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joe Callo Contributing Writer
"The average age of the population and work force will continue to increase until close to 2020." That's the unequivocal opinion advanced in Workforce 2020, the Hudson Institute's definitive book about America's future labor market.
The authors, Richard Judy and Carol D'Amico, also warn, "U.S. public policy, as well as many employers, have yet to come to grips with the full implications of America's aging."
The demographic prediction is already matched by early signs of growing reliance on older workers. For example, U.S. Labor Department figures show that the current unemployment rate for over-55 workers is substantially less than that for the U.S. work force in general.
Although there's unanimity that corporate and industrial America will have to rely more heavily on the over-50 gang in the 21st century, what to do about it is less clear. For one thing, there are a number of simultaneous forces bearing on the work force.
Examples include the expectation that a growing percentage of entry jobs will be filled by immigrants, the fact that demographic trends won't be absolutely the same in all regions of the country, the trend toward people working at home. And those are only representative of the more obvious, and more predictable, variables. It all adds up to a major management challenge.
For employers, the ground rules for the use of older workers are going to change. Until now, the challenge was largely a matter of accommodation for the senior worker who wanted to work beyond retirement age. The commercial airlines provide a classic example of this situation. When pilots who reach the mandatory retirement age of 60 want to continue flying, they often are provided the option to remain in the cockpit in the engineer's seat. This allows older pilots to stay in the cockpit, but not as captains. It's a solution of sorts, but it has the drawback of keeping younger pilots out of entry positions.
Now the name of the game for organizations involved in employing older workers is rapidly becoming productivity. It's no longer a matter of keeping faith with a loyal, long-term worker who wants to stay on the job. It's a matter of being able to find the skilled workers needed to compete effectively in an economy committed to growth. Workforce 2020 sums it up, "The resulting continued presence of aging baby boomers in the work force will face employers with two challenges: first, they will need to design benefit plans and workplace options that appeal to older workers wishing and needing to work past age 65; second, they will need to find slots into which younger workers can be promoted."
In the opinion of many, a corollary of those challenges is that employers will have to place greater emphasis on the human resources aspect of management. In his book, "Managing Human Resources," Lloyd Baird, professor at Boston University's School of Management, cites the various forces -- including age demographics -- that will influence tomorrow's work force, and warns that, "Those who understand the critical role of human resources and adopt management practices that fit the new environments...will have sustainable competitive advantages."
The New York State Department of Labor points out myths about older workers that might be barriers to management practices that fit the new environments: the belief that older workers can't meet a job's physical demands; the belief that older workers will be absent too often because of illness; the fear that senior workers aren't adaptable and trainable; the belief that older workers cost more. In countering those myths, they cite that: 1. Less than 12 percent of today's jobs require great physical strength; 2. Surveys show older workers have better attendance than younger workers; 3. Evaluations of older workers show a high degree of flexibility; 4. Studies show that older workers are willing to accept a beginner's salary in a beginner's position.
Leo Morton, Senior Vice President for Human Resources and Operations Support at UtiliCorp United focuses on the cost issue in another way: "Certainly there will have to be more attention to hiring senior people as the work force ages. But it's important to think about retention too. There may be some apparent cost premium on retaining senior workers, but it comes down to productivity. Any possible cost differential involved in retaining a senior worker will probably be exceeded by that worker's high productivity. Plus, there's a saving on recruitment and training when you opt to retain the senior worker, rather than seek a new hire."
The workers' side of the equation will continue to be economically driven, but there also will be significant psychological aspects involved. Some older workers will be in the work force because they must enhance income, others will be there because they choose to be involved.
On the economic necessity side, there's the recent erosion of benefits, like the tax on Social Security income levied in the early 1990s. In a more general, but no less important vein, there's the across the board rise in taxes that has been eroding all incomes during the 1990s, exemplified by the retroactive increase in income taxes of 1993.
C. Neil Bull, professor of sociology at UMKC's College of Arts and Sciences summarizes the changing impact of these economic forces, "The result of the combination of forces bearing on the work force from the 1950s to the 1990s was that the average retirement age dropped from 67 to 63.
However, that trend appears to have bottomed out. And because of the demographic trends in age, and other factors, it's expected to remain steady during the early 21st century, or perhaps even begin to move back up."
The big wild card among the economic pressures for older workers to remain in the work force is inflation. If inflation begins to break out of it's recent pattern of relatively slow rises, it will add immense pressure on older workers to delay -- or return from -- retirement.
One of the important psychological factors involves a change in attitudes. During previous decades, the predominate attitude was, retire as soon as it's financially possible. The Social Security and company pensions increased to the point of making retirement for people in their early sixties -- or even younger -- a prevailing reality. The economics were matched with many workers being bought, or pushed, out of organizations during waves of downsizing.
Today, many older workers simply don't want to stop working. They anticipate living longer, have better health and want to continue doing work that's interesting.
Retirement no longer is equated with departure from the work force, but rather with an increase in workers' options.
Tom Akins, president of AgeSpeak in Lee's Summit and an instructor at UMKC's Center on Aging Studies, focuses on the potential inherent in an aging work force, "The issue isn't just the growing number of older Americans, but capitalizing on the immense potential of the older worker."
That potential was dramatically demonstrated recently in connection with one of America's biggest future-related problems, the notorious year 2000 computer crisis. That crises will climax when our computers' inability to accommodate the shift to the new century on Jan. 1, 2000, will cause business chaos.
One would think that the solution to this problem would come from some 30-year-old techies in Silicon Valley.
Surprise. Arguably the most viable solution to date has come from a former IBM programming executive named Bob Bemer -- who's 77 years old.
John Clabaugh, a manager of human resources at AlliedSignal, struck a balance point, "We're a future-oriented company and we know our employment policies will be influenced by demographics. As the need to retain the older end of the work force grows, we anticipate moving further towards part-time, and work-at-home situations. But we don't think there's a conflict. We've always known the importance of retaining the technology that's within our walls. We also believe in a balance between youth's enthusiasm and the wisdom of experience. The proportions may change a bit, but the striving for a balance won't."
As technological change accelerates, competition intensifies and age demographics of the work force shift, establishing that balance will be challenging for employers.