March 17, 2018

Delayed Retirement: A Possible Win-Win?

By Joan Andrews, RTWBC

As we continue to discuss the skills gap, is the delayed retirement trend a win-win for both employers and workers? 

Fact: more than half of American baby boomers plan to work past age 65 or potentially not retire at all. According to a report by the Transamerica Center for Retirement Studies, myriad concerns drive this trend: worry about outliving savings, concerns over a reduction in Social Security benefits, and the real possibility that someday expensive long-term medical care may be needed.

Can these older – potentially retrained – workers be part of the skills gap solution? Employers need to consider their transferable skills learned from years of professional experience. With rapidly evolving technologies, technical skills development alone is insufficient. Mental agility and adaptability will increasingly become the more valuable requisites. Some employers are embracing the value of older workers, perhaps even those that have experienced long-term unemployment as they are familiar with the necessity of ongoing training and are motivated to keep learning. 

Aging out of the Workforce – Part of the Problem 

To be sure, boomer retirement is a large contributor to the skills gap itself. According to Susan Brower, Minnesota State Demographer, the workforce gap problem isn't going to fade anytime in the near future. "We're moving into a period of really slow labor force growth, meaning it's going to be hard to find workers to fill the jobs we have and that's something that is just the outcome of our demographic of people aging," said Brower.

Finding solutions to this looming challenge is the purpose of the Northeast Minnesota Regional Workforce Solutions Series launched this year. With boomers retiring and technical skills evolving, Brower rounded out her message with the fact that employers will “need to become more and more creative about how they find employees and how they keep employees."

Wisdom of the Aged – Part of the Solution

Yet the aging workforce itself may also be part of the solution. While boomers continue to retire, many workers are opting to delay retirement, and many are eager to take on new responsibilities.

According to Brett Gerrish, the delayed retirement trend helps manufacturers ease the shortage of younger skilled workers, communications coordinator at the Michigan Manufacturers Association. Among employed adults in the U.S., 39 percent now expect to retire after age 65, compared with 14 percent in 1995, according to Gallup’s annual Economy and Personal Finance survey. According to the Bureau of Labor Statistics, the growth of workers from 55-75 is expected to be 4.5 percent and those over 75 will grow by 6.5 percent – a partial solution to the workforce skills gap.

Huntington Ingells, the largest military shipbuilder in the US, does not see age as a limit. They have individuals from all ages entering their apprenticeship programs, individuals well past the traditional age of apprentices. It takes many years to be an expert shipbuilder and currently over 50% of their staff is eligible to retire.

Creative Solutions: Retraining and Retaining Would-Be Retirees

It’s true that physically demanding jobs make take their toll on aging workers – but that does not necessarily mean they are entirely out for the count. It just may require a bit of ingenuity and flexibility on the part of the employer. Skilled technicians can be retrained for office roles, bringing their hands-on technical knowledge to the table. It’s a win-win: the worker can stay employed while the business retains an employee already intimately familiar with the business and its product. Positions remain filled, and employers can bypass the hiring and training expenses incurred from new hires.

When hiring from outside the firm, older workers leaving other companies can also bring much-valued experience and industry knowledge. PKF O’Connor Davis, an independent accounting firm in Woodcliff, NJ believes that hiring older workers has been a homerun for them. Hiring individuals leaving other accounting firms, the firm benefits from their years of experience.

Some companies have also implemented intergenerational mentorship programs. Older, more experienced workers can impart their deep industry knowledge to younger employees. In return, the younger employees can help their older counterparts get comfortable with new technologies. 

Last summer, AARP Michigan launched Experience for Hire, a program that matches experienced workers age 50 and older with job openings. In New Jersey, the New Start Career Network engages employers in job fairs where they will consider long term unemployed workers.

Employers throughout the country are creating innovative hiring practices and in doing so are achieving true diversity and inclusion while filling their pipeline with valuable talent. 
We’d love to hear from you – what is your company doing to retrain and retain older workers? How are you filling your talent pipeline and resolving the skills gap?

If you are looking for advanced training on inclusive hiring practices, we encourage you to learn more about our Talent Acquisition Masterclass Certification

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Ready To Work Business Collaborative, founded by a collective of Fortune 500 companies, is committed to working cooperatively to develop hiring best practices that target the long-term unemployed, under-employed, people with disabilities, military veterans, and Opportunity Youth. The RTWBC accomplishes this mission through collaboration, thought-leadership, and services that support employers who desire to serve these talent pools better.

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Ready To Work Business Collaborative works cooperatively to help employers develop hiring best practices that target the long-term unemployed, underemployed, people with disabilities, military veterans, and Opportunity Youth.

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