Canada: Business and Labor Form Alliance To Tackle Challenges Arising from Aging Workforce

As part of a country-wide initiative called the “Workplace Partners Panel” created as a response to labour and business concerns about the need for a collaborative approach to address Canada’s labour market challenges, leaders of Nova Scotia's labour and business sectors are meeting to discuss potential solutions to Nova Scotia’s labour market challenges arising from an aging workforce.

Rick Clarke, President of the Nova Scotia Federation of Labour, and Elizabeth MacDonald, former Vice-President of Enterprise Services for Emera Inc., are chairing a “dialogue session” with the province’s business and labour, community, and government leaders, including representatives from the education sector, immigration settlement, youth and economic development.

“What we want is to help identify and document Nova Scotia and the Atlantic region’s best thinking on the issue of skills needs in the context of an aging workforce,” adds Liz MacDonald. “This is a critical issue for Atlantic Canada as the region deals with an aging population, a low birth rate, and the loss of young people leaving the region in search of other opportunities.”

Source: News Release Workplace Partners Panel (April 18, 2006)

Keeping Pace with Managing Multigenerational Workforces

"Managing multigenerational workforces is an art in itself. Young workers want to make a quick impact, the middle generation needs to believe in the mission, and older employees don't like ambivalence." Eric J. McNulty, managing director of Harvard Business School Publishing's conference division, suggests that companies must recognize new attitudes among their workers: "They must acknowledge that new relationships will exist between employees and organizations. And they must open themselves up to revisiting assumptions about which workers are appropriate for which roles and to rethinking the ways in which they hire, motivate, and retain employees." In particular, he recommends looking at the advice of Tamara Erickson and Bob Morison of The Concours Group, who have done extensive research on the changing workforce and the age-based cohorts that compose it.

• Workers under 35: One should rapidly place younger workers into responsible roles to get the most out of these workers before they move on.
• Workers between 35 and 54: Middle cohort workers may have to stay in their roles longer because the cohort ahead of them is retiring later and there are also fewer replacements coming up from below. They need to be reengaged through fresh assignments, mentoring, and knowledge-sharing roles, and even through career switches within the company.
• Workers 55 and over: Companies should get serious about recruiting and retaining older workers for both entry-level and highly skilled work. Ferret out and eliminate the tacit age bias that often exists in hiring and development processes, and craft roles that leverage the expertise of older workers. Think of retirement as an opportunity to keep talent around rather than as a way to phase people out.

Source: "Can You Manage Different Generations?" Harvard Business School Working Knowledge Newsletter (April 17, 2006)

Arkansas Announces Mature Worker Initiative

Arkansas Governor Mike Huckabee has announced a new workforce development program--the Arkansas Mature Worker Initiative. This program will highlight featured employers who have made a commitment to hire mature workers, many of which companies have offices in Arkansas.

“It’s encouraging to see these companies recognize the value of the countless mature workers we have in Arkansas,” said Gov. Mike Huckabee. “I hope more employers see these workers are known to have essential qualities needed for today’s jobs, including loyalty, dedication and responsibility.”

After rolling out a program on the national level, AARP selected Arkansas as a pilot state, and Gov. Huckabee selected the initiative as one of his top priorities for the Arkansas Workforce Investment Board. Several regional meetings will be held across the state to inform employers about the initiative, at which a panel of employers will discuss the initiative and how their companies have benefited from hiring mature workers.

Source: News Release Department of Workforce Services (April 12, 2006)

United Kingdom: Older Workers Filling New jobs

According to an article by Andrew Taylor, the Employment Correspondent for Financial Times, official statistics show that "more than half the jobs created in the past year were filled by people above the state pension age." He reports that various employers’ organisations attribute the rise in the number of working older people to increasing financial pressures created by pensions shortfalls and a growing willingness of employers to take on older staff.

Sam Mercer, director of the Employers’ Forum on Age, said that employers faced with skills shortages were also more prepared to hire older people who were physically and mentally fitter than previous generations. Large supermarket chains, such as Tesco and J Sainsbury, in particular, had made an effort to employ older staff to reflect the balance of society at large and an ageing population that provided many of their customers, she said.

Source: "Older workers take most new jobs" Financial Times (April 12, 2006)

Rising Health Insurance Costs Pressuring Employees Considering Retiring Early

John O'Neil, writing in The New York Times, reports that the evaporation of health benefits for younger retirees will be playing an important role in the final career trajectory of the baby boom generation. "Even more than pensions, they say, retirees' access to health insurance may determine whether the next decade sees an outpouring of late-in-life energy and entrepreneurialism or whether offices will be clogged with workers stuck in their cubicles until they turn 65." In particular, workers need to contemplate having $50,000 to $100,000, or more, to cover health insurance until they qualify for Medicare, assuming they are healthy enough to qualify for insurance at all.

After discussing many aspects of the problem, O'Neil does conclude by pointing out that there are some signs of new alternatives emerging. For example, some states have extended COBRA coverage. In addition, some companyies are exploring the idea of adding or extending health insurance for pre-Medicare retirees, as they try to manage the departure of their baby boom work forces--discovering that a lot of people are hanging around, ready to retire, but they just don't have the benefits."

Source: "Want to Retire Early and Hang a Shingle? It'll Cost You" New York Times (April 11, 2006)

CPA Group Suggests Tough Retirement Years Ahead

A poll conducted by Harris Interactive for the American Institute of Certified Public Accountants (AICPA) shows that 46% of Americans expect to fund their retirement through Social Security and pensions, and an equal number expect that their retirement funds will last them 10 to 20 years. However, 23% have not yet begun to save for retirement, and 47% indicate that while they have started saving, they also admit they have a long way to go.

“A distressing gap exists between the public’s expectations for retirement and the reality," said Carl George, CPA, Chair of the AICPA’s National CPA Financial Literacy Commission and CEO of Clifton Gunderson LLP. "Moreover, too many Americans think they can rely on the Social Security and pension safety net to carry them through. The fact is, Americans must realize they have to take responsibility today for planning and saving for their retirement. Otherwise, they may find themselves working far longer than they anticipated or at a lower standard of living.”

The survey also shows that 39% of survey respondents believe as little as $500,000 will be sufficient to see them through their retirement. However, George noted that when spread out over the course of 30 years, that amount becomes $16,000 a year and would have to take into account uninsured medical costs and other expenses, such as the possibility of assisted living.

Source: News Release American Institute of Certified Public Accountants (April 4, 2006)

Survey: Americans' Retirement Hopes Filled With Holes

According to the Employee Benefit Research Institute (EBRI), a large majority of Americans expect to enjoy a comfortable retirement, but many have not taken the actions needed to turn their aspirations into reality and face the prospect of having to work far longer than they expect. Published as EBRI Issue Brief No. 292, Will More of Us Be Working Forever? The 2006 Retirement Confidence Survey, EBRI's 16th annual survey, suggests that many have accumulated only modest retirement savings, underestimate the share of their preretirement income they are likely to need in retirement, and have made no estimate of how much they will need to live comfortably once they retire.

By the numbers 24% said they are very confident they will have enough money to live comfortably in retirement, and another 44% said they are somewhat confident. Among the survey's highlights:

• 68% of current workers say they and their spouses have accumulated less than $50,000 in retirement savings--including 88% of those 25–35 and 52% aged 55 and older.
• 66% of current workers think they have some chance that they will live until age 90-—or spend 25 years in retirement, assuming they retire at age 65. However, 58% also think they will have less than 25 years of retirement and another 19% are unable to estimate how long their retirement will last.
• 59% said they hope to have a retirement standard of living equal to or higher than in their working years, but only 58% have actually calculated how much money they will need to retire comfortably.

An Executive Summary of the report is also available.

Source: Press Release EBRI (April 4, 2006)

MetLife Survey Finds Retirement a "State" Not a "Date"

According a new MetLife Mature Market Institute® study, older workers are changing the concept of retirement as they live longer and work well past traditional retirement age--some returning to the workforce after they "retire" and/or opting for "portfolios" of paid and volunteer positions. The study--Living Longer, Working Longer: The Changing Landscape of the Aging Workforce--was conducted by David DeLong & Associates, Inc. and Zogby International and examines the actual work experiences of employees age 55-70.

The study found that 78% of respondents age 55-59 are working or looking for work, as are 60% of 60-65 year-olds and 37% of 66-70 year-olds. The "working retired"--workers have actually accepted retirement benefits from a previous employer and then chose to return to work or seek work--represent 11% of 55-59 year-olds, 16% of 60-65 year-olds and 19% of 66-70 year-olds.

Among other things, the survey found that motives for working differ significantly by age, with economic incentives taking precedence among workers age 55-59 (72% of them citing "need income to live on" as a primary reason for working), but narrowing for 60-65 year-olds (60% citing this reason, followed by a desire to "stay active and engaged" (54%) and "do meaningful work" (43%)), and nearly disappearing among 66-70 year-olds, 72% of whom cited the desire to "stay active and engaged" as a primary reason to work, followed by "the opportunity to do meaningful work" (47%) and "social interaction with colleagues" (42%).

Source: Press Release MetLife (April 3, 2006)

Seminar Offered on Managing Health and Productivity of Aging Workforce

The Disability Management Employer Coalition (DMEC) has announced its 2006 Management Series of half day seminars that provide employers with practical problem-solving tools. This year's schedule includes an offering on "Health and Productivity Management with an Aging Workforce," sponsored by UnumProvident. This seminar will:

• Define current health, productivity and economic patterns related to an aging work force
• Illustrate the labor market dynamics that impact hiring, retention and retirement over the next decade
• Present the building blocks of a productive aging program as part of corporate based disability management, benefit design and human resource management strategies.

It will be offered May 18 in Atlanta, GA, May 25 in Newton, MA, September 7 in Santa Clara, CA, September 14 in Tampa, FL, and September 21 in Houston, TX.

Source: Press Release PressWire (April 3, 2006)

Singapore: Survey Shows Over-50's More Committed Workers

An article by Grace Chong in The Business Times reports that recent survey data shows that employes 50 or older show greater commitment and alignment to their companies than their younger colleagues and feel they are better equipped in terms of resources. The findings--derived from Watson Wyatt Worldwide's WorkSingapore study covering about 8,000 employees working in 13 industries--also show that companies with older, and hence more committed, workers see a better financial performance: "Businesses with highly committed workers had an average shareholder return of 23%, while companies with low commitment levels from staff generated returns of only 7%."

Source: "Companies with older workers perform better: study" The Business Times (April 1, 2006)

New Zealand: EEO Trust Launches Survey of Older Workers

New Zealand's Equal Employment Opportunities Trust has launched an on-line survey on how age affects people's experiences at work. Among other things, the survey includes questions about inter-generational conflict, age discrimination, and older people's experiences and preferences at work. According to EEO Trust Chief Executive Dr Philippa Reed, "Older workers are a growing proportion of the labour force so employers looking for the very best people need to know how to create workplaces which suit them."

Source: Equal Employment Opportunities Trust Media Release (March 30, 2006)

Additional Resources: The EEO Trust subsequently issued its finding on this survey.

A Laid-off Older Worker Retrains

Barbara Rose, writing for the Chicago Tribune, tells the story of one 57-year-old worker has started to retrain his hands and his head for a new set of workplace skills after the Chicago lamp factory where he worked for decades closed in 2005. According to her article, he and other Cooper employees qualified for up to 2 1/2 years of unemployment benefits and training through the federal Trade Adjustment Assistance program for workers who lose jobs to foreign competition, but that as few as 15% percent of Illinois workers who are eligible access the training.

"For older workers, a lot of them really question whether they can go back to school," said Rick McHugh, Midwest coordinator for the nonprofit National Employment Law Project.

Source: "Retooling a career, a life" Chicago Tribune (March 31, 2006)

Europe's and Japan's Aging Populations Deterent To Participating in Coming Global Ecnomic Growth

Cisco Systems has released a report showing that, by the year 2020, a new global economic paradigm will emerge defined by the globalization of companies, the increased role of knowledge workers and the personalization of customer experiences as key factors to economic success, with the United States, China and India driving more than half of that growth, while economies of Europe and Japan due to aging workforces or relatively lower levels of productivity will be face challenges.

According to Foresight 2020 Economic, industry and corporate trends, prepared by the Economist Intelligence Unit, the consequences of aging population dynamics will exert a
profound influence on economic development patterns. Some countries will age faster than others. Take the old-age dependency ratios (the over-65s as a share of the population aged 15-64). Whereas the ratio in the EU25 will reach almost one-third in 2020 (it was 25% in 2005), in the US it will rise to only 25%, from 19% in 2005. Japan’s fertility rate, at 1.3 births per woman of child-bearing age, is among the lowest in the developed world. By 2020, the old-age dependency ratio will have risen to 46% (from 29% in 2005). Among the potential risks are slower economic growth, financial-market instability and difficulties in funding pension systems. Countries will have to offset the rising share of pensioners by getting the unemployed into jobs, by making people work longer and by encouraging immigration. More women will be drawn into the workforce, too.

Source: News Release Cisco Systems, Inc. (March 30, 2006)

Canada: Statistics Show a New Retirement

According to New Frontiers of Research on Retirement, a new book released by Statistics Canada, broad social changes are forcing Canadians to rethink their traditional ideas about retirement. Looking at the effect of the baby boom generation's pending retirement, the report centres on four main themes:

• Gender differences: Women are much more likely than men to see retirement as involving more than just getting a pension or stopping paid work.
• Joint retirement: The growing number of women with substantial pension benefits is having a major impact on decisions about retirement in Canadian families. For more and more couples, decision-making is becoming much more complex.
• Maintaining a standard of living in retirement: Amid growing uncertainty about their future financial security, an increasing number of people do not know when they will retire. Others have simply delayed their retirement.
• Flexibilty of retirement paths as some workers opt for self-employment: With a massive wave of retirement looming among baby boomers, the labour supply from older workers will grow in importance. Many will likely choose to become self-employed, making flexible retirement paths more prevalent.

Source: The Daily Statistics Canada (March 27, 2006)

Trucking Industry Getting Help from AARP To Find Older Drivers

In a story for the Worcester Telegram & Gazette News, Martin Luttrell writes that "AARP is hoping to convince some older Americans to step away from their office Macs and into a Mack truck for a second career, hauling freight on the nation’s highways." Working in partnership with the American Trucking Associations and the Truckload Carriers Association, as part of AARP's Alliance for an Experienced Workforce, AARP is recruiting from its membership through AARP the Magazine and the AARP Bulletin.

However, Luttrell says that truck drivers surveyed for his report had mixed responses on how well 50-and-over workers would respond to the program. "Some drivers were enthusiastic, saying that driving is a good second career for someone in an age bracket that has generally good driving skills. Others said long hours, time away from home and low pay would be obstacles."

Source: "AARP, trucking industry seek older drivers to plug hiring gap" Worcester Telegram & Gazette News (March 27, 2006)

Corporate Retiree Health Benefits Continue To Be Scaled Back

Sylvester J. Schieber, director of U.S. benefits consulting at Watson Wyatt Worldwide, writes that the combination of rising health care costs and Medicare coverage means that retiree benefits, as we know them, are disappearing.

As Medicare begins to cover prescription drugs in 2006, the biggest gap in medical benefits for most retirees will be filled. For those 65 and older, coverage from their former employer may no longer be necessary. The large-scale trend away from employer-provided retiree medical benefits not only will continue; it's likely to accelerate.

While the bottom line is that U.S. companies that finance retiree medical benefits are at a competitive disadvantage compared to other companies in their industry that do not offer the benefits so that, over the long term, the inability to compete on costs may inevitably threaten the viability of any company that provides rich retiree health benefits, there is still a need for insurance coverage by those who retire before age 65. "Our challenge is to develop alternate approaches for workers to accumulate assets to cover their insurance and out-of-pocket health costs during retirement, but to do so in affordable and sustainable ways that allow U.S. companies to compete and continue to serve the needs of future retirees."

Source: "Retiree medical benefits-past, present and future" Employee Benefit News (March 2006)

Knowledge Management and Changing Workforces

Jim Murphy, Research Director for AMR Research, writes that, with the urgency of an aging workforce facing companies around the world, "it’s easy to lose a sense of balance. Stemming the brain drain, for many companies, means putting every ounce of effort into capturing what’s in an employee’s head before she walks out the door. HR organizations exert extraordinary effort here, urging departing employees to use their dwindling time to document their knowledge and cram it into a repository."

However, he says that a lack of consideration for transfer and reuse parts of the knowledge management (KM) process can stymie efforts and that, once in the repository, there’s little guarantee that the valuable knowledge ever emerges again. Thus, companies "have got to think ahead. Better KM strategies must account for and capitalize upon the skills and expertise of the incoming workforce, along with the tools they’re already accustomed to and adept at using.

On April 3, 2006, from 11 a.m. to 12 p.m. EST, AMR Research will conduct a live webcast on The Aging Workforce.

Source: "Harnessing Potential: Knowledge Management and Your Incoming Workforce" AMR Research (March 23, 2006)

Towers Perrin Survey Finds Risks, Challenges wtih Defined Benefit Plans

According to a new Towers Perrin survey of senior financial executives in the United States, more than two-thirds of them believe that available solutions to the major risks posed by defined benefit pension plans are usually too expensive or ineffective. The survey, A Problem in Search of Solutions: A Study of Defined Benefit Pensions, reports that the "potential financial impact of a pension plan on an organization is clearly top of mind among plan sponsors and would be significant enough for many executives to consider freezing their plans." Of those surveyed, 32% had already closed their plan to new entrants.

Cecil Hemingway, principal and head of the Legacy Pension Solutions unit at Towers Perrin, says that the study shows that "these plans are still an important employee benefit at many companies," but that CFOs and other financial executives "see a clear link between plan risk and its potential impact on cost of capital, rating changes and other threats to their business plans." He suggests that, as new solutions become available, "plan sponsors need to expand their abilities to assess and evaluate these choices to ultimately determine which best fits their companies' pension situation." However, comparatively few companies have adopted sophisticated processes for evaluating pension risks holistically and over the longer term.

Source: News Release Towers Perrin (March 22, 2006)

Opinion: Age-Based Salary Questioned

Writing as the "Underground Economist" for Slate, Tim Harford, a columnist for the Financial Times, takes on the decades of economic studies that "have produced the conclusion that average wages increase with age almost until retirement, yet average productivity seems to be flat or perhaps even declining after the age of 50." While he recognizes that seniority wages are probably here to stay as long as it is hard to reward good performance instantly and accurately, he suggests that if wages could track productivity better, as they do for the self-employed, both older and younger workers could be better off:

Young workers can rightly grumble that they are paid a pittance for doing valuable work. Older workers also have good cause to worry: They are being subsidized, but subsidies are expensive, and that means they have every reason to fear the sack. Wouldn't it make more sense for young workers to be paid a bit more, old workers to be paid a bit less, nobody to feel exploited, and nobody to fear premature retirement?

Source: "Fire Grandpa! Hire Junior! - Why older workers are paid way too much, and younger workers way too little" Slate (March 18, 2006)

Pension Freezes: EBRI Research Shows Who’s Affected and by How Much

The Employee Benefit Research Institute (EBRI) has published a new analysis that quantifies how workers are likely to be affected by pension freezes, and how much they would have to save in a 401(k)--whether provided by their employer and/or saved by themselves--to offset the loss of accrued benefits from the pension freeze. According to Defined Benefit Plan Freezes: Who's Affected, How Much, and Replacing Lost Accurals, in the March 2006 EBRI Issue Brief No. 921, how an individual worker might be affected by a pension freeze varies widely, based on the terms and natuyre of each plan, but the data “illustrate the general impact of age and tenure: Older, longer-tenure workers tend to be affected by a pension freeze more than younger workers because they do not have as much time left in their working careers in a 401(k) plan to offset the accrual loss from a pension freeze.”

Generally, the report finds that:

• Workers in career-average pension plans would have to save a median amount of about 7% of their annual salary to replace the lost accrual benefits from a pension freeze;<
• Workers in final-average pension plans would have to save a median amount of about
  8% percent of their annual salary;
• Workers in cash balance plans would have to save about 3% percent of their annual
  salary.

An Executive Summary of the report is also available.

Source: Press Release Employee Benefit Research Institute (March 8, 2006)

Commentary: Raising Social Security Age Wrong Response to Longer Lives

William Saletan, who covers science and technology for Slate, responds to the latest U.S. Census Bureau report on aging with its bad news that we are living longer and its good news that we are staying healthy longer by challenging "the intuitive remedy is to raise the retirement age [for Social Security benefits] well beyond the measly increases currently scheduled."

According to Saletan, inequality in how individuals age means that age is a bad proxy for disability, which is a good proxy for need, and that "abolishing age as a standard of fitness would be fairer than simply raising the eligibility age." In addition, he notes that in encouraging the "young old"--the current, healthier experience of being 65 to 74--to keep working, the ADEA has been effective in rooting out rampant age discrimination. He also points out that U.S. jobs have gotten much less strenuous for 65-year-olds since Social Security was created m 1935.

Source: "Curse of the Young Old" The Washington Post (March 19, 2006)

Portion of Older Managers at Restaurants Is Rising

According to a story by Karen Robinson-Jacobs in The Dallas Morning News, although restaurant management has been mostly a young man's game becaue of its long hours, steamy kitchens, and ache-inducing physical demands, "more managers are hawking hamburgers and hash well into their golden years, pulled by sweetened industry incentives and a desire to stay active-–maybe nine-hours-on-your-feet active."

A People Report analysis of data from the U.S. Bureau of Labor Statistics shows that, between 2000 and 2005, the number of restaurant managers ages 25 to 44 dipped from 55% to 54%, while the number of 45- to 64-year-old managers grew from 28% to 33%.

Restaurant companies looking to maintain the skill level found in its veterans are focusing on keeping them on board, said Hudson Riehle, senior vice president for research with the National Restaurant Association.

"It makes sense – particularly at larger companies that have human resource functions that are planning out long term – that when they look ahead, they obviously are going to work harder at retaining those individuals," said Mr. Riehle, mentioning more 401(k) and profit-sharing plans as deal enhancers.

"Unless you have the skill set, customer counts can suffer."

Source: "A little aging helps" Dallas Morning News (March 18, 2006)

Senate Committee on Aging Holds Hearing on Bridging Gender Retirement Gap

On March 15, Oregon Sen. Gordon Smith, chairman of the Special Committee on Aging, held a hearing Wednesday titled "Bridging the Gender Gap: Eliminating Retirement Income Disparity for Women," with a goal of highlighting the challenges faced by women in planning for retirement and to find ways to increase women's savings rates. In his opening statement, Smith pointed out that in addition to earning less than men, many women spend significant periods of time out of the workforce raising children or taking care of elderly parents and are more likely to work part-time or work in industries where employers are less likely to offer retirement benefits. He also pointed to legislative initiatives that he has undertaken to close the geneder gap, as did ranking Democrat Sen. Herb Kohl in his opening statement.

The commitee heard from two sets of witnesses. In the first panel were Jean Chatzky, editor-at-large for Money Magazine and financial editor for NBC’s Today Show, Cindy Hounsell, executive director, Women’s Institute for a Secure Retirement (WISER), Barbara B. Kennelly, President, National Committee to Preserve Social Security & Medicare, and Dr. Jack L. VanDerhei, EBRI Fellow, Employee Benefit Research Institute. In the second panel were Karyne Jones, President and Chief Executive Officer, The National Caucus and Center on Black Aged, Inc., Sara C. Hart, Director, Corporate Benefits, CNF Service Company, and Lynn Rollins, Senior Advisor, Women’s Issues to New York Governor Pataki.

A webcast of the hearings is available online.

In addition, women advocacy organizations, members of Americans for Secure Retirement (ASR), told the Committee about the particulary pressing challenges women face to achieving financial security and independence in retirement. The groups urged the Committee to adopt policies that encourage annuitization as a way to help women ensure a steady stream of income for life.

Source: Press Release Americans for Secure Retirement (March 15, 2006)

OPM Chief Calls for Transitional Emploiyment for Older Federal Workers

According to a report by Karen Rutzick in Government Executive, Office of Personnel Management Director Linda Springer has said that federal employees should be able to work fewer hours in their later career, staving off full retirement. She wants part-time arrangements for longtime federal employees to become common and easier to arrange, as a piece of a plan to cope with an aging workforce in what she termed a "transformation of the mindset."

As part of her agency's commitment to expanding part-time work arrangements, Springer cited a legislative proposal offered in the fiscal 2007 budget, which would remove a penalty to employees in the Civil Service Retirement System for working part-time. The director said OPM is looking to find more ways to promote part-time work.

Springer suggested that many employees want to continue their work in some capacity even after becoming elible for retirement, but "don't want to have to work 40 hours a week." However, she said that instead of boomerangers"--baby-boom generation employees who leave the federal workforce for retirement and then return--she wants employees who "don't leave in the first place," instead opting to cut their hours.

Source: "OPM director pushes part-time work in lieu of retirement" Government Executive (March 14, 2006)

Column: Census Report Brings Good News About Aging

Writing a column for Bloomberg News, Andrew Ferguson hails the good news coming out of the U.S. Census Bureau report on aging. After 20 years of reading "policy weenies" portending national bankruptcy from "the Graying of America, the Aging of the Workforce, the Baby Boom Bust, the Coming Collapse in Unfunded Entitlements," Ferguson hails the picture the Census Bureau presents "of an aging generation that will be working (and paying taxes) longer and placing fewer and less costly demands on the health care and pension systems than we expected."

Source: "An Aging Population Isn't Bad News After All" Bloomberg News (March 14, 2006)

Aging Workers: What To Look for In Workplace Safety

In an article for Occupational Hazards, Robert Pater, managing director of Strategic Safety Associates, argues that, for workplace safety strategists, it is critical to plan for the impacts of an aging work force. In particular, he suggests tht one consider five changes that happen as we age that can directly affect workplace safety:

• changes in balance,
• reduced flexibility,
• impacts on attention, vision, and memory,
• diminishing usable strength, and
• slowing reaction times.

For each of these, he suggests some solutions that transfer skills and methods that will help workers become safer, stronger and more in control, even as they age.

Source: "Safety Catalyst: Boosting Safety With an Aging Work Force" Occupational Hazards (March 13, 2006)

United Kingdom: Report On Employer Practices Relating to Age

The Department for Work and Pensions, in conjunction with the Department of Trade and Industry, has issued "Survey of employers’ policies, practices and preferences" (Research Report 325), which explores the extent to which current employment policies and practices accord with equal opportunity with respect to age.

The report provides findings from a quantitative survey of around 2000 employers in Great Britain, and was designed as a baseline to evaluate the effects of the Employment Equality (Age) Regulations that take effect in 2006. It provides information on practices relating to equal opportunities, pay and benefits, retirement, recruitment, appraisal, training, promotion and redundancy as well as attitudes and awareness.

Source: Press Release Department for Work and Pensions (March 9, 2006)

Germany: Incentives Announced To Encourage Staying on the Job

In response to criticism of the government's plan to raise the retirement age to 67, Germany's labor minister has announced a package of incentives aimed at helping older workers remain on the job longer. According to an article in Deutsche Welle, Labor Minister Franz Müntefering's "50 plus" plan includes state bonuses to support elderly workers in low-wage jobs and financial incentives for employers willing to hire people over 50.

Demographic forecasts indicate Germany's population is greying rapidly, with the age increase accompanied by a decrease in the number of working people who pay into social security. That is making it difficult for the state's pension system to cover growing retirement costs. In the view of Müntefering and his colleagues in the governing coalition of Social Democrats and the Christian Union bloc, getting more people to work longer seemed like the right idea.

Source: "Government Unveils Plans to Keep Seniors Working Longer" Deutsche Welle (March 9,2006)

Census Bureau Highlights Dramatic Changes in U.S.Aging

The U.S. Censusu Bureau has issued a report commissioned by the National Institute on Aging (NIA), a component of the National Institutes of Health, that shows that today’s older Americans are very different from their predecessors, living longer, having lower rates of disability, achieving higher levels of education and less often living in poverty. Among other things. according to "65+ in the United States: 2005", the proportion of Americans with at least a bachelor’s degree grew five-fold from 1950 to 2003, from 3.4% to 17.4% and by 2030, more than one-fourth of the older population is expected to have an undergraduate degree.

Work and retirement was a major focus of the economics section of the report, including such topics as labor force participation rights, transitions to retirement, the work status of older workers, the health, wealth, and education of older workers, reasons for retirement, retirement preparedness, and retirement of the baby boom generation.

Source: Press Release US Census Bureau (March 9, 2006)

Intel Chairman Says IT Industry is Ageist

According to a story by Tom Espiner for ZDNet UK, Craig Barrett, chairman of the board of Intel, criticised the IT industry for being ageist when it comes to recruitment and urged older IT professionals to combat this bias by retraining. Barrett, speaking at roundtable event in conjunction with Age Concern, said "[w]orkplaces should recognise the need for skills, as opposed to having to train people from scratch." and that businesses should focus on ongoing training for staff so they don't become obsolete, while governments should subsidise retraining for the over 50's.

But IT professionals also need to play a role in their own training according to Tristan Wilkinson, the UK public sector director for Intel told ZDNet UK. "If your skill-set is associated with a technology that's approaching the end of its natural life, then you are faced with a choice — you can reskill [sic], or you can follow that technology to the end," he said. "You need to audit yourself and be aware of changes in technology."

However Industry watchers have warned that public sector organisations as well as banks and other financial services companies face a potential legacy skills time bomb. As an aging population of technology workers retire, there could be a severe lack of expertise in programming languages such as COBOL and Fortran.

Source: "'IT industry is ageist' says Intel chairman" ZDNet UK News(March 9, 2006)

United Kingdom: DTI Issues Final Age Discrimination Regulations

The final measures to outlaw age discrimination in the workplace in United Kingdom have been published by Trade and Industry Secretary Alan Johnson today. According to Johnson, "Ageism will affect more people, at some stage in their lives, than any other form of discrimination. But until now the law of the land has allowed it to continue. With these new regulations it will become illegal for workers to miss out on recruitment, promotion or training because of prejudice about their age"

Among other things, the regulations will:

• ban age discrimination in terms of recruitment, promotion and training;
• ban unjustified retirement ages of below 65; and
• remove the current age limit for unfair dismissal and redundancy rights.
• provide a right for employees to request working beyond retirement age and a duty on employers to consider that request;
• require employers to give at least six months notice to employees about their intended retirement date.

At the time of this posting, the final regulations had not yet been posted to the web, but a draft version was available.

Source: News Release Department of Trade and Industry (March 9, 2006)

Russia: Putin Standing By Pension System in Face of Declining Population

According to a report from Lisa McAdams on Voice of America, no country faces as severe a population decline as Russia. "According to the most recent forecasts, Russia's population of 143 million people is expected to decrease by 22% between now and the year 2050. If the figures are borne out, Russia could lose up to 42% of its active working population." Nevertheless, Russian President Putin recently rejected calls to abolish Russia's state pension fund and return to a more Soviet-style system, whereby the elderly would rely on their children, rather than the state, for essential support.

President Putin says Russia will never abandon the pension system. Instead, he says, his government is looking at ways to make it better, especially the question of how to increase today's contributions to the fund so that it can keep up with the expected rise in demand for payouts, with nearly 20 percent of the Russian population now 60 years of age or older.

Source: "Russia Losing Battle in Population Growth to Disease, Low Birth Rates" VOA News (March 8, 2006)

Are the "Best Companies To Work For" Ageist?

According to research carried out by Dr Sharon Bolton, Lancaster University Management School, the annual "The Sunday Times Best Companies to Work For" do not generally reflect age diversity. While companies in the list use it as a tool to position themselves as "employers of choice" and they appear to offer the magical formula of making work fun, Bolton suggests that this "party" culture is also an exclusive club for the under 35's. Analysis of The Best Companies to Work For 2005 reveals that, on average, 56% of employees working for "best companies" are under 35 and only 6% over 55 years old, compared to only 36% of the general working population being under 35 and 15% over 55.

“Top 100 companies are defined by their approach to best practice people management and described by the Department of Trade and Industry (DTI) as a ‘key benchmark’. If these companies are the ‘best’ then they should be investigated as to how this links to the ‘best’ for a diverse workforce. Currently, there is no scrutiny of issues such as gender, race and disability. Given the references to the aging workforce, a demographic time bomb and growing structural inequalities, the UK government should be pointing out that the ‘best’ companies are missing out on some of the ‘best’ the UK labour market has to offer.”

Source: News Release Lancaster University Management School (March 7, 2006)

Labor Department Solicits Grant Applications for Senior Community Service Employment

The Employment and Training Administration of the U.S. Department of Labor has published a notice of availability of funds and solicitation for grant applications for the national grants portion of the Senior Community Service Employment Program. $341 million is being made available for projects that will promote part-time work-based training opportunities in local communities for unemployed, low-income individuals who are age 55 and over, and will foster increased prospects for their economic self-sufficiency. SCSEP is the only nationwide Federal program that focuses on training and placing older individuals into community work-based training and unsubsidized employment.

DOL is especially interested in organizations that demonstrate a partnership with local One-Stop Career Centers and community colleges and that promote employment through high growth job opportunities. Applicants are required to apply for contiguous locations within a state.

The closing date for receipt of applications is April 17, 2006. Full details are available on the DOL website.

Source: Summary Federal Register (March 2, 2006)

U.S. Labor Secretary Opens SAVER Summit To Develop Strategies for Enhancing Retirement Security

The U.S. Secretary of Labor Elaine L. Chao opened the 2006 SAVER Summit by challenging delegates to develop strategies for enhancing retirement security. The Summit is to address obstacles to savings faced by four groups-—new labor market entrants, low-income wage earners, small business employers and their employees, and workers nearing retirement.

Chao's address focused on President Bush’s agenda on pension reform and the Administration’s commitment to work with Congress to pass pension reform legislation that "strengthens the funding of pension plans, provides transparency of information for workers, and stabilizes the federal pension insurance system." Secretary Chao also stressed the importance of access to professional investment advice to improve the choice, control and confidence workers have in their retirement saving plans.

Source: News Release U.S. Department of Labor (March 1, 2006)

United Kingdom: London Assembly Reports On Improving Working Environment for Over-50's

The London Assembly has issued a report finding that the city is the worst place in England to look for a job if you are over 50 years of age. According to the report from the Assembly’s Economic Development, Culture, Sport and Tourism Committee--“UB50?: Access to the labour market for people over 50 in London", inner London has the highest rate of unemployment amongst people over 50 in the whole of the country--twice the national average, and more than 20% of London’s unemployed are over 50. In addition, the report says that recent research found that one in five managers and personnel officers admitted to discriminating against workers on the grounds of age.

While the Assembly welcomes the coming age discrimination protection laws in Britain, it said more neded to be one to help older Londoners. It recommended that:

• there needs to be a coordinated and integrated approach to employment services for older people in London, within an over-arching strategy,
• more accurate research is needed to establish the numbers of older people looking for work, to ensure that the support services for older people receive the funding levels they require, and
• the London Learning and Skills Councils need to prioritise people over 50 for education and training support.

Source: News Release London Assembly (February 28, 2006)

Aging Workforce Driving Businesses To Focus on Human Capital Management

The imminent retiring of an aging workforce and the lack of experienced managers to replace them has led corporate universities to transform their operations to attract, retain and excite the best talent. An article by Jeanne C. Meister in Chief Learning Officer examines how and if corporate universities are offering the right learning to create the business results senior executives demand. She points out that the demographic combination as created a "looming talent management crisis, where an enterprise-wide view of human capital management is more important than ever. But more than anything else, CEOs are starting to see a connection between human capital management and improved workforce performance and productivity. This expanded mission of human capital management is now part of the agenda for corporate universities, and many are reinventing themselves in order to deliver the necessary business outcomes."

Source: "Corporate Universities: What Works and What Doesn’t" Chief Learning Officer (March 2006)

Employers Extending Flexibiliy to Working Snowbirds

Striking a similar theme to a Christian Science Monitor article, Jenn Abelson reports in the Boston Globe about employers, such as CVS, Borders, and Home Depot, that fear labor shortages as baby boomers age and allow workers to transfer to stores in warmer regions during winter. While the snowbird perk is usually available to all employees, it is mainly aimed at older workers. In fact, she reports that CVS has specifically "tried to attract older workers by tapping into senior centers to recruit staff and accommodating employees who have time-shares and second homes."

In addition, to the two-location workers, Ableson notes that employers, such as Bright Horizons, that are already used to offering flexible work environments for employees with young families are finding that older workers are now desiring them, too. Over the past five years, the number of Bright Horizons workers age 55 years and older jumped 81% to 1,054 from 583,and the company says it's willing to accommodate people, even if they want to work from home in warmer locations. Hoffer Serpa, a Bright Horizons spokeswoman, is quoted as saying: "There's a shift that recognized the fact that people without children have their own desires and needs for flexibility, whether it's caring for older parents or changing the place they live....It's easier to retain people than train people and so we want to help support people in every part of their life."

Source: "Snowbirds at work" The Boston Globe (March 1, 2006)

MetLife Survey Finds Employers and Employees Concerned About Aging Workforce, but Not Addressing It

According to the 2005/2006 MetLife Employee Benefits Trend Study, 34% of all employers (and 46% with 25,000 or more workers) agree that the aging workforce will have a significant impact on their company, yet 79% have not taken any steps to accommodate older workers. At the same time, 33% of Baby Boomers have not yet determined when they plan to retire from work, and 58% of young Boomers (age 41-50) are worried that they will have to work either full- or part-time to live comfortably during retirement and 61% say that "outliving retirement money" is their number one retirement-related fear.

"Employers that make a long-term commitment to accommodate their older workers – not just through the physical environment or flexible work schedules, but by providing access to critical employee benefits that can protect an individual throughout their lifetime – will reap the benefits. Many older workers feel a strong sense of loyalty to their companies and expect the same in return. At a time when Baby Boomers are nearing retirement – and increased longevity is enabling many of them to work productively well into their 70s and 80s – older workers may prove to be the solution to the impending talent shortage. It’s crucial for companies to identify a strategy for retaining trained, experienced workers and keeping them satisfied and engaged," notes [Maria R.] Morris [, executive vice president, Institutional Business].

Source: Press Release MetLife (February 28, 2006)

Oil and Gas Industry: Seeking Solutions to Aging Workforce

Various industry and governmental officials at a workforce panel in Midland, Texas, said that while changing demographics and an aging workforce in the oilfields present a daunting challenge to the energy sector, the challenge isn’t insurmountable. According to an article by Bill Modisett in the Odessa American, most of the panelists were looking towards providing a coordinated message in recruiting younger people to work in the industry, particularly at the high school and university level. "Statistics cited during the forum showed many workers in the industry will be retiring in 10 to 15 years, yet a nationwide study showed the number of students graduated with bachelor’s degrees in petroleum engineering is down by 78%."

Source: "Oil industry faces workforce challenges" Odessa American (February 24, 2006)

County Governments To Be Hard Hit by Aging Workforce

Two articles speak to the financial dilemmas facing county governments in the comng years as their workforces age. In Ocean City Today, Christine Cullen writes that while unfunded retirement benefits ended years ago for private employers, only now is the Governmental Accounting Standards Board requiring local governments to fund post-retirement insurance costs during the tenure of the employee. Thus, governments will have to set aside millions of dollars in segregated funds to cover the liability. Thus, for example, while Ocean City, Maryland, paid approximately $200,000 in retiree health benefits in 2003, and in 2005 the county paid close to $2 million, when the new system is in place, the city will pay $2 million annually, while the county would have to come up with $14 million, or nearly eight times the current amount.

Simiilarly, Bill Turque writes in The Washington Post about the job losses governments are facing. "Montgomery County estimates that 50% of its senior managers will be eligible for retirement by 2010. By next year, more than 70% of Fairfax's top officials will be able to leave and collect benefits." His story points out differences fro for public sector managers. For example, while private corporations have long used "succession planning" as a tool to groom executive talent, civil service regulations place sharp restrictions on designating heirs apparent. In addition, not only is the post-baby boom workforce smaller, but it also tends to hold government service in lower esteem than those who came of age in the 1960s and 1970s.

Source: "Health benefit costs could hit hard for governments" Ocean City Today (February 24, 2006)

Source: "Graying of Workforce Troubles County Governments"The Washington Post (February 26, 2006)

Technology Looking to Older Workers To Fill Job Gaps

Following up on the announcement that the Computing Technology Industry Association (CompTIA) has joined the new Alliance for an Experienced Workforce aimed at getting employers to develop strategies of keeping aging American workers viable in the workplace, Marianne Kolbasuk McGee writes in Information Week that within the next four years, "nearly a third of all U.S. workers--including tens of thousands of tech pros--will be over the age of 50, leaving a potential gap of business-tech and vertical industry skills, which also could be worsened on the front-end by a shortage of young people entering the technology fields."

She writes that John Venator, president and CEO of the CompTIA, is encouraging employers to offer older IT workers programs, such as skills certification and training opportunities, to help them acquire new tech skills, boosting their workforce relevance in the years to come. She also cites Quest Diagnostics Inc. as an employer that is already offering work options that older technology workers often find appealing, including telecommuting options, as well as the opportunity to relocate jobs to Quest offices in more favorable climates, like in southern U.S cities.

Source: "Careers: Keeping Older Tech Workers On The Job Longer" InformationWeek (February 23, 2006)

Australia: Jobsharing Offered as Solution for Aging Workforce

A report issued by the Hudson consulting firm suggests that, with Australia’s current skills shortage and the rapid emergence of an ageing workforce, flexible working solutions such as jobsharing will be key to attracting and retaining employees. According to their research, an overwhelming 88% of employers providing a jobshare program believe it has improved their ability to attract and retain employees. Key findings from the report show that:

• Only 40% of Australian employers currently provide a jobshare program to staff;
• 52% of employers and 73% of job seekers surveyed would consider jobsharing as a work option, now or in the future;
• 72% of those employers who would not consider jobsharing believed their role wouldn’t be suitable for sharing; 20% did not know how jobsharing could be applied in their personal circumstance; 8% said they have seen jobsharing poorly implemented in the past

According to Vilma Faoro, National Practice Leader for Hudson JobShare, “[i]t is critical for employers to embrace flexible work options in order to attract and retain talent from a broader talent pool, such as return-to-work parents and mature-age workers transitioning into retirement."

Source: News Release Hudson (February 22, 2006)

Seventh Circuit Allows EEOC To Proceed with Age Bias Claims Against Law Firm

The U.S. Court of Appeals for the 7th Circuit has ruled that the U.S. Equal Employment Opportunity Commission (EEOC) has authority to obtain monetary relief for partners expelled from the law firm of Sidley Austin because of their age. In EEOC v. Sidley Austin, 7th Cir. No. 06-8002, the court held that the EEOC may obtain monetary relief in the case as well as injunctions and that, despite Sidley Austin's claims, there was no bar because the EEOC's "enforcement authority is not derivative of the legal rights of individuals even when it is seeking to make them whole."

Source: News Release U.S. EEOC (February 17, 2006)

United Kingdom: Employers Interested, But Employees Want To Retire

Georgina Fuller reports in Personnel Today that a new survey conducted by Manpower shows that 52% of surveyed employes want to employ staff beyond the age of 65, but 81% of surveyed staff said they would not want to continue working into their late 60s. In addition, 70% of employers said they would offer flexible working in the next 10 years, but just 63% of workers expected to work flexible hours in the future.

Source: "Employers see older workers as answer to skills shortages" Personneltoday.com (February 23, 2006)

Alliance for an Experienced Workforce Launched

The AARP and over 20 major industry associations and membership organizations have joined forces to create and launch the Alliance for an Experienced Workforce in order to promote solution-based strategies for recruiting and retaining 50-plus workers and plan for the demographic challenges that face this country in the years ahead.

"Our research shows retaining an experienced workforce is smart business," said AARP CEO Bill Novelli, who serves as Vice Chair of the Alliance. "That’s why all of these industry leaders are coming together to share strategies on how to recruit and retain the boomer workforce."

Because of the demographic shift expected by the retirement of the baby boom generation, many employers are planning now to retain a competitive advantage as the labor market tightens. The Alliance will cultivate industry-specific 50+ worker best practices on issues including benefits, workplace design, and recruitment strategies.

AARP hopes for the Alliance to serve as a catalyst for bringing government, employers and employees together to help and encourage workers to stay on the job.

Source: Press Release AARP (February 22, 2006)

Other Sources: Press Release Computing Technology Industry Association (CompTIA) (February 22, 2006)

Canada: New Statistics Relating Aging, Health and Work

Using data from the 2003 Canadian Community Health Survey, Statistics Canada has released a study showing that while the people in Canada's labour force who were within 10 years of retirement in 2003 were generally in good or excellent physical and mental health, nearly half a million (19%) individuals aged between 50 and 69 had already left the labour force because of health-related reasons. Individuals not working because of ill health rated their physical and mental health as fair to poor, with chronic conditions such as arthritis and rheumatism, high blood pressure and back problems being common concerns.

Their loss is important because of rising concerns over a labour shortage in coming years as the baby-boom generation nears retirement and the growth in Canada's population slows. In 2002, 20% of workers were within 10 years of the median retirement age, double the proportion 15 years earlier.

Source: The Daily Statistics Canada (February 22, 2006)

Wisconsin Issues Workforce Report on Generational Motivation

In an article for the La Crosse Tribune, Steve Cahalan writes that a new report shows that Wisconsin area employers need to be aware of differences between the four generations i the workplace and find ways to motivate them. The 2005 State of the Workforce Report was released by the Western Wisconsin Workforce Development Board following a survey of 1,570 employees in late 2005. "Members of Generations X and Y tend to be more motivated by flexible hours, co-workers, training opportunities and promotional opportunities, according to the report. Baby boomers and traditionalists tend to be motivated by wages and benefits, it said."

Employees’ retirement plans include working part time for interest or fun, working part time for income, starting their own business or volunteering, the report said. A majority of employees would like to retire by age 55 but do not think they will be financially able to retire until after age 65, it said.

According to the report, labor shortages are expected to occur as baby boomers retire. These workforce challenges will begin about 2008 and peak in 2020.

Source: "Report: Various generations are motivated by different factors at work" La Crosse Tribune (February 21, 2006)

Retirement at 85? Anti-Aging Treatments Might Lead to Demographic Problems

A panel of experts discussed the future of the human life span at a news briefing at the 2006 American Association for the Advancement of Science (AAAS) Annual Meeting and, among other things, examined the potential demographic and economic effects which such life-extension measures could have. Assuming anti-aging therapies could increase life expectancy in the near future, Stanford biologist Dr. Shripad Tuljapurkar created a model examining the demographic and economic effects. "Given a 20-year increase in life expectancy between 2010 and 2030 due to anti-aging therapy--which the panel scientists consider a “moderate” estimate--the model predicts that there will be twice as many American retirees relative to working people. Thus, the dependency ratio would double, as would the cost of Social Security and Medicare. In order to compensate, Tuljapurkar estimates, the retirement age would have to climb to 85."

Source: News Archive American Association for the Advancement of Science (February 18, 2006)

United Kingdom: Employers Respond to Pensions Report

The CBI has unveiled British employers' response to Lord Turner's Pensions Commission recommendations and has proposed to help tackle the UK's emerging pensions crisis without compelling business to contribute to staff pension schemes. CBI argues, in its submission to the Government, that auto-enrolment without compulsion is the best way of increasing pensions saving without undermining existing provision.

The CBI argues that forcing companies into compulsory pensions contributions would put hard-pressed firms, especially smaller ones, under great economic pressure and significantly raise labour costs while failing to boost savings levels overall. Instead, it proposes a Pension Builder plan to boost employee pension contributions, combined with additional support for smaller businesses--either a Partnership Pension in which government matches employer contributions, or a Pension Tax Credit.

Source: Press Release CBI (February 20, 2006)

Community College Uses Bond Issue To Secure Retiree Benefits

Writing for the Hayward, California The Daily Review, Michelle Maitre reports that Oakland's Peralta Community College District is the first in the nation to float a bond issue to cover the ever-increasing cost of retiree health benefits. "Like many districts, Peralta had promised to pay retiree health benefits for life," but funded those benefits on a "pay-as-you-go" basis. However, an aging workforce and rising health care costs are increasingly making that plan untenable.

The bond money has been placed in an irrevocable trust that can be used for only two purposes: paying retiree medical benefits and retiring the bond debt. Peralta Chief Financial Officer Thomas Smith anticipates a 6% annual return over the 45-year term of the bond, enough to finance retiree health benefits and enable the district to repay its debt.

Source: "Peralta innovates funding of benefits" The Daily Review (February 20, 2006)

Australia: Prime Minister Calls for Workers To Delay Retirement

Older Australians need to stay in the workforce, but bosses and employees may have to compromise on hours of work and pay, Prime Minister John Howard says. Addressing an employer group at "The Workforce Tomorrow Industry Breakfast," Howard said that "[t]he bad news is that we are all getting older and as a population Australia is ageing. We are living longer in a healthier fashion and we are therefore facing a significant demographic challenge" and that far too many of the people between 55 and 65 leave the workforce far too early.

Howard said mature workers might find themselves reporting to much younger bosses or having to accept a rearrangement of remuneration structures. In addition, they should be prepared to sign up to part-time work, and people currently out of the workforce on disability pensions needed to be enticed back to work.

According to the Australian Associated Press article on the speech, opposition workforce participation spokeswoman Penny Wong said Mr Howard was acknowledging his government was presiding over a major skills crisis. "But you can't just talk about getting jobs for mature workers and people with a disability--you actually need to invest in their skills so they have the skills an employer needs," she said. "The best way the Howard government can encourage employers to hire jobless Australians is by making sure jobless Australians are ready for work.

Source: "Howard says more older workers needed" Sydney Morning Herald (February 20, 2006)

China: Aging Population and Pension Crisis

Deutsche Bank Research has released a report indicating that China's pension system is facing a demographic time bomb--the consequence of the one-child policy--that could seriously damage its future economic prospects. According to the report ("China’s pension system
Caught between mounting legacies and unfavourable
demographics"), "China is greying fast but at a very low income level. Low effective retirement ages will see the working age population already reaching its peak between now and 2010 and will lift the old-age dependency ratio much higher than conventionally thought." Accordingly, China is getting the demographic profile of an advanced industrial country with a mature welfare system, but with an economy still clambering out of developing status.

Source: "Deutsche Bank: China pensions face crisis" United Press International (February 17, 2006)

Illinois Governor's Budget Proposal To Respond to Aging Nursing Workforce

In his operating budget plan for Fiscal Year 2007, Illinois Governor Rod R. Blagojevich included a series of proposals to to address the shortage of nurses-–expected to grow to 21,000 by 2020 in Illinois--spurred by an aging workforce and increased demand for nurses as baby boomers grow older. Among other things, Governor Blagojevich proposes to:

• Develop the Center for Nursing to develope a strategic plan for nursing manpower in Illinois, maintaining a database on nursing supply and demand, and creating nursing retention and recruitment initiatives;
• offer nursing educator scholarships;<;i>offer grants to nursing schools to help increase the number of faculty;
• make changes to existing nursing scholarship program to allow consideration of merit;
• create student loan repayment program for nurse educators.

The budget message follows up on an earlier announcement by the Governor of his plan of heading off the an anticipated severe shortage of nurses resulting from an aging nursing workforce.

Source: Press Relase Illinois Government (February 15, 2006)

Oil and Gas Industry Being Hit by Aging Workforce

In an article for Dow Jones Newswires, Angel Gonzalez reports that oil and gas companies planning to boost output are nearing a wall: "Nearly half of the aging workforce engaged in exploration and production activities will retire in less than a decade." Thus, their current ambitious projects could come in late and over budget "unless they can hire, and retain, enough people to staff them."

Since oil prices peaked in real terms in 1981, major oil and gas companies have laid off nearly 1.1 million employees, according to energy consultancy John S. Herold. This drove a whole generation of technicians and managers into other industries and discouraged students from entering the field.

Now hard-pressed to increase production and replace dwindling reserves, companies are paying for their old sins. A "very small pool" of talent is "being spread really thin," said Claire Markwardt, a Houston-based partner with Accenture, a consultancy. The amount of talent in the pipeline is paltry, she added. Enrollment in U.S. petroleum engineering programs in 2004 was 2,500, down from 12,000 in 1982.

Also, as many as 40% of U.S. petroleum engineers currently employed will retire before 2014, [Alex} Preston [, head of The Energists, a Houston-based energy recruiting firm] said. The average age of a petroleum engineer, who advises on the best way to develop hydrocarbon reservoirs, is 49 years.

Source: "Experienced Oil And Gas Hands Become A Scarce Commodity" Cattle Network (February 14, 2006)

Phillipines: IT Resource To Replace Aging Japanese?

Japan External Trade Organization expert and chief executive officer of Chinasoft-Tokyo Co. Atsuo Miyazaki is reported in Cebus's Sun Star as saying that Japan’s aging society and shortage of engineers are among the factors that limit the country’s capacity to meet the demand for information technology (IT) services and that Japan "has to face the challenge and go for global sourcing to improve its productivity and enhance its pool of skilled IT engineers."

Accordingly, IT engineers and software companies in the Philippines can take advantage of Japan’s aging population and cater to the Japanese market through offshore development business. The Philippines, he said, has the advantage of having a “bright, flexible and faithful” workforce.

Source: "Filipinos can ‘exploit’ Japan’s aging IT labor" Cebu Sun Star (February 15, 2006)

OECD Issues Summary Report on Aging and Employment Policies

The Organisation for Economic Co-operation and Development (OECD) has issued a report--"Live Longer, Work Longer"--that draws out the main lessons that have emerged from the OECD's 21 country reviews in its series on "Ageing and Employment Policies." To help meet the daunting challenges posed by employment and social policies, practices and attitudes that discourage work at an older age, work needs to be made a more attractive and rewarding proposition for older workers. This report disucsses, among other things, work disincentives and barriers to employment, removing work disincentives and increasing choice in work-retirement decisions, changing employer attitudes and employment practices, and improving employability.

Source: News Release OECD (February 13, 2006)

Drake International's Acquisition of Prime50 To Support Mature Workers

Drake International has announced that Prime50, a provider of employment for Canadians over age 50, has become a part of the Drake group of companies. According to Karen Meredith, President of Drake North America, "With Prime50, Drake's ability to link the mature workforce to organizations looking for those valuable skills and experience will be greatly enhanced" "As our population ages, employers face a shortage of skilled workers, while many workers want the opportunity to continue on in rewarding employment that makes use of their talents and experience," Ms. Meredith said. The Prime50 web site provides a job board with job postings by employers, as well as an opportunity for the aged 50+ job seeker to register and post their resume.

Source: News Release Prime50.com (January 31, 2006)

Staffing Firms Merger Cites Aging Workforce as Driving Force

ZeroChaos, which provides contingent labor management solutions for Fortune 1000 firms, in announcing its acquisition of FlexCorp Systems, a provider of strategic contractor payrolling and staffing solutions to large companies, cited the changing demographics of an aging workforce as crucial to the future needs of its clients:

"In the next four years, nearly 40% of the professional workforce will become retirement eligible," said ZeroChaos CEO Harold Mills. "For large corporations, this aging workforce is creating significant workforce planning concerns. For the employees, the definition of retirement no longer includes fishing or golfing full-time. Companies need the talent and the employees want to work, albeit on their own terms."

FlexCorp Systems founders Irene Cohen and Rick Miners will remain headquartered in New York and specifically focus on helping companies develop their "alumni talent pools", about which the two have authored many articles and books, including Don't Retire, Re-Wire, co-authored by Rick Miners and Jeri Sedlar.

Source: PR Newswire (February 6, 2006)

United Kingdom: Pension Secretary Predicts Rise in Pension Age

According to BBC, the Work and Pensions Secretary John Hutton told a conference organized by the The Work Foundation that some increase in the state pension age from 2020 is "inevitable."

Mr Hutton acknowledged that raising the state pension age was "a fairly blunt tool for changing effective retirement ages".

But he added: "If we aren't prepared to consider the option of raising the state pension age, we will simply pass an even greater burden onto our children."

Source: "Pension age 'set to rise' in 2020" BBC News (February 7, 2006)

Duke Energy Charged with Age Discrimination or 1997 Pension Changes

Mike Drummond reports in The Charlotte Observor that six former and current employees of Duke Energy have filed a lawsuit charging that the company committed age discrimination and violated pension laws when it changed its retirement plan in the late 1990s. Seeking class action status, the plaintiffs claim that as the result of converting the pension plan to a cash balance plan unfairly harmed older workers in violation of the Employee Retirement Income Security Act and the Age Discrimination in Employment Act.

Source: "Duke sued over pension" Charlotte Observer (February 9, 2006)

Companies Providing Two-Location Jobs for Snowbirds

A number of retailers and healthcare providers are implementing snowbird programs, which lets employees shuttle between two locations on a seasonal basis. Thus, as Marilyn Gardner reports in The Christian Science Monitor, for six months of the year, John Johns works as a CVS pharmacist in Sea Isle City, N.J., but every November, he bids his goodbyes and heads to Cocoa Beach, Fla., where, three days a week, he logs 30 hours a week at CVS pharmacies in the area.

In the early 1990s, less than 7 percent of CVS workers were over age 50. By 2005 that figure had risen to 17 percent. "Some need to work," [Steve Wing, director of government programs for CVS,] says. "Some just need to be surrounded by other people."

The company's snowbirds are not entry-level employees. "We're not just using them to pull in carts," Wing says. They include greeting-card specialists, cosmetic consultants, photo supervisors, and managers.

Not all employees who head south for the winter want to work. "Sometimes they just need three or four months off," Wing says. "They can go to Florida, and then we'll rehire them."

Source: "Snowbirds work where it's warm" Christian Science Monitor (February 8, 2008)

Singapore: Companies Commit to Reemploy Retired Workers

Dominique Loh reports for Channel NewsAsia that Singapore's labour movement has signed on 23 companies that have committed to re-employ workers after they retire at 62. In addition, as part of the $30 million effort that the Tripartite Committee on Employability of Older Workers and the Singapore Workforce Development Agency have called the ADVANTAGE! Scheme, the National Trades Union Congress (NTUC) is getting more companies to adjust their work environments, so they can also accommodate older workers.

Some companies say hiring older workers hinge on several factors like work attitude, past performances and the medical and physical well-being of these workers. But NTUC's Secretary-General Lim Boon Heng noted there are other challenges ahead. He said the labour problem for Singapore was even more acute when it comes to women, because they leave the workforce when they start a family to raise children. And as women grow older, the percentage of those who remain in the workforce also drops significantly, and bearing in mind most women also live longer than men. Mr Lim said one way to combat this problem was finding part-time jobs that women can fulfil in the workforce.

Source: " 23 companies pledge to re-employ older workers" Channelnewsasia.com (February 7, 2006)

California: Nevada County and Cities Faces Exodus of Older Civil Servants

Brittany Retherford reports in The Union that Nevada City, California, could lose half of its full-time workers to retirement by 2010, that Grass Valley could see 30% retire by 2008, and that Nevada County, the largest employer in the area, stands to lose the most, as 50% of its nearly 1,000 employees were already eligible to retire by the end of 2005. According to Gayle Satchwell, the county’s human resource director, the county has been preparing for the past two years, readying employees with skills to ease into possible promotions and encouraging longtime employees nearing retirement to store their knowledge in manuals and computer programs to be able to be passed down after their departure.

Source: "County work force ages" The Union (February 7, 2006)

Singapore: ADVANTAGE! Scheme Introduced to Provide Incentives for Employers to Hire Older Workers

Singapore's Tripartite Committee on Employability of Older Workers has released its interim report with a range of recommendations to enhance the employability of older workers. The key recommendations are to introduce the "ADVANTAGE! Scheme," consider legislation for the re-employment of workers beyond the statutory retirement age of 62 and set up a Tripartite Alliance for Fair Employment Practices.

Under ADVANTAGE!, up to $300,000 may be given per company to motivate and enable employers to recruit older workers and to re-employ them beyond age 62 through:

1. Job Redesign, such as to defray the cost of equipment, machinery or process review that raise productivity and help older workers.
2. Training, such as to equip older workers with new skills, enhance their existing skills, or to help them adjust to new work arrangements;
3. Retention Incentive, which can go up to $1,200 per newly hired mature worker aged 40 and above with secondary school education and below over a period of 12 months, or $1,800 over 18 months.

Other recommendations include:

• expanding employment opportunities for older workers;
• enhancing cost competitiveness of older workers;
• raising skills and value of older workers;
• shaping positive perceptions towards older workers

Source: Press Release Ministry of Manpower (Janaury 26, 2006)

Opposition to President's Budget Cuts to Senior Job Program

The National Council on the Aging (NCOA) has announced that it will vigorously oppose a $44 million cut and radical restructuring of the the Senior Community Service Employment Program (SCSEP) contained in President Bush's proposed budget.

"This short-sighted proposal would be a major setback for low- income older workers and the entire aging network," said Howard Bedlin, NCOA's vice president of Policy and Advocacy. It would end a successful system that currently uses national sponsors to carry out most of the program, by block granting all the money to the states, while eliminating the program's historic commitment to community service.

"Eliminating national sponsors from the program would also make it less effective in serving its target population of low- income seniors," Bedlin added. "The national sponsors have proven expertise in serving difficult-to-reach populations."

In addition, NCOA believes that including this contentious proposal in proposals to reauthorize the Older Americans Act, will derail reauthorization and thus prevent Congress from achieving the top priority of the delegates to the recent once-a- decade White House Conference on Aging.

Source: News Release U.S. Newswire (Feburary 6, 2006)

Linkages Between Early Retirement and Poorer Health

Following up on recent findings of a recent study published in the British Medical Journal that leaving the workforce at age 55 doubled the risk for death before reaching age 65, compared with those who kept working beyond age 60, James Pasternak seeks further confirmation. According to one of the authors of “Age at Retirement and Long Term Survival of an Industrial Population: Prospective Cohort Study,” failing health might have played a role in the younger retirees' higher mortality, but data were not available to assess directly whether poor health was a significant factor and it is not clear why continued employment led to longer life, the researchers wrote.

Pasternak reports that a Social Development Canada study released in May 2001 seems to conclude that health, the age of retirement and life expectancy might be intrinsically linked, with the planned age of retirement increasing by 2.5 years for persons who report their health as fair, rising to 3 years for persons who report their health as excellent. However, "[s]peaking anecdotally, Larry Berdugo, a certified financial planner of Toronto-based Independent Financial Concepts Group Ltd has found that early retirement without a road map can lead to malaise, indifference and reduced life expectancy."

Source: "Early Retirement May be Dangerous to your Health" CARP Online (February 2006)

Chief Information Officers Can Help Prevent Baby Boomer Brain Drain

Wtih the oldest baby boomers six years away from retirement, Susannah Patton, writing for CIO suggests that corporate chief informaton officers should be taking "a leading role in preventing baby boomer brain drain by being prepared to respond quickly when management decides the company needs a KM system to help retain crucial knowledge." She discusses projects at Rolls Royce, Northrop Grumman, and others to ensure that knowledge didn't disappear with retiring employees. Among other things, she provides "3 Easy Steps for Preventing Brain Drain":

1. Identify your vulnerabilities. "Many companies don't know where they are most vulnerable to knowledge loss," says David DeLong, author of Lost Knowledge: confronting the Threat of an Aging Workforce. One way to get around this is by doing an age profile of your workforce by work unit or by function. Determine the average age of employees in each unit and identify who's likely to retire or leave the company for other reasons.

2. Identify types of knowledge at risk. Use interviewing and social network analysis software to find out what knowledge is most valuable. This will help you decide where to focus your knowledge-retention efforts.

3. Choose your tactics. If you're focusing on transferring "tacit" knowledge, or experience that is hard to catalogue, establish mentoring programs or communities of practice that bring older and younger workers together for extended periods. If you need to document information quickly before key employees retire, start developing databases and other repositories.

Source: "Beating the Boomer Brain Drain Blues" CIO: Beating the Boomer Brain Drain Blues (Feburary 3, 2006)

Baby Boomer Employees and Age Discrimination Laws Both Show No Signs of Slowing Down

An article by Jonathan Segal for the Society for Human Resource Management's HR Magazine discusses recent polls showing that baby boomers will continue working longer than prior older workers and statistics showing an increase in age discrimination awards. He points out, therefore, that for employers, a graying workforce creates both opportunity and potential liability. "Opportunity lies in using older workers’ skills to fill gaps occasioned by the declining birth rate. But liability will arise if your organization improperly excludes, marginalizes or tosses aside older workers. They will fight back, and they will find strong allies in juries."

Analyzing federal and state age discrimination laws, Segal points out difficulties employers may have in mandating the retirement of high executives, whether voluntary retirement program incentives are really voluntary, and issues about the protection of older workers (over 40) as opposed to "older older" workers (closer to 65).

Source: "Time Is on Their Side" HR Magazine (February 2006)

Candadian Trucking Company Looks to Outside Retirees for Drivers

According to an article by Steven Macleod in Truck News, Coastal Pacific Xpress Inc. (CPX) is recruiting early retirees, among others, to address a critical driver shortage in the industry. Jim Mickey, general manager at CPX, says that people who have retired early from a career outside of trucking make for great truckers because they're motivated, mature, and reliable.

"We greatly value early retirees, people in their 50s, and we believe a career at CPX can work for them," said Mickey. "They may have retired from a job in another industry and still want to stay active. Or, a husband and wife may wish to travel and earn an income at the same time." Often, couples will buy and drive their own trucks instead of driving a company vehicle a "dream situation," said Mickey. He said it offers potential annual earnings of $100,000 per couple.

Source: "CPX eyes young, old workers to alleviate driver shortage" Truck News (February 3, 2006)

Ohio: Pushing To Eliminate Social Security Offset for Unemployment Benefits

According to a report in the Canton Repository, "[a]dvocates for seniors and the jobless are pushing for changes that would allow Social Security recipients who work to draw full unemployment benefits if they lose their job." Policy Matters Ohio is a nonprofit research organization that advocates changing the state’s system, and Ohio’s Unemployment Compensation Advisory Council, which makes recommendations to lawmakers, is expected to discuss the reduction at a meeting Feb. 8.

Source: "Social Security recipients see jobless benefits reduced" The Canton (OH) Repository (Janaury 31, 2006)

Additional Resources:

A Janaury 22, 2006 article in the Columbus Dispatch says that Rep. William J. Seitz, Cincinnati, a Republican state lawmaker, is pushing to end Ohio's "offset" of Social Security. He hopes "to help our senior citizens who are rudely awakened to find their Social Security benefits are offset against their unemployment comp benefits when they have to get a second job merely because Social Security isn't enough."

See prior AgingWorkforceNews.com article on the AARP campaigns to repeal Social Security offset provisions in state unemployment laws.

Commentary: Youthfulness and the Older Worker

Judith Timson writes in the Globe and Mail that for older workers wanting to be professionally wanted in a youth-obsessed culture have apparently found a solution--"We're not young any more, we're 'youthful.'"

Whenever I read the word "youthful" applied to anyone over 40, as it is frequently these days, I ask myself: Is this relentless need to redefine the middle-aged as young -- or, more importantly, not old -- a desperate bid by the boomers to hold on to the spotlight at all costs?

Or have we successfully reframed the idea of aging and, with all sorts of new cosmetic, spiritual and physical avenues, simply set the bar higher for how we are all supposed to look and feel?

Referring to the "countless articles and websites offering advice to midlife job seekers worried about appearing old," she says many are absurdly obvious, but she also senses that women in today's work force still have to worry more about aging than men do. However, she suggests that looking good (not necessarily youthful) and looking fit are especially important for older workers looking to get ahead. On the other side, there are certain behaviours that signal "older worker:" "Going to a business event, for example, and reminiscing about the past the whole time -- not a good thing. A few old combat stories are fine but then go ask younger colleagues what stirs their interests in your field these days. You have to stay curious to stay youthful."

Source: "Youthful is as youthful does" The Globe and Mail (February 1, 2006)

Asia: University of Chicago Executive MBA Program Attracts Older Ages

Writing in The Korea Times, Chung Ah-young reports on an executive MBA (EMBA) program that will help seniors successfully continue developing their business skills over their long careers in an aging society. According to the article, "Beth Bader, managing director of the EMBA Asia program of Graduate School of Business of the University of Chicago in the United States, said getting an adult education and continued investment in oneself, through the EMBA course, are crucial in almost any field, for successful long-term careers."

``People begin to realize they don’t want to spend their whole or half their life just declining as they are getting older. In a sense, they can reinvent themselves, if they want to do that. Or they can make a very significant jump in their abilities and flexibilities in the very specialized business program,’’ Bader said.

She stressed that in societies with aging populations, people hope to work longer.

``That’s why I predict more demands for the EMBA course for older ages and more mature-aged students here in Korea and other aging countries. Particularly, business in Korea has been much more mature. People are going to need to work a lot longer than they have done in the past. I think it has happened already in the United States,’’ she said.

Source: "Executive MBA Program Targets Seniors" The Korea Times (February 1, 2006)