Make the most of your aging workforce

Contributing Editor David Berger, P. Eng., shows you how to make the most of tough demographics.

By David Berger, contributing editor

Around the globe, we are facing an aging workforce, which presents numerous challenges in managing the growing number and complexity of assets. According to the United Nations report, “International Plan of Action on Aging 2002” (Second World Assembly on Aging, Madrid, 2002), by 2050, the proportion of persons aged 60 years and older is expected to double, and will account for 21% of the total global population.

During the same time period, birth rates are expected to fall. In 2050, children are expected to represent 21% of the population, a drop of 9% from their population in 2000. These two trends are especially pronounced for developed countries, resulting in a shortage of younger workers to replace those who are retiring.

In the United States, as the economy faces greater uncertainty, the fact that 77 million workers are approaching retirement age might sound like good news. However, companies need to do a better job of assessing the implications of all that knowledge and experience disappearing during such a short period of time. Numerous studies point to the level of apathy among company executives in the face of this potential crisis. The majority of companies have no plans in place to deal with the expected brain drain.

Ageism prevails

As our workforce ages, one of the more disturbing parallel trends is the propagation of ageism. It is generally accepted that the closer one gets to retirement age, the more difficult it is to find a new job, starting at about age 50.

Furthermore, older workers tend to experience pressure to accept lower salaries because of their age. Finally, when older workers take their employers to court to fight age discrimination, the amounts awarded by the courts for these cases tends to be lower than those for younger workers.

The exact cause of age discrimination is not clear. In part, it is due to the greater compensation expectations of the more experienced worker. However, in many cases, it is the result of unfair stereotypes and biases, including the impressions that older people are less productive, more rigid in their ways and less likely to adapt to new technologies. These harmful stereotypes make it difficult not only for re-employment, but also for seeking training and career-development opportunities.

There is no evidence to support these biases. According to a report titled “Challenges of an Aging Workforce,” published by Human Resources Development Canada, “In almost every study, variations within an age group far exceed the average differences between age groups.” This implies there is no material difference between the productivity of older workers and younger ones.

The new old

According to the United Nations Population Division (“World Population Prospects: The 2000 Revision,” New York, 2001), by 2050, average life expectancy will rise to 82 years for developed countries, from 75 in 2000. As well, attitude surveys point overwhelmingly to a new definition of “old” such that those retiring do not view themselves as old and are perfectly willing and able to work.

A recent study conducted by Monster.com, a leading global online career and recruitment resource headquartered in Massachusetts, found that 70% of 2,000 workers polled who were between the ages of 50 and 70 said that they planned to continue working past age 65. Most people polled felt compelled to delay retirement for financial reasons. Other reasons stated for continuing their employment included needing health insurance, staying mentally active, being productive or useful, remaining physically active and finding their current jobs interesting.

Many baby boomers are unhappy with the age-old linear approach to life: education followed by work, followed by leisure. Boomers are customizing this approach to fit their needs, for example, going back to school in mid-career, or continuing employment and education on a part-time basis throughout their retirement years. These workers are looking for employers with the flexibility to accommodate more creative retirement options.

Leverage the statistics

To deal with the transitioning of an aging workforce of maintenance management and workers, the following steps are recommended:

1. Analyze workforce demographics: The first step in understanding the depth of the problem (or whether a problem even exists) is to determine the demographics of your specific work environment. What is the age, experience and skill set of your existing workforce at all levels of the maintenance organization? When are they eligible to retire? During career path planning sessions, have those who are eligible to retire expressed any desire to stay on, and if so, under what conditions? When these questions are answered, a spreadsheet can be prepared showing the gaps that will arise in each year for each position as a result of retirement eligibility. As well, employee turnover projections need to be overlaid onto the spreadsheet based on historical values.

2. Develop and implement a workforce plan: Based on the workforce analysis and in light of your asset-management strategy and overall corporate goals and objectives, develop a long-term plan for ensuring adequate resources during the next three to 10 years, depending on when the greatest staff turnover is anticipated. The plan should encompass the retention and recruitment policies discussed below. As the plan is implemented, carefully monitor the resource needs of the maintenance area, and make adjustments based on changes in supply of and demand for resources.

3. Develop a retention policy: Once the workforce analysis and plan have provided data on who is likely to leave and when, it is important to be ready with policies and tactics for keeping the more desirable staff, maintainers, supervisors and managers. Simply offering early retirement incentives, for example, has typically resulted in an organization losing its more marketable employees, who know they can pocket the money and quickly get a job elsewhere. The less-motivated, less-marketable employees are less likely to accept the offer to move on. As well, encouraging early retirement does nothing to retain the knowledge of best appropriate maintenance practices and your assets.

Your policies must somehow ensure the right people are retained. This might require some combination of retention bonuses, part-time work, reducing workload, job sharing, consulting opportunities, changing bosses and offering interesting work programs. Compensation might require some innovation, such as adjustments to medical coverage, pension and other elements that matter to your potential retirees. By polling your workforce and benchmarking the approaches used by other companies inside and outside your industry, you must identify the best approach to keeping the right individuals.

In addition to the retention of key people, the knowledge of your senior employees should be captured. This is best accomplished through training and mentorship programs, as well as documenting the knowledge through training videos, work study, job plans, maintenance practices and populating your CMMS.

4. Develop recruitment policies: At the same time as encouraging your better employees to stay, you should be looking for ways to attract the right people to fill any inevitable gaps. Because of the growing squeeze on technical resources, recruiters must sell candidates on the benefits of your maintenance operations over competitive opportunities. Thus, understanding the needs of eligible candidates is critical in terms of compensation, benefits, work environment, job design, hours worked, training program, independence, flexibility and so on. Consider short-term options where appropriate, such as hiring older workers, contract workers or consultants.

E-mail Contributing Editor David Berger, P.Eng., partner, Western Management Consultants, at david@wmc.on.ca.

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