St.Louis Business Journal
UPCOMING LABOR SHORTAGES MEAN WORKPLACES MAY NEED TO BECOME FRIENDLIER TO OLDER WORKERS

By Anna Navarro

July 2005  

Author's note: Client stories in this column are based on actual situations fictionalized to protect privacy and told with permission.

There is a skilled labor shortage just around the corner that was set in motion by a drop in birth rates about 30 years ago. And there are healthy and skilled boomers without enough savings for a comfortable retirement who would like to work beyond age 65. But what might be a win/win situation could well become lose/lose if the workplace isn't restructured to effectively utilize the talents of older workers.

The end of World War II brought with it an explosion in the birthrate. But that boom only lasted about 20 years. Fertility rates dropped from 3.5 children per woman in the 1950's to about 2 in the 1970's. The "birth dearth" generation that followed the boomers is why we are likely to have a shortage of skilled workers in the not too distant future. There just isn't enough mature talent in the pipeline.

Simultaneously, many boomers approaching retirement age would welcome the opportunity to keep working both for the sheer satisfaction of continuing to be productive and for financial reasons. Social Security and Medicare seem unpredictable at best. And few people have enough individual savings to see themselves comfortably through the end of life. But those who try to extend their work past 65 often encounter serious barriers in the workplace.

Michael was a highly skilled consultant specializing in regulatory compliance in the financial area. He was 60, loved what he did, and he was good at it. But he traveled 80% of the time and worked 12-14 hour days under constant pressure. It was too much for him.

He wanted to keep working but work less. His financial needs were lower than in the years when he was sending his kids to school, yet he didn't have enough money saved to retire at his current lifestyle.

When he checked into the options for reducing his workload he learned that the firm actively discouraged that route. He knew, of course, that poor performers in the firm received a lower commission rate. But he discovered even excellent consultants were penalized if their volume went down. If his billings dropped by half, his commission rate would drop from 25% to 10%. That meant that for 50% of his prior effort, he'd only get 20% of his prior compensation.

Given this set of choices, Michael opted to quit. He came to see me to figure out an alternative career. He is now working as a small-scale real estate developer, and enjoys the work. It challenges him, gives him more time off and doesn't require travel. But he went through a period of being unproductive and grieving his old job. And his excellent skills in regulatory compliance aren't being used.

Michael's firm quickly filled the gap he left. They had a cadre of seasoned consultants in their 50's who continued the work he had underway. But what if the firm hadn't had a group of experienced professionals in the pipeline?

This is the dilemma many organizations may face as the "birth dearth" generation comes to bat. And the pipeline problems won't be limited to highly specialized consultants. The National Restaurant Association projects a shortage of 1.5 million restaurant workers by 2014. More than a quarter of all postal workers who were employed in 1998 will reach retirement age by the end of 2008. So will one in five members of the clergy.

Under these circumstances, employers might be wise to consider restructuring their systems to be more accommodating to older workers, especially those with valuable skills. Otherwise they are soon likely to encounter bottlenecks in productivity that occur when businesses can't find enough seasoned talent.

Primary among the needed accommodations are breaking down work into smaller chunks that can be done well in fewer hours. And removing the punitive aspects of compensation and benefit programs to make them more "friendly" for less than full time workers, (though wage rates may need to be somewhat lower to absorb higher overhead).

Other areas that may need attention are communication processes, creating opportunities for synergy between part-time co-workers, and rethinking space to accommodate more people doing the same volume of work.

Every one of these changes is a major undertaking. Restructuring the workplace isn't easy and it is likely to take years to accomplish. But without it, the win/win potential of the demographic and retirement challenges we are about to face will be in jeopardy.

Anna Navarro is the founder of Work Transitions, a nationwide career consulting firm that trains independent career strategists and consults with individual clients.

This column was originally published by the St. Louis Business Journal. The actual title of the column and date in which it appeared in the Business Journal may be slightly different from what appears on WorkTransitions.com.