 5000 list, actively seeks out former government workers. "They know how the system works and have excellent work habits," states Ghadry. "A company needs young workers for their fire-in-the belly enthusiasm and energy, but it also needs seniors for stability and their ability to concentrate on a task to completion."
For a Department of Labor project, Powertek sought out a subject matter expert experienced in a legacy application that their younger workforce wasn't familiar with. The expert, who was past retirement age, was able to quickly ascertain the capability of the application and prepare the necessary documentation in half the time it would have taken someone new to learn.
Older workers have little interest in empire building or becoming competitors of other staff and are able to remain task-oriented. They don't need supervision or feel the urge to flit from employer to employer. The BLS states that the majority of returning workers are in full-time, as opposed to part-time, positions, an increase from 44 percent from 1995 to 2007. In 2007, the median income for retirees was $605 per week, just slightly below the median of $695 for all workers. The sharp decline in physical jobs also helps mature workers remain in the workplace.
For health concerns, the MetLife Study points out workers 55 and older are two to five times more likely to have disabilities, including chronic but controllable conditions such as diabetes and cardiovascular disease. While they may need additional time to complete some tasks due to a decrease in cognitive skills, they compensate with stronger decision-making abilities. They also take fewer absences than younger workers. They don't have to stay home with sick children or refuse overtime because of parental obligations.
One major obstacle against hiring retirees is the perception that they will somehow become a liability. Statistics prove the opposite is true. When companies ignore mature workers with specific skill sets, business acumen, and intuition gleaned from years of experience, they handicap their future growth. This graying of the workforce won't go away, nor can it be ignored. With the economy dipping, and companies retrenching or moving overseas, those that recruit seasoned workers will sail confidently into the future.