Recently, Federal Reserve Vice Chairman Donald Kohn testified before the U.S. Senate Special Committee on Aging. "The share of the adult population that is aged 62 and older, now at about 19%, is projected to rise to more than 22% by 2015," said Kohn. "The rising share of older individuals has important implications for the nation’s labor supply. In particular, the aging of the population will put significant downward pressure on the total labor force participation rate in coming rate."
Employers will, in the future, be forced to replace their aging staffs with newer and younger employees; unless, of course, they take steps to curb the impending wave of retirees now. "It’s really about planning ahead," said Fred Getz, Executive Director of Robert Half International’s Salaried Professional Service. Getz suggested that, before going out to hire a number of fresh graduates, take stock of who in the company will be eligible for social security benefits and see where they stand. "If you’ve got an older person in your department, go talk to them to see what they’re thinking," he said. "A lot of older people feel they might have to save some money." Getz said that, given the current trend of shrinking pensions and rising healthcare prices, "everyone’s nervous" and suggests that companies ask these employees what their plans are and how long they plan to stick around. Cutting turnover by offering raises, better benefits and flexible work schedules to older employees will also help to curb your labor losses, said Getz.
"They’ve got to look at how they’re staffing," said Getz. "Are we just hiring people to fill people’s jobs?" Companies that hire people just fill holes in the staff are missing out on a key opportunity to nip the retirement boom in the bud. "[Companies should] work a little harder at getting people in that are promote-able," he said, adding that the best solutions to the staffing question usually come from within the company.
If the company’s willing to flex a little bit, Getz said, then they could consider hiring people with relevant skill sets and spend more time on training. Getz noted that people in bookkeeping, accounting and sales positions could all have the potential for a successful career in commercial credit and also noted the other benefits of hiring from within the company’s ranks. "I think it’s always a great measure of good will," he said. "It shows loyalty to the employees."
When hiring newer, younger employees, Getz recommended that companies offer prospects a position that promises the possibility of growth and advancement. "That’s the kind of thing that younger people are craving," he said, suggesting that employers offer a clear path to greater success for candidates. Getz also recommended gauging the interest of seasoned employees, and potential retirees, in being mentors for new hires.
Some companies also might be tempted to make a minimum number of hires and increase the use of automated operations like credit scoring and other technologies. "While that reduces the number of lower level people," said Getz, "a lot of companies are finding they need higher level skill sets."
"All they’re doing is hiring more sophisticated people," said Getz. "Losing those lower level jobs isn’t a bad thing."
Kohn’s testimony before the Senate ended with a brief but grim reminder: "If we do nothing, it will, by default, fall entirely on future generations." This statement applies to individual citizens as much as it does to companies, and it makes sense to take action now, rather than scrambling for employees once the retirement wave hits.
Source: Jacob Barron, NACM Staff Writer, and Fred Getz, Executive Director of Robert Half International’s Salaried Professional Service