Thursday, September 30, 2010

Study: First Boomers Continue To Work Out of Necessity

A research study prepared by the MetLife Mature Market Institute for the first group of Baby Boomers to enter retirement finds that those born between 1946 and 1955 will be forgoing the tradition of a leisure-filled life; instead, their financial obligations, among other things, will encourage many of them to remain in the workforce, some indefinitely.

According to "Early Boomers: How America’s Leading Edge Baby Boomers Will Transform Aging, Work & Retirement," while, in the past, about three-quarters of men and women would be fully retired within four to five years from their 65th birthday, by the time the first Boomers approach age 70, fewer than half of those ages 65 to 69 will have retired. Among other findings:
  • over the next 10 years aging Early Boomers will result in a 50% rise in the number of people 65 to 74 years old, a growth rate for that cohort not seen in 50 years;
  • there are 1.3 million more Early Boomer women than men;
  • the labor force participation rate of Early Boomer men and women is at a 15-year high (65.2%);
  • among working Early Boomers, three-quarters of women and three-fifths of men had white-collar jobs that paid more than other jobs and were less physically demanding, which facilitates more of them staying in the workforce over the next decade.
Source: MetLife Mature Market Institute News Release (September 30, 2010)

Wednesday, September 29, 2010

Australia: Labor Participation Rates Rise for Older Workers

The Australian Bureau of Statistics (ABS), in an article "Older People and the Labour Market," reports that the participation rate of Australians aged 55 and over has increased from 25% to 34% over the past 30 years, with most of the increase occurring in the past decade. In 2009-10, around one third of older Australiana (about 1.9 million) were participating in the labor force, making up 16% of the total labour force, up from around 10% three decades earlier.

Breaking the numbers into smaller age bands, ABS reports that 71% of Australians aged 55-59 years were participating in the labor force, 51% of the 60-64 year olds, and 24% of those aged 65-69 years. All of these numbers were up significantly over the last 20 years. However, the participation rates of people aged 70 years and over remained comparatively low, ranging between 2.7% and 4.5% over the last 30 years.

Among other things, the report also showed where older people were working:
In the year to June 2010, around two in five employed men aged 55 years and over worked as Managers (23%) or Professionals (20%). Older men were more likely to be employed in these higher skilled occupations than their younger counterparts and less likely to be employed in more physically demanding occupations such as Technicians and Trade Workers (18%) and Labourers (11%). However, there were 113,000 men aged 55 years and over working as Labourers. Half of these worked as either Construction and Mining Workers (16%), Factory Workers (16%) or Farm, Forestry and Garden Workers (13%).

The most common occupations among women aged 55 years and over were Clerical and Administrative Workers (28%), followed by Professionals (25%). While these were also the most common occupation groups among younger women, those aged 55 years and over were more likely to be employed as Managers and Clerical and Administrative Workers than their younger counterparts, and less likely to be employed as Sales Workers. There were 72,800 women aged 55 years and over employed as Labourers, more than half (54%) of whom worked as Cleaners and Laundry Workers.
Source: Australian Bureau of Statistics Social Trends (September 2010)

Monday, September 27, 2010

New Book on Managing the Older Worker

According to a review in the magazineCanadian Business by Jasmine Budak, Peter Cappelli and Bill Novelli, in their new book Managing the Older Worker: How to Prepare for the New Organizational Order, make the case that "as life expectancies rise, more and more managers will be supervising people twice their age, starting with the already–lingering baby boomers."

Among other things, the authors "urge employers to acknowledge both the value of older employees (for training, mentoring and their corporate knowledge) and their workplace needs (flexibility, respect)." Employers will need to make bridges over the generational gap or face a looming labor shortage. "If you ignore [boomers]," says Novelli, "you're ignoring a third of the workforce."

Source: Canadian Business Magazine "How to manage an aging workforce" (Oct. 11, 2010)

Thursday, September 16, 2010

Japan: Delayed Retirements and Employer Preparedness

According to Florian Kolbacher, Japanese organizations have not prepared themselves well for the aging of the world's population, even though Japan is by far the most severely affected nation. Japan's "Year 2007 Problem" (referring to the year in which the first Japanese Boomers turn 60, and thus move into mandatory retirement) could potentially crippling Japanese business from the widespread loss of industry-specific knowledge.
A major reason for concern among Japanese businesses is that Japanese corporate culture has a very distinctive management approach, especially within large organizations. Knowledge is primarily tacit, or taken for granted, and frequently absorbed over long periods of time as workers slowly advance through organizations as they age. Subtleties associated with this type of knowledge, though, are difficult to quantify, document, or access for a new hire.
However, Kobacher reports, 2007 labor crisis failed to materialize, because Japanese Baby Boomers did not begin retiring en masse as expected, but continued working. Neverthless, this has only accentuated other business and social issues in Japanese culture.
Now, though, as older workers remain on the job longer, they are finding that their jobs are changing. "Younger employees, previously lower within a company’s hierarchy, now work in higher positions and are even sometimes direct superiors to their elders," Kohlbacher explains. "Older workers, when rehired, are often managed by former colleagues and even subordinates; hence these older workers are often ranked lower in the hierarchy than younger employees - a difficulty in Japan because of the strongly ingrained seniority system."
Kobacher's comments derive from a presentation to American Chamber of Commerce in Japan (ACCJ) on "Management Implications of Demographic Change in Japan: An Innovation Perspective" in August 2010, published in an article Baby Boomer: What happened to the ‘Year 2007 Problem?" in the April 2010 edition of ACCJ Journal.

Sources: Sloan Center on Aging & Work at Boston College News Release (September 13, 2010); News Release (September 15, 2010)

United Kingdom: Research Study Shows Employers Not Ready for Aging Workforce

According to research by the Chartered Management Institute (CMI) and the Chartered Institute of Personnel and Development (CIPD), only 14% of managers in the United Kingdom consider their organization well-prepared to cope with an aging workforce, despite the impending abolition of the Default Retirement Age (DRA) and the fact that a third of UK workers will be aged over 50 by 2020. In their published report--"Managing an Ageing Workforce," CMI and CIPD report that 34% claim board-level recognition of ageing workforce issues is non-existent, despite the fact that 93% see value in retaining the knowledge and experience of older workers.

Among other findings: 43% of managers are not well-informed of their organisation’s retirement policies, 59% note that there is a perception that it is hard for younger employees to manage older people, 40% claim having experienced age discrimination at some stage in their careers, and 41% state that their workplaces are not age diverse.
CMI’s director of policy and research, Petra Wilton, said: “The age profile of the UK workforce is changing, yet UK businesses are woefully underprepared for the impact this will have on their business. This latest research makes it clear that those at senior level in particular are failing to take the issue seriously and that discrimination is still too frequent. If action isn’t taken, employees who are in the 50+ age bracket will feel undervalued and will have no incentive to carry on working beyond normal retirement age. The loss of their talents and considerable experience by businesses not prepared to adapt is reckless in the extreme.”

Dianah Worman, CIPD’s diversity adviser, said: “In difficult economic times businesses are not galvanising the talent and skills available to help them perform more competitively. Employers will need to keep on their toes to respond appropriately to the phasing out of the DRA next year, which will have widespread implications. Clearly businesses already recognise the value of older workers, but this knowledge needs to be matched with appropriate action. We know from this latest research that managers aren’t being supported or trained appropriately in the management of older workers, for example, but it is also apparent that the needs and preferences of older workers have to be better addressed.”
Source: Chartered Management Institute Press Release (September 16, 2010)

Tuesday, September 14, 2010

United States: Analysis of Increased Labor Participation Rates of Older Workers

An Economic Letter ("Labor Force Participation and the Future Path of Unemployment"), authored by Joyce Kwok, Mary Daly, and Bart Hobijn, all of the Federal Reserve Bank of San Francisco, finds, among other things, that in the case of the labor force participation rate of older workers, secular trends generally overwhelm cyclical patterns. Thus, while participation of workers 55 and over consistently fell from the 1950s through the 1990s, when Social Security, pension, and retiree health benefits increased substantially and conditions were generally favorable for early retirement, in the 1990s, as the value of those retirement programs eroded, older workers reversed the downward trend, and their labor force participation rate has risen steadily, even through cyclical downturns.
Many factors potentially explain the recent increase in older-worker labor force participation. People in this age group increasingly are able to delay retirement because they are healthier and longer lived than previous generations of older workers. They have an incentive to work longer in order to build assets in defined-contribution pension plans and to qualify for larger Social Security benefits. And the rapid growth of health-care costs and decreased availability of retiree health benefits push older people to continue working in order to get health insurance, at least until they are 65 and eligible for Medicare.
Source: Federal Reserve Bank of San Francisco Economic Letter 2010-27 (September 13, 2010)

Survey: AARP Takes Closer Look at Impact of Recession on 45+ Lower Income Workers

AARP has published results of its investigation of the struggles lower-income older adults are facing during the recession. Among other things, the Closer Look June 2010 Survey found that nearly six in 10 Americans 45+ who make less than $25,000 a year say they are either "not at all" or "not too" confident they will have enough money to pay medical and living expenses in retirement, compared to 36 percent of higher income adults.

On work-related matters, 28% stopped contributing to retirement savings in the past six months, and 14% of adults 45 to 64 reported having to prematurely withdraw funds from retirement savings vehicles. In addition, with many older workers currently facing extended unemployment, 63% said that, based on what they have experienced or observed, older workers face age discrimination in the workplace.

Source: AARP News Release (September 13, 2010)

Saturday, September 11, 2010

United Kingdom: Survey Suggests Small Employers Reluctant to Hire Older Workers

A quarter of the 669 United Kingdom business owners surveyed by say that they would not hire someone over the age of 60. In addition, 15% say that would "maybe" take on an older worker, while 6$ would only do so if the employee was part-time.
Peter Barnett, CEO of business strategy advisors Sales Managed, says: "Many employers have reservations that older people would be set in their ways. Some managers want their employees to do things their way and they see younger people as more ready to conform."

Juan Lobato, founder of website building firm Basekit, comments: "A factor for managers could be how much energy the person has, as energy can decrease with age."
Source: News Release (September 10, 2010)

Monday, September 06, 2010

Best Practices: Integrating Generations In IT Department

Writing in CIO Insight, Don Reisinger has provided a set of practical recommendations for encourage all employees to buy into the technology strategies and process changes you have implemented--including older workers are having trouble adjusting to this new normal, and that adjustment process is probably cutting into corporate productivity. He suggests strategies that can help an IT department make older workers more comfortable with new technologies, new processes, and agile thinking.

Among other things, he encourages adoption of connected technologies, including Blackberries, Facebook, and text messaging, even if older workers are reluctant. On the other hand, however, he suggests sticking to Windows platforms that older workers may be more comfortable with. Most importantly, he says to bring in the hard data:
Prove that new processes and technologies are helping the company. Older employees want to see the organization succeed. Given proof that new solutions are working, they will be far more likely to go along with these.
Source: CIO Insight "Strategic Tech Slideshow:
Help Your Employees Leverage Technology"
(September 6, 2010)

Sunday, September 05, 2010

Case Study: BMW and Equipping the Factory for Older Workers

In "The Globe: How BMW Is Defusing the Demographic Time Bomb" from the March 2010 issue of Harvard Business Review, the authors looked at how BMW responded to what looked like an inevitable decline in the productivity of an aging workforce in the years ahead with an innovative, bottom-up approach for improving productivity. Subsequently, BMW has garnered more publicity for their efforts.

Rather than forcing its aging workers to retire, or even fire them, BMW management tinkered with one assembly line in one division of a huge auto plant, and turned it older overnight, staffing it so that the average age of workers would be 47 (what it's projected to be seven years from now). Then, in responses to asking the workers how to make things better, the company says it made 70 small changes in the workplace, to cut the chance of errors and reduce physical strain.
When workers said their feet hurt, the company made them special shoes, and put in wooden floors. Some got a place to sit: a hairdresser's chair, modified for the assembly line.

Rudolph Mohr, 56, has been working here for 35 years. He finally got a chance to stretch - right on the factory floor. "When I go home, I have more energy," Mohr said.

Some tools were improved, and new computer screens were introduced, with bigger type.
The direct investment in the 2017 line project was almost negligible, approximately €20,000. But the 70 changes increased productivity by 7% in one year, bringing the line on a par with lines in which workers were, on average, younger.

Source: CBS News "How BMW Deals With an Aging Workforce" (September 5, 2010)

Additional sources: BBC "A Factory Fit for an Aging Workforce"

Thursday, September 02, 2010

Towers Watson Reports Improvement in Older Workers' Confidence in Retirement

A survey of U.S. workers conducted by Towers Watson finds that older workers’ confidence in their ability to retire comfortably has rebounded modestly in the past year, but confidence levels remain well below those prior to the financial crisis. Specifically, 50% of workers aged 50 to 64 are very confident about having enough resources to live comfortably five years into retirement, up from 44% in March 2009, but still down from the 63% reported in 2007.

In addition, according to "Retirement Attitudes — Part I: Confidence in Retirement," fewer older workers are now concerned about reduced or eliminated benefits in their defined benefit plans or about their employer’s ability to pay some or all benefits they’ve already earned, with the percentage of older workers who are concerned that their employer will reduce the benefits they earn in the future declined from 44% in 2009 to 39% this year, while the percentage concerned their employer will eliminate benefits they earn in the future dropped from 38% to 30%.

Source: Towers Watson Press Release (September 1, 2010)