In tight labor market, graying workers look good

March 18, 1998|By Beverly Goldberg

NEW YORK -- Watch out, America. Age diversity is the next business issue that's destined to grab headlines and become a major topic of discussion.

Labor Department statistics confirm the obvious: The economy is booming. More than 300,000 jobs were created in February -- the fourth month in a row that's happened.

Unemployment dropped to 4.6 percent, the lowest since the early 1970s, and it's far lower in places such as Nebraska, where only 1.6 percent of workers are without jobs. (In large urban areas, unemployment rates continue to be higher for a myriad of reasons.)

Labor markets are unquestionably tight. The National Federation Independent Business reports that more than a quarter of U.S. companies report job openings they cannot fill.

As a result, economists are holding their collective breath about wage inflation, and many companies wonder how they can fill the new jobs critical to their continuing success.

The coming job glut

Some say the problem is temporary because the economy is bound to falter and unemployment to rise. If that does happen (and there is no reason to expect it), the problem will disappear, ++ but only for a few years.

The current worker drought will hit again, and again the story is in the numbers.

In about 10 years, the baby boomers, that huge generation born between the close of World War II and 1964 -- some 76 million -- will begin to retire. They will be replaced by the baby bust generation, a scant 56 million born between 1965 and 1976.

America is getting older and the propensity of Americans to retire early -- 60 percent of workers retire at age 62 -- shows no sign of diminishing. The American Association of Retired Persons reports one in eight Americans is now over 65, and that ratio will rise to 1-in-5 by 2030.

The lack of a work force large enough to ensure our economic health in the next century is likely to be a very real problem.

Finding a way to entice older Americans to work longer will be far easier if we do some long-term thinking and planning now, something Americans tend to resist.

The first step involves the organizational barriers that make it difficult to retain, recruit and train these workers. The biggest problem is age discrimination among those doing the hiring.

All too many managers mistakenly believe older employees are less productive, will not stay long enough to repay the somewhat higher costs of retraining them, have higher accident rates, are absent more often and are difficult to manage.

Let's start with accident rates. Workers over 55 represent 13.6 percent of the work force but account for only 9.7 percent of on-the-job injuries.

As to health problems, several studies have shown little difference in health care costs between 30-year-old males and 65-year-old retirees. And ask any employer who has a better record for punctuality -- those 30 and under or those 50-plus?

The cost of training may be a bit higher. Older workers can take longer to learn new skills, but weigh that slight difference against the fact those hired after age 50 tend to stay on the job 15 years, according to the AARP.

In contrast, according to a recent survey reported in the Economist magazine, the average length of employment in a single job is just over seven years for all workers.

So what do companies have to do to achieve age diversity? For one thing, recognize the problems of managing older workers need to be addressed from the manager side first.

Young managers must overcome their discomfort when it comes to supervising employees who remind them of their parents. They also must learn to deal with the different goals and needs of older workers.

Some older people just don't want to work full time any longer. They want to be able to take that cruise, spend the winter months in a warmer climate, pursue interests they've never had time to enjoy.

But many of them also would like some extra income and have the social interaction work provides.

Some companies are finding ways to deal with these issues. Whirlpool Corp., Quaker Oats Co. and GTE Corp. are hiring retirees to fill short-term overseas assignments.

Adventurous retirees find working in China for six months a great way to travel, make some money and maintain their skills-- just in case.

Flexible scheduling

Flex time, job sharing and other part-time work can entice many who just don't want the day-to-day grind of full-time work. This approach has worked for McDonald's Corp. on the executive level as well as among the hamburger flippers.

Telecommuting is a wonderful alternative for telephone sales representatives who don't want to drive to work over icy roads, as Lands' End Inc., a mail-order clothing company in Wisconsin, has discovered.

And what about locating an office near a retirement community?

Many other issues are involved in becoming older-worker friendly. For example, computer use is an essential and growing part of work today, and a simple change -- like a larger screen -- may make computer use less difficult for older workers.

Ergonomics count in many other ways as well. How about chairs with arms to grasp for easing the pain of rising with arthritic knees? Or how about phones that have built-in hearing aids?

Businesses will need to uncover and find solutions to all the problems involved before they can attract and retain older workers when they need them.

It is likely to keep human resources managers, especially those who specialize in diversity, and marketing departments busy for many years to come.

The numbers don't lie. As the millions of baby boomers age, companies will be competing to persuade older workers that they truly are "elder friendly."

Beverly Goldberg is a vice president of the Twentieth Century Fund and co-author of "Corporation on a Tightrope: Balancing Leadership, Governance, and Technology in an Age of Complexity."

Pub Date: 3/18/98

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