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About This Research
SHRM and the SHRM Foundation have
launched a national initiative to highlight
the value of older workers and to iden-
tify—through original research—best prac-
tices for employing an aging workforce.
This three-year initiative is generously
underwritten by a grant from the Alfred P.
Sloan Foundation.
The purpose of this research is to:
■■ Investigate the current demographics
of organizations and their views on how
the demographic breakdown of their
workforces is likely to change in the
future in both their organizations and
industries.
■■ Determine what, if any, actions
organizations are taking to prepare for
an aging workforce, including recruiting
and retention strategies to specifically
target older workers.
■■ Identify the skills and experience
HR professionals most value in older
workers.
As in many developed nations around
the world, the United States has an aging
population and an aging workforce. The
U.S. Bureau of Labor Statistics forecasts
that by 2016 one-third of the U.S. labor
force will be in the 50-plus age category,
compared with 27% in 2007. Now that the
large Baby Boom generation has reached
retirement age, organizations are faced
with the prospect of losing many workers
with key talents, experience and skills. The
percentage of retired Baby Boomers has
nearly doubled since 2010 when the U.S.
Census Bureau found that 10% of Baby
Boomers were retired. The dual challenges
of dealing with skills shortages as many
older workers retire and of building a more
age-diverse workforce are therefore front
and center in the minds of both policy-
makers and business leaders.
As part of the SHRM and the SHRM
Foundation three-year initiative supported
by a grant from the Alfred P. Sloan Foun-
dation, SHRM Research conducted a
survey of HR professionals to learn more
about how organizations are preparing for
an aging workforce, including the current
demographics of organizations and the
respondents’ views on how the demo-
graphic breakdown of their workforce
is likely to change in the future in both
their organizations and industries. The
survey was organized into three parts:
■■ The state of older workers in U.S.
organizations.
■■ Recruiting and retaining older workers.
■■ Basic and applied skills of older workers.
DEFINITION
For the purpose of this survey, “older workers” were defined as employees 55
years of age or older.
Executive Summary	
Preparing for an
Aging Workforce
DATA HIGHLIGHTS:
State of Older Workers
in the Workplace
■■ Are organizations preparing for an
aging workforce? More than one-third
of respondents (36%) indicated their
organization was preparing for the
projected increase in the proportion
of older workers in the labor force by
“beginning to examine internal policies
and management practices to address this
change;” one-fifth (20%) reported their
organization had examined their workforce
and determined that no changes in their
policies and practices were necessary.
Another one-fifth (19%) of respondents said
their organization was just becoming aware
of the potential change in the projected
increase in the ratio of older workers in the
labor force.
■■ DoHRprofessionalsseetheaging
workforceasapotentialproblem? Few
HR professionals believe the impact of the
potential loss of talent due to retirement of
workers is considered a crisis (3%-4% in the
next five years) or even a problem (18%-24%
in the next five years) in their industry.
■■ Areorganizationsmakinganychanges
inresponsetoanagingworkforce?
One-third or less of respondents indicated
the increasing age of their organization’s
workforce had prompted changes in general
management policy/practices (28%), reten-
tion practices (33%), and recruiting practices
(35%) to “some” or “a great extent.”
The Aging Workforce and the State of Older
Workers in U.S. Organizations
The first part of this research aims to
uncover the proportion of older workers
in different industries, how aware orga-
nizations are of the impending demo-
graphic shift toward an older workforce
and what, if any, actions organizations
are taking to prepare for this shift.
The findings show that accommodation
and food services, retail trade, wholesale
trade, and transportation and warehous-
ing employ significantly fewer older work-
ers than the other industries (see Figure
1). HR professionals in industries with
higher numbers of older workers, such as
the government sector, will be among the
first to deal with the challenges associ-
ated with an aging workforce, and these
industries will be a bellwether that may
demonstrate what other industries may
eventually experience.
More than one-third of respondents
(36%) indicated their organization was
preparing for the projected increase in the
proportion of older workers in the labor
force by “beginning to examine internal
policies and management practices to
address this change.” However, one-fifth
(20%) of respondents reported their orga-
nization had examined their workforce
and determined that no changes in their
policies and practices were necessary;
another one-fifth (19%) indicated their
organization was just becoming aware of
this potential change in the ratio of older
workers (see Figure 2).
The survey also found that less than
one-third of HR professionals believed
the potential loss of talent due to retire-
ment of workers was considered a crisis
or even a problem in their industry. The
apparent lack of concern about this loss
of talent is somewhat surprising given
the newly revived debate on skills short-
ages and rising recruiting difficulty.
This may be due in part to missing
information around precisely when
and how these changes will take effect
within a given industry or organization;
2 Executive Summary: Preparing for an Aging Workforce
Figure 1. Percentage of Older Workers, by Industry
Accomondation and food services, retail trade, wholesale trade, and transportation and warehousing
Construction and repair and maintenance
Educational services
Finance, insurance, and real estate
Government agencies
Health care and social assistance
Information and professional, scientific and technical services
Manufacturing
Mining, quarrying, and oil and gas extraction
Religious, grantmaking, civic, professional and similar organizations
Utilities
Other
23.1%
24.2%
24.4%
28.7%
29.3%
29.9%
26.0%
26.6%
27.0%
29.5%
29.1%
22.9%
Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
Figure 2. How Organizations Are Preparing for the Projected Increase in the Proportion of Older Workers in the Labor Force*
Beginning to examine internal policies and management practices to address this change
Have examined our workforce and determined that no changes in our policies and practices are necessary
Just becoming aware of this potential change
Not aware of this potential change
Have implemented specific policies and management practices
Have proposed specific policy and management practice changes
Have agreed on a plan to change policies and management practices
36%
20%
19%
13%
6%
5%
2%
Note: n = 1,715. Percentages may not total 100% due to rounding.
* Question as asked in the survey: “According to the Bureau of Labor Statistics, workers 55 years of age and over are projected to make up approximately 26% of the labor force by the year 2022, compared to 21% in 2012 and 14% in
2002. As the proportion of older workers increases, the potential impact resulting from the loss of their knowledge and experience may become more substantial. Which of the following best describes your organization’s preparation
for this change?”
Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
Accommodation and food
services, retail trade, wholesale
trade, and transportation
and warehousing employ
significantly fewer older
workers than the other
industries.
Executive Summary: Preparing for an Aging Workforce 3
Recruiting and Retaining Older Workers
With many organizations appearing
to be relatively unconcerned about the
impact of demographic changes on their
workforce and the potential impend-
ing loss of a large number of their
best workers, it is not surprising that
most are not making changes to their
management or recruiting and retention
practices in preparation for these shifts.
Less than one-third of respondents
said that the increasing age of their
organization’s workforce had prompted
changes in general management policy/
practices (28%), retention practices
(33%) and recruiting practices (35%) to
“some” or “a great extent” (see Figure
4). Meanwhile, over one-half of orga-
nizations (54%) reported they did not
actively recruit older workers.
Among respondents who said that the
increasing age of their organization’s
workforce had prompted changes in their
recruiting practices, the most com-
monly reported recruiting method to
directly target older workers was through
employee referrals (33%); one-quarter
(24%) indicated they relied on networking
(see Figure 5).
When it comes to the difficulty orga-
nizations experience in recruiting older
workers, less than one-quarter of organi-
zations said they found it either “easy” or
“extremely easy” to recruit exempt and
nonexempt older workers (21% and 24%,
respectively); about two-fifths of organiza-
tions reported it was “easy” or “extremely
easy” to retain exempt and nonexempt
older workers (45% and 42%, respectively),
as shown in Figures 6 and 7.
Figure 3. The Percentage of Organizations That Have Conducted a Strategic Workforce Planning*
Assessment to…
Analyze the impact of workers age
55+ leaving your organization
Identify your
future workforce needs
1–2 years 3–5 years 6–10 years
Identify your potential skills gaps
35%
31%
17%
58%
44%
21%
52%
39%
20%
*Strategic workforce planning is a process used to ensure an organization takes into account the future loss of knowledge through employee resignations/
retirements and the projected knowledge/personnel resources required to achieve the organization’s goals.
Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
Figure 4. Extent Increasing Age of Organization’s Workforce Has Prompted Changes in…
Generalmanagementpolicy/practices
Retention practices
Recruiting practices
4%
7%
8% 27% 24% 41%
24%
26% 26% 42%
31% 41%
To a great extent To some extent To a small extent Not at all
Note: n = 1,832-1,843. Respondents who indicated “Not applicable” were not included in the analysis. Percentages may not total 100% due to rounding.
Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
DATA HIGHLIGHTS:
Recruitment and Retention
of Older Workers
■■ Doorganizationstrackimpending
retirements? One-half (50%) of HR profession-
als said their organization tracked the percent-
age of employees eligible to retire in the next 1
to 2 years and fewer beyond that time frame.
■■ Doorganizationshaveformalstrategies
for attracting and retaining older
workers? Very few organizations reported
having a formal strategy for retaining (4%)
and/or recruiting (3%) older workers.
■■ What are the barriers to retaining older
workers? Flexibility in work location (47%),
career flexibility (45%), work hour flexibility
(44%) and work schedule flexibility (43%)
were cited most frequently as factors that
contribute to difficulties in retaining older
workers. More than one-third of respondents
who indicated it was “difficult” or “very
difficult” for their organization to retain older
workers compared with other workers cited
their organization’s inability to offer flexibility
in type of employment (e.g., consultant work,
temporary work, etc.) (38%) and/or benefits
attractive to older workers (e.g., different
health care benefits, wellness plans) (34%)
as top challenges.
just one-half of HR professionals indicated
their organization tracked the percentage of
employees eligible to retire in the next 1 to
2 years, and even fewer forecast workforce
demographics beyond that time frame. As
shown in Figure 3, about one-fifth or fewer
of organizations have conducted workforce
assessments around the loss of workers age
55 and older, identifying future workforce
needs and potential skills gaps in the six-
years-and-beyond time frame.
Overall, the findings suggest that many
organizations may not be fully aware of the
various ways these demographic shifts will
influence their organizations.
Some organizations do find it difficult
to recruit and retain workers in this
demographic. Among the respondents
who indicated it was “difficult” or “very
difficult” for their organization to retain
older workers compared to other work-
ers, a lack of flexibility was a key issue
that acted as a barrier (see Table 1).
When asked about the type of older
workers (i.e., job classification) they
found difficult to recruit, about one-
quarter of organizations reported it was
difficult/extremely difficult to recruit
older workers qualified for skilled labor
(25%), executive (25%), salaried individ-
ual contributor/professional (22%) and
management (22%) positions compared
to other workers; less than one-fifth
indicated the same for labor, low-skilled
positions (17%) and few for administra-
tive/secretarial positions (7%). Regard-
less of the type of position, a lack of or
few applications from older workers who
are qualified compared to other workers
was the most cited difficulty in filling
positions with older workers (46%-60%).
One trend that has been discussed in
relation to the Baby Boom generation is
the desire to continue to work beyond
retirement age, possibly in a completely
new field or career. Thus, the survey
asked HR professionals if their organiza-
tion employed workers who had retired
from other organizations or careers. The
survey findings suggest that this may be
relatively common as two-thirds (66%)
of respondents indicated their organiza-
tion employs older workers who retired
from other organizations or careers
before joining their organization. How-
ever, these types of workers do not make
up the majority of older workers in any
given organization. An overwhelming
majority of HR professionals (90%) said
only 1% to 20% of their organization’s
older workers had previously retired
from other organizations or careers.
Of respondents who reported their
organization employed older workers
who retired from other organizations
or careers before joining their organiza-
tion, almost half (46%) indicated that
older workers in this group were mixed
between full- and part-time status.
The survey findings also support the
claim that finances are an important
reason that post-retirement individuals
return to work. Almost three-quarters
(72%) of HR professionals reported
that for employees who joined their
organization after retiring money was
a factor. More than half (58%) reported
enjoyment/occupying time was a factor,
and about two-fifths said health care
benefits (45%) and social interaction
(42%) contributed to the decision to
return to work.
Over three-fifths (61%) of respondents
indicated their organization attempted
to capitalize on and incorporate the
experience of older workers to “some”
or “a great extent.” Although organiza-
tions make efforts to capitalize on the
4 Executive Summary: Preparing for an Aging Workforce
Figure 5. Recruiting Methods Used by Organizations to Directly Target Older Workers
Employee referrals
Networking
Internet (e.g., websites geared toward older audience)
Use of current older workers as recruiters
Employment agencies
Social media
Temporary firms
Executive search firms
Specifyolderworkersarewelcomeandareencouragedtoapply
Government-based employment programs
Churches
Other
Recruit through local senior citizen community groups
Older workers’ job fairs
Retirement communities
Newsletters (e.g., AARP Bulletin)
We do not actively recruit older workers
33%
24%
14%
13%
13%
12%
11%
8%
7%
6%
4%
3%
2%
1%
1%
3%
54%
Note: n = 1,074. Only respondents who indicated the increasing age of their organization’s workforce had prompted changes in their recruiting practices
were asked this question. Percentages do not total 100% due to multiple response options.
Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
Figure 6. Difficulty Recruiting Older Workers Qualified for Positions Compared With Other Workers
17%
17%
61%
59%
21%
24%
Extremely difficult/Difficult Neither easy nor difficult Easy/Extremely easy
Exempt older workers
Nonexempt older workers
Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
Figure 7. Difficulty Retaining Older Workers Qualified for Positions Compared With Other Workers
9%
10%
46%
48%
45%
42%
Extremely difficult/Difficult Neither easy nor difficult Easy/Extremely easy
Exempt older workers (n = 1,826)
Nonexempt older workers (n = 1,804)
Note: Percentages may not total 100% due to rounding.
Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
experience of older workers, very few have
a formal strategy for retaining (4%) and/
or recruiting (3%) this group. Of respon-
dents who said their organization had a
formal strategy to recruit and/or retain
older workers, many used flexible working
options to attract and retain this segment
of the workforce (see Table 2).
Of respondents who indicated their
organization had taken a specific step(s)
to recruit and/or retain older workers,
the majority reported that hiring retired
employees as consultants or temporary
workers (67%), offering reduced hours or
part-time positions to older workers (57%)
and starting flexible scheduling (63%)
were “very effective” in recruiting and/
or retaining older workers. However, less
than one-quarter said that more than half
of their eligible employees used reduced
hours or part-time positions (21%), flex-
ible scheduling (24%) or phased/gradual
retirement (16%) programs for older
workers. Instead, about half reported
just 1% to 25% of their eligible employees
used reduced hours or part-time posi-
tions (45%) or flexible scheduling (46%)
programs for older workers; more than
three-fifths (63%) indicated the same for
phased/gradual retirement programs.
Skills and Older Workers
The final section of the survey evaluated
the skills of older workers. Listed below are
the overall advantages of older workers fol-
lowed by the basic and applied skills orga-
nizations indicated they most value in older
workers compared with other workers:
Executive Summary: Preparing for an Aging Workforce 5
Table 1. Factors That Contribute to Difficulties in Retaining Older Workers
My organization is unable to offer…
Flexibility in work location (e.g., working from home, satellite offices) 47%
Career flexibility (e.g., reduced responsibilities, job change/occupation shift) 45%
Work hour flexibility (e.g., reduced hours, job-sharing, phased
retirement, part-year employment) 44%
Work schedule flexibility (e.g., changing starting and ending times periodically, compressed workweek ) 43%
Flexibility in type of employment (e.g., consultant work, temporary work) 38%
Benefits attractive to older workers (e.g., different health care benefits, wellness plans) 34%
Other 15%
Note:n=242.Onlyrespondentswhoindicateditis“Difficult”or“Verydifficult”fortheirorganizationtoretainolderworkerscomparedtootherworkers
wereaskedthisquestion.Percentagesdonottotal100%duetomultipleresponseoptions.
Source:ExecutiveSummary:PreparingforanAgingWorkforce(SHRM,2014)
Table 2. Steps Taken to Recruit and/or Retain Older Workers
Offered reduced hours or part-time positions to older workers 48%
Hired retired employees as consultants or temporary workers 40%
Started flexible scheduling (e.g., telework, alternative work schedules) 37%
Created positions/redesigned positions that allow bridge employment* 30%
Offered phased/gradual retirement 30%
Provided training to upgrade skills of older workers 29%
Provided opportunities for older workers to transfer to jobs with reduced pay and responsibilities 27%
Increased training and cross-training efforts to induce older workers to stay with or join the organization 24%
Increased recruiting efforts aimed at older workers who have the skills being lost due to retiring
employees
23%
Offered wellness programs to attract and retain older workers 23%
*Opportunitiesthatallownearretireestoeaseintoretirementwhileallowingtheorganizationtoretaingoodemployees.
Note:n=99.Onlyrespondentswhoseorganizationshaveaformalstrategytorecruitand/orretainolderworkerswereaskedthisquestion.Percentages
donottotal100%duetomultipleresponseoptions.
Source:ExecutiveSummary:PreparingforanAgingWorkforce(SHRM,2014)
DATA HIGHLIGHTS:
Skills and Older Workers
■■ Do organizations capitalize on
and incorporate the experience of
older workers? More than three-
fifths (61%) of respondents said their
organization attempted to capitalize on
and incorporate the experience of older
workers to “some” or a “great extent.”
Few (15%) reported their organization
did not capitalize and incorporate the
experience of older workers at all.
■■ What are organizations doing
to prepare for potential skills
gaps as a result of the loss of
older workers? One-third (34%) of
respondents indicated their organization
had not taken any steps to prepare for
potential skills gaps as a result of the
loss of older workers. Of those who said
their organization had taken a specific
step(s) to prepare for potential skills
gaps as a result of the loss of older
workers, about half (47%) reported that
offering flexible work arrangements to
attract a broader range of applicants
(e.g., job-sharing, telework) was “very
effective.”
■■ How are organizations transferring
the knowledge of older workers?
More than half (54%) of respondents
reported their organization had
implemented training and/or cross-
training programs to transfer knowledge
from older workers to younger workers;
one-third (33%) implemented mentoring
programs, and one-quarter (26%)
implemented job-shadowing. About
one-fifth (19%) of respondents said their
organization did not use any strategies
to transfer knowledge from older
workers to younger workers.
6 Executive Summary: Preparing for an Aging Workforce
Top Five Advantages of Older Workers Compared
to Other Workers
•	 More work experience (i.e., more
knowledge and/or skills) (77%)
•	 More mature/professional (71%)
•	 Stronger work ethic (70%)
•	 Able to serve as mentors to
younger workers (63%)
•	 More reliable (59%)
Strongest Basic Skills Held by Older Workers
Compared to Other Workers
•	 Writing in English (e.g., grammar,
spelling) (45%)
•	 Reading comprehension (in English)
(20%)
•	 English language (spoken) (20%)
Strongest Applied Skills Held by Older Workers
Compared to Other Workers
•	 Professionalism/work ethic (58%)
•	 Critical thinking/problem-solving
(28%)
•	 Lifelong learning/self-direction (23%)
•	 Leadership (21%)
•	 Ethics/social responsibility (19%)
To prepare for potential skills gaps
resulting from the loss of older work-
ers, respondents said their organization
would be most likely to increase train-
ing and/or cross-training efforts (42%)
and develop succession plans (33%).
However, one-third (34%) of respon-
dents reported their organization had
not taken any steps to prepare for poten-
tial skills gaps as a result of the loss of
older workers. Of those who said their
organization had taken a specific step(s)
to prepare for potential skills gaps as a
result of the loss of older workers, about
half (47%) reported that offering flexible
work arrangements to attract a broader
range of applicants (e.g., job-sharing,
telework) was “very effective.”
More than one-half (54%) of respon-
dents said their organization had
implemented training and/or cross-
training programs to transfer knowledge
from older workers to younger workers,
one-third (33%) implemented mentoring
programs, and one-quarter (26%) imple-
mented job shadowing. However, about
one-fifth (19%) of respondents said their
organization did not use any strategies
to transfer knowledge from older work-
ers to younger workers.
Looking ahead, more organizations
may begin to try to capitalize on the
skills and experience of older workers
as demographic shifts begin to take
effect. The good news is that the vast
majority of respondents reported that
employees in their organization were
receptive to working with older work-
ers (92%), learning from older workers
(91%) and being mentored by an older
worker(s) (86%) to “some” or “a great
extent.” With virtually none (1%-2%) of
the respondents indicating that employ-
ees in their organization were “not at
all” receptive to working with, learn-
ing from and being mentored by older
workers, it seems that there is an overall
awareness of the value of learning from
older workers.
Conclusion and Implications for HR
HR professionals will be at the forefront
of their organizations’ efforts to meet
the challenges and make the most of
the opportunities accompanying an
aging workforce. They must take the
lead by helping their organizations
prepare for a more demographically
diverse workforce. The first step will be
to learn as much as they can about how
these demographic shifts are likely to
affect their industry and organization.
Simply determining what percentage
of their workforce is age 55 or older
and projecting how this proportion
may evolve in the years ahead are a few
basic data points every HR professional
should know.
Convincing workers to delay retirement
and stay in the workforce will be one
important way that HR profession-
als will help their organizations deal
with skills shortages in the years ahead.
They must also convince managers and
organizational leaders to support them
in these efforts. By demonstrating the
benefits and opportunities of an aging
workforce, HR professionals can help their
organizations build a culture that supports
and engages workers of all ages now and
in the future.
Methodology
The 2014 SHRM Survey on Older Work-
ers, conducted by the Society for Human
Resource Management (SHRM) and
sponsored by the Sloan Foundation, col-
lected responses from 1,913 HR profes-
sionals. The purpose of this research was
to investigate the current demographics of
organizations and their views on how the
demographic breakdown of their workforce
is likely to change in the future in both
their organizations and industries to deter-
mine what, if any, actions organizations are
taking to prepare for an aging workforce,
including recruiting and retention strate-
gies to specifically target older workers;
and identify the skills and experience HR
professionals most value in older workers.
An e-mail including a link to the online
survey was sent to 18,000 randomly
selected SHRM members and 2,000
randomly selected SHRM members from
government agencies. The survey was
fielded from May through July 2014.
During the data collection period, several
e-mail reminders were sent, and a small
incentive was offered to increase the
response rate. Of the 20,000 e-mail invita-
tions, 19,308 were successfully delivered,
and 1,913 HR professionals responded,
yielding a 10% response rate and a 2%
margin of error.
About SHRM
Founded in 1948, the Society for Human Resource Management
(SHRM) is the world’s largest HR membership organization
devoted to human resource management. Representing more
than 275,000 members in over 160 countries, the Society
is the leading provider of resources to serve the needs of
HR professionals and advance the professional practice of
human resource management. SHRM has more than 575
affiliated chapters within the United States and subsidiary
offices in China, India and United Arab
Emirates. Visit us at shrm.org. For more
information about the SHRM/SHRM
Foundation Older Workers initiative,
visit www.shrm.org/surveys and www.
shrmfoundation.org.
SHRM Online: shrm.org
SHRM Research: shrm.org/research
SHRM Survey Findings: shrm.org/surveys
SHRM Research on Twitter: @SHRM_Research
SHRM Research on LinkedIn: LinkedIn.com
SHRM Research on SHRM Connect:
http://community.shrm.org/home
Media Contacts
Kate Kennedy	 Vanessa Gray
E-mail: kate.kennedy@shrm.org	 E-mail: vanessa.gray@shrm.org
Phone: + 1.703.535.6260	 Phone: + 1.703.535.6072
Disclaimer
This executive summary is published by the Society for Human Resource Management (SHRM). All content is for informational purposes
only and is not to be construed as a guaranteed outcome. The Society for Human Resource Management cannot accept responsibility for
any errors or omissions or any liability resulting from the use or misuse of any such information.
© December 2014 Society for Human Resource Management. All rights reserved.
This publication may not be reproduced, stored in a retrieval system or transmitted in whole or in part, in any form or by any means,
electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the Society for Human Resource
Management.
USA
SHRM Headquarters
Alexandria, VA 22314
Phone: +1.800.283.7476
E-mail: SHRM@shrm.org
China
Gateway Plaza,
Chaoyang District
Beijing, 100027
Phone: +86.10.59231033
E-mail: SHRMChina@shrm.org
India
Gurgaon, Sector 26
Haryana 122002
Phone: +91.12.44200243
E-mail: SHRMIndia@shrm.org
United Arab Emirates
Dubai Knowledge Village
Dubai, UAE
Phone: +971.050.104.6330
E-mail: SHRM.MEA@shrm.org
7 Executive Summary: Total Financial Impact of Employee Absences in the U.S.
14-0765
PROJECT TEAM
Project Leaders
Jen Schramm, M. Phil., GPHR,
manager, SHRM Research
Karen Wessels, researcher,
SHRM Research
Project Contributors
Evren Esen, director, Survey
Programs, SHRM Research
Joseph Coombs, senior
specialist, SHRM Research

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SHRM Survey Finds Many Orgs Unprepared for Aging Workforce

  • 1. Funded by About This Research SHRM and the SHRM Foundation have launched a national initiative to highlight the value of older workers and to iden- tify—through original research—best prac- tices for employing an aging workforce. This three-year initiative is generously underwritten by a grant from the Alfred P. Sloan Foundation. The purpose of this research is to: ■■ Investigate the current demographics of organizations and their views on how the demographic breakdown of their workforces is likely to change in the future in both their organizations and industries. ■■ Determine what, if any, actions organizations are taking to prepare for an aging workforce, including recruiting and retention strategies to specifically target older workers. ■■ Identify the skills and experience HR professionals most value in older workers. As in many developed nations around the world, the United States has an aging population and an aging workforce. The U.S. Bureau of Labor Statistics forecasts that by 2016 one-third of the U.S. labor force will be in the 50-plus age category, compared with 27% in 2007. Now that the large Baby Boom generation has reached retirement age, organizations are faced with the prospect of losing many workers with key talents, experience and skills. The percentage of retired Baby Boomers has nearly doubled since 2010 when the U.S. Census Bureau found that 10% of Baby Boomers were retired. The dual challenges of dealing with skills shortages as many older workers retire and of building a more age-diverse workforce are therefore front and center in the minds of both policy- makers and business leaders. As part of the SHRM and the SHRM Foundation three-year initiative supported by a grant from the Alfred P. Sloan Foun- dation, SHRM Research conducted a survey of HR professionals to learn more about how organizations are preparing for an aging workforce, including the current demographics of organizations and the respondents’ views on how the demo- graphic breakdown of their workforce is likely to change in the future in both their organizations and industries. The survey was organized into three parts: ■■ The state of older workers in U.S. organizations. ■■ Recruiting and retaining older workers. ■■ Basic and applied skills of older workers. DEFINITION For the purpose of this survey, “older workers” were defined as employees 55 years of age or older. Executive Summary Preparing for an Aging Workforce DATA HIGHLIGHTS: State of Older Workers in the Workplace ■■ Are organizations preparing for an aging workforce? More than one-third of respondents (36%) indicated their organization was preparing for the projected increase in the proportion of older workers in the labor force by “beginning to examine internal policies and management practices to address this change;” one-fifth (20%) reported their organization had examined their workforce and determined that no changes in their policies and practices were necessary. Another one-fifth (19%) of respondents said their organization was just becoming aware of the potential change in the projected increase in the ratio of older workers in the labor force. ■■ DoHRprofessionalsseetheaging workforceasapotentialproblem? Few HR professionals believe the impact of the potential loss of talent due to retirement of workers is considered a crisis (3%-4% in the next five years) or even a problem (18%-24% in the next five years) in their industry. ■■ Areorganizationsmakinganychanges inresponsetoanagingworkforce? One-third or less of respondents indicated the increasing age of their organization’s workforce had prompted changes in general management policy/practices (28%), reten- tion practices (33%), and recruiting practices (35%) to “some” or “a great extent.”
  • 2. The Aging Workforce and the State of Older Workers in U.S. Organizations The first part of this research aims to uncover the proportion of older workers in different industries, how aware orga- nizations are of the impending demo- graphic shift toward an older workforce and what, if any, actions organizations are taking to prepare for this shift. The findings show that accommodation and food services, retail trade, wholesale trade, and transportation and warehous- ing employ significantly fewer older work- ers than the other industries (see Figure 1). HR professionals in industries with higher numbers of older workers, such as the government sector, will be among the first to deal with the challenges associ- ated with an aging workforce, and these industries will be a bellwether that may demonstrate what other industries may eventually experience. More than one-third of respondents (36%) indicated their organization was preparing for the projected increase in the proportion of older workers in the labor force by “beginning to examine internal policies and management practices to address this change.” However, one-fifth (20%) of respondents reported their orga- nization had examined their workforce and determined that no changes in their policies and practices were necessary; another one-fifth (19%) indicated their organization was just becoming aware of this potential change in the ratio of older workers (see Figure 2). The survey also found that less than one-third of HR professionals believed the potential loss of talent due to retire- ment of workers was considered a crisis or even a problem in their industry. The apparent lack of concern about this loss of talent is somewhat surprising given the newly revived debate on skills short- ages and rising recruiting difficulty. This may be due in part to missing information around precisely when and how these changes will take effect within a given industry or organization; 2 Executive Summary: Preparing for an Aging Workforce Figure 1. Percentage of Older Workers, by Industry Accomondation and food services, retail trade, wholesale trade, and transportation and warehousing Construction and repair and maintenance Educational services Finance, insurance, and real estate Government agencies Health care and social assistance Information and professional, scientific and technical services Manufacturing Mining, quarrying, and oil and gas extraction Religious, grantmaking, civic, professional and similar organizations Utilities Other 23.1% 24.2% 24.4% 28.7% 29.3% 29.9% 26.0% 26.6% 27.0% 29.5% 29.1% 22.9% Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014) Figure 2. How Organizations Are Preparing for the Projected Increase in the Proportion of Older Workers in the Labor Force* Beginning to examine internal policies and management practices to address this change Have examined our workforce and determined that no changes in our policies and practices are necessary Just becoming aware of this potential change Not aware of this potential change Have implemented specific policies and management practices Have proposed specific policy and management practice changes Have agreed on a plan to change policies and management practices 36% 20% 19% 13% 6% 5% 2% Note: n = 1,715. Percentages may not total 100% due to rounding. * Question as asked in the survey: “According to the Bureau of Labor Statistics, workers 55 years of age and over are projected to make up approximately 26% of the labor force by the year 2022, compared to 21% in 2012 and 14% in 2002. As the proportion of older workers increases, the potential impact resulting from the loss of their knowledge and experience may become more substantial. Which of the following best describes your organization’s preparation for this change?” Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014) Accommodation and food services, retail trade, wholesale trade, and transportation and warehousing employ significantly fewer older workers than the other industries.
  • 3. Executive Summary: Preparing for an Aging Workforce 3 Recruiting and Retaining Older Workers With many organizations appearing to be relatively unconcerned about the impact of demographic changes on their workforce and the potential impend- ing loss of a large number of their best workers, it is not surprising that most are not making changes to their management or recruiting and retention practices in preparation for these shifts. Less than one-third of respondents said that the increasing age of their organization’s workforce had prompted changes in general management policy/ practices (28%), retention practices (33%) and recruiting practices (35%) to “some” or “a great extent” (see Figure 4). Meanwhile, over one-half of orga- nizations (54%) reported they did not actively recruit older workers. Among respondents who said that the increasing age of their organization’s workforce had prompted changes in their recruiting practices, the most com- monly reported recruiting method to directly target older workers was through employee referrals (33%); one-quarter (24%) indicated they relied on networking (see Figure 5). When it comes to the difficulty orga- nizations experience in recruiting older workers, less than one-quarter of organi- zations said they found it either “easy” or “extremely easy” to recruit exempt and nonexempt older workers (21% and 24%, respectively); about two-fifths of organiza- tions reported it was “easy” or “extremely easy” to retain exempt and nonexempt older workers (45% and 42%, respectively), as shown in Figures 6 and 7. Figure 3. The Percentage of Organizations That Have Conducted a Strategic Workforce Planning* Assessment to… Analyze the impact of workers age 55+ leaving your organization Identify your future workforce needs 1–2 years 3–5 years 6–10 years Identify your potential skills gaps 35% 31% 17% 58% 44% 21% 52% 39% 20% *Strategic workforce planning is a process used to ensure an organization takes into account the future loss of knowledge through employee resignations/ retirements and the projected knowledge/personnel resources required to achieve the organization’s goals. Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014) Figure 4. Extent Increasing Age of Organization’s Workforce Has Prompted Changes in… Generalmanagementpolicy/practices Retention practices Recruiting practices 4% 7% 8% 27% 24% 41% 24% 26% 26% 42% 31% 41% To a great extent To some extent To a small extent Not at all Note: n = 1,832-1,843. Respondents who indicated “Not applicable” were not included in the analysis. Percentages may not total 100% due to rounding. Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014) DATA HIGHLIGHTS: Recruitment and Retention of Older Workers ■■ Doorganizationstrackimpending retirements? One-half (50%) of HR profession- als said their organization tracked the percent- age of employees eligible to retire in the next 1 to 2 years and fewer beyond that time frame. ■■ Doorganizationshaveformalstrategies for attracting and retaining older workers? Very few organizations reported having a formal strategy for retaining (4%) and/or recruiting (3%) older workers. ■■ What are the barriers to retaining older workers? Flexibility in work location (47%), career flexibility (45%), work hour flexibility (44%) and work schedule flexibility (43%) were cited most frequently as factors that contribute to difficulties in retaining older workers. More than one-third of respondents who indicated it was “difficult” or “very difficult” for their organization to retain older workers compared with other workers cited their organization’s inability to offer flexibility in type of employment (e.g., consultant work, temporary work, etc.) (38%) and/or benefits attractive to older workers (e.g., different health care benefits, wellness plans) (34%) as top challenges. just one-half of HR professionals indicated their organization tracked the percentage of employees eligible to retire in the next 1 to 2 years, and even fewer forecast workforce demographics beyond that time frame. As shown in Figure 3, about one-fifth or fewer of organizations have conducted workforce assessments around the loss of workers age 55 and older, identifying future workforce needs and potential skills gaps in the six- years-and-beyond time frame. Overall, the findings suggest that many organizations may not be fully aware of the various ways these demographic shifts will influence their organizations.
  • 4. Some organizations do find it difficult to recruit and retain workers in this demographic. Among the respondents who indicated it was “difficult” or “very difficult” for their organization to retain older workers compared to other work- ers, a lack of flexibility was a key issue that acted as a barrier (see Table 1). When asked about the type of older workers (i.e., job classification) they found difficult to recruit, about one- quarter of organizations reported it was difficult/extremely difficult to recruit older workers qualified for skilled labor (25%), executive (25%), salaried individ- ual contributor/professional (22%) and management (22%) positions compared to other workers; less than one-fifth indicated the same for labor, low-skilled positions (17%) and few for administra- tive/secretarial positions (7%). Regard- less of the type of position, a lack of or few applications from older workers who are qualified compared to other workers was the most cited difficulty in filling positions with older workers (46%-60%). One trend that has been discussed in relation to the Baby Boom generation is the desire to continue to work beyond retirement age, possibly in a completely new field or career. Thus, the survey asked HR professionals if their organiza- tion employed workers who had retired from other organizations or careers. The survey findings suggest that this may be relatively common as two-thirds (66%) of respondents indicated their organiza- tion employs older workers who retired from other organizations or careers before joining their organization. How- ever, these types of workers do not make up the majority of older workers in any given organization. An overwhelming majority of HR professionals (90%) said only 1% to 20% of their organization’s older workers had previously retired from other organizations or careers. Of respondents who reported their organization employed older workers who retired from other organizations or careers before joining their organiza- tion, almost half (46%) indicated that older workers in this group were mixed between full- and part-time status. The survey findings also support the claim that finances are an important reason that post-retirement individuals return to work. Almost three-quarters (72%) of HR professionals reported that for employees who joined their organization after retiring money was a factor. More than half (58%) reported enjoyment/occupying time was a factor, and about two-fifths said health care benefits (45%) and social interaction (42%) contributed to the decision to return to work. Over three-fifths (61%) of respondents indicated their organization attempted to capitalize on and incorporate the experience of older workers to “some” or “a great extent.” Although organiza- tions make efforts to capitalize on the 4 Executive Summary: Preparing for an Aging Workforce Figure 5. Recruiting Methods Used by Organizations to Directly Target Older Workers Employee referrals Networking Internet (e.g., websites geared toward older audience) Use of current older workers as recruiters Employment agencies Social media Temporary firms Executive search firms Specifyolderworkersarewelcomeandareencouragedtoapply Government-based employment programs Churches Other Recruit through local senior citizen community groups Older workers’ job fairs Retirement communities Newsletters (e.g., AARP Bulletin) We do not actively recruit older workers 33% 24% 14% 13% 13% 12% 11% 8% 7% 6% 4% 3% 2% 1% 1% 3% 54% Note: n = 1,074. Only respondents who indicated the increasing age of their organization’s workforce had prompted changes in their recruiting practices were asked this question. Percentages do not total 100% due to multiple response options. Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014) Figure 6. Difficulty Recruiting Older Workers Qualified for Positions Compared With Other Workers 17% 17% 61% 59% 21% 24% Extremely difficult/Difficult Neither easy nor difficult Easy/Extremely easy Exempt older workers Nonexempt older workers Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014) Figure 7. Difficulty Retaining Older Workers Qualified for Positions Compared With Other Workers 9% 10% 46% 48% 45% 42% Extremely difficult/Difficult Neither easy nor difficult Easy/Extremely easy Exempt older workers (n = 1,826) Nonexempt older workers (n = 1,804) Note: Percentages may not total 100% due to rounding. Source: Executive Summary: Preparing for an Aging Workforce (SHRM, 2014)
  • 5. experience of older workers, very few have a formal strategy for retaining (4%) and/ or recruiting (3%) this group. Of respon- dents who said their organization had a formal strategy to recruit and/or retain older workers, many used flexible working options to attract and retain this segment of the workforce (see Table 2). Of respondents who indicated their organization had taken a specific step(s) to recruit and/or retain older workers, the majority reported that hiring retired employees as consultants or temporary workers (67%), offering reduced hours or part-time positions to older workers (57%) and starting flexible scheduling (63%) were “very effective” in recruiting and/ or retaining older workers. However, less than one-quarter said that more than half of their eligible employees used reduced hours or part-time positions (21%), flex- ible scheduling (24%) or phased/gradual retirement (16%) programs for older workers. Instead, about half reported just 1% to 25% of their eligible employees used reduced hours or part-time posi- tions (45%) or flexible scheduling (46%) programs for older workers; more than three-fifths (63%) indicated the same for phased/gradual retirement programs. Skills and Older Workers The final section of the survey evaluated the skills of older workers. Listed below are the overall advantages of older workers fol- lowed by the basic and applied skills orga- nizations indicated they most value in older workers compared with other workers: Executive Summary: Preparing for an Aging Workforce 5 Table 1. Factors That Contribute to Difficulties in Retaining Older Workers My organization is unable to offer… Flexibility in work location (e.g., working from home, satellite offices) 47% Career flexibility (e.g., reduced responsibilities, job change/occupation shift) 45% Work hour flexibility (e.g., reduced hours, job-sharing, phased retirement, part-year employment) 44% Work schedule flexibility (e.g., changing starting and ending times periodically, compressed workweek ) 43% Flexibility in type of employment (e.g., consultant work, temporary work) 38% Benefits attractive to older workers (e.g., different health care benefits, wellness plans) 34% Other 15% Note:n=242.Onlyrespondentswhoindicateditis“Difficult”or“Verydifficult”fortheirorganizationtoretainolderworkerscomparedtootherworkers wereaskedthisquestion.Percentagesdonottotal100%duetomultipleresponseoptions. Source:ExecutiveSummary:PreparingforanAgingWorkforce(SHRM,2014) Table 2. Steps Taken to Recruit and/or Retain Older Workers Offered reduced hours or part-time positions to older workers 48% Hired retired employees as consultants or temporary workers 40% Started flexible scheduling (e.g., telework, alternative work schedules) 37% Created positions/redesigned positions that allow bridge employment* 30% Offered phased/gradual retirement 30% Provided training to upgrade skills of older workers 29% Provided opportunities for older workers to transfer to jobs with reduced pay and responsibilities 27% Increased training and cross-training efforts to induce older workers to stay with or join the organization 24% Increased recruiting efforts aimed at older workers who have the skills being lost due to retiring employees 23% Offered wellness programs to attract and retain older workers 23% *Opportunitiesthatallownearretireestoeaseintoretirementwhileallowingtheorganizationtoretaingoodemployees. Note:n=99.Onlyrespondentswhoseorganizationshaveaformalstrategytorecruitand/orretainolderworkerswereaskedthisquestion.Percentages donottotal100%duetomultipleresponseoptions. Source:ExecutiveSummary:PreparingforanAgingWorkforce(SHRM,2014) DATA HIGHLIGHTS: Skills and Older Workers ■■ Do organizations capitalize on and incorporate the experience of older workers? More than three- fifths (61%) of respondents said their organization attempted to capitalize on and incorporate the experience of older workers to “some” or a “great extent.” Few (15%) reported their organization did not capitalize and incorporate the experience of older workers at all. ■■ What are organizations doing to prepare for potential skills gaps as a result of the loss of older workers? One-third (34%) of respondents indicated their organization had not taken any steps to prepare for potential skills gaps as a result of the loss of older workers. Of those who said their organization had taken a specific step(s) to prepare for potential skills gaps as a result of the loss of older workers, about half (47%) reported that offering flexible work arrangements to attract a broader range of applicants (e.g., job-sharing, telework) was “very effective.” ■■ How are organizations transferring the knowledge of older workers? More than half (54%) of respondents reported their organization had implemented training and/or cross- training programs to transfer knowledge from older workers to younger workers; one-third (33%) implemented mentoring programs, and one-quarter (26%) implemented job-shadowing. About one-fifth (19%) of respondents said their organization did not use any strategies to transfer knowledge from older workers to younger workers.
  • 6. 6 Executive Summary: Preparing for an Aging Workforce Top Five Advantages of Older Workers Compared to Other Workers • More work experience (i.e., more knowledge and/or skills) (77%) • More mature/professional (71%) • Stronger work ethic (70%) • Able to serve as mentors to younger workers (63%) • More reliable (59%) Strongest Basic Skills Held by Older Workers Compared to Other Workers • Writing in English (e.g., grammar, spelling) (45%) • Reading comprehension (in English) (20%) • English language (spoken) (20%) Strongest Applied Skills Held by Older Workers Compared to Other Workers • Professionalism/work ethic (58%) • Critical thinking/problem-solving (28%) • Lifelong learning/self-direction (23%) • Leadership (21%) • Ethics/social responsibility (19%) To prepare for potential skills gaps resulting from the loss of older work- ers, respondents said their organization would be most likely to increase train- ing and/or cross-training efforts (42%) and develop succession plans (33%). However, one-third (34%) of respon- dents reported their organization had not taken any steps to prepare for poten- tial skills gaps as a result of the loss of older workers. Of those who said their organization had taken a specific step(s) to prepare for potential skills gaps as a result of the loss of older workers, about half (47%) reported that offering flexible work arrangements to attract a broader range of applicants (e.g., job-sharing, telework) was “very effective.” More than one-half (54%) of respon- dents said their organization had implemented training and/or cross- training programs to transfer knowledge from older workers to younger workers, one-third (33%) implemented mentoring programs, and one-quarter (26%) imple- mented job shadowing. However, about one-fifth (19%) of respondents said their organization did not use any strategies to transfer knowledge from older work- ers to younger workers. Looking ahead, more organizations may begin to try to capitalize on the skills and experience of older workers as demographic shifts begin to take effect. The good news is that the vast majority of respondents reported that employees in their organization were receptive to working with older work- ers (92%), learning from older workers (91%) and being mentored by an older worker(s) (86%) to “some” or “a great extent.” With virtually none (1%-2%) of the respondents indicating that employ- ees in their organization were “not at all” receptive to working with, learn- ing from and being mentored by older workers, it seems that there is an overall awareness of the value of learning from older workers. Conclusion and Implications for HR HR professionals will be at the forefront of their organizations’ efforts to meet the challenges and make the most of the opportunities accompanying an aging workforce. They must take the lead by helping their organizations prepare for a more demographically diverse workforce. The first step will be to learn as much as they can about how these demographic shifts are likely to affect their industry and organization. Simply determining what percentage of their workforce is age 55 or older and projecting how this proportion may evolve in the years ahead are a few basic data points every HR professional should know. Convincing workers to delay retirement and stay in the workforce will be one important way that HR profession- als will help their organizations deal with skills shortages in the years ahead. They must also convince managers and organizational leaders to support them in these efforts. By demonstrating the benefits and opportunities of an aging workforce, HR professionals can help their organizations build a culture that supports and engages workers of all ages now and in the future. Methodology The 2014 SHRM Survey on Older Work- ers, conducted by the Society for Human Resource Management (SHRM) and sponsored by the Sloan Foundation, col- lected responses from 1,913 HR profes- sionals. The purpose of this research was to investigate the current demographics of organizations and their views on how the demographic breakdown of their workforce is likely to change in the future in both their organizations and industries to deter- mine what, if any, actions organizations are taking to prepare for an aging workforce, including recruiting and retention strate- gies to specifically target older workers; and identify the skills and experience HR professionals most value in older workers. An e-mail including a link to the online survey was sent to 18,000 randomly selected SHRM members and 2,000 randomly selected SHRM members from government agencies. The survey was fielded from May through July 2014. During the data collection period, several e-mail reminders were sent, and a small incentive was offered to increase the response rate. Of the 20,000 e-mail invita- tions, 19,308 were successfully delivered, and 1,913 HR professionals responded, yielding a 10% response rate and a 2% margin of error.
  • 7. About SHRM Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org. For more information about the SHRM/SHRM Foundation Older Workers initiative, visit www.shrm.org/surveys and www. shrmfoundation.org. SHRM Online: shrm.org SHRM Research: shrm.org/research SHRM Survey Findings: shrm.org/surveys SHRM Research on Twitter: @SHRM_Research SHRM Research on LinkedIn: LinkedIn.com SHRM Research on SHRM Connect: http://community.shrm.org/home Media Contacts Kate Kennedy Vanessa Gray E-mail: kate.kennedy@shrm.org E-mail: vanessa.gray@shrm.org Phone: + 1.703.535.6260 Phone: + 1.703.535.6072 Disclaimer This executive summary is published by the Society for Human Resource Management (SHRM). All content is for informational purposes only and is not to be construed as a guaranteed outcome. The Society for Human Resource Management cannot accept responsibility for any errors or omissions or any liability resulting from the use or misuse of any such information. © December 2014 Society for Human Resource Management. All rights reserved. This publication may not be reproduced, stored in a retrieval system or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the Society for Human Resource Management. USA SHRM Headquarters Alexandria, VA 22314 Phone: +1.800.283.7476 E-mail: SHRM@shrm.org China Gateway Plaza, Chaoyang District Beijing, 100027 Phone: +86.10.59231033 E-mail: SHRMChina@shrm.org India Gurgaon, Sector 26 Haryana 122002 Phone: +91.12.44200243 E-mail: SHRMIndia@shrm.org United Arab Emirates Dubai Knowledge Village Dubai, UAE Phone: +971.050.104.6330 E-mail: SHRM.MEA@shrm.org 7 Executive Summary: Total Financial Impact of Employee Absences in the U.S. 14-0765 PROJECT TEAM Project Leaders Jen Schramm, M. Phil., GPHR, manager, SHRM Research Karen Wessels, researcher, SHRM Research Project Contributors Evren Esen, director, Survey Programs, SHRM Research Joseph Coombs, senior specialist, SHRM Research