6 Tips for Leveraging Your Aging Workforce

Much has been written recently about the aging workforce. Consider the Stanford Center on Longevity, which writes that, in recent years, the American labor force has aged dramatically. Some major aerospace companies are experiencing the phenomenon that 50% of their engineers are eligible for retirement. In the oil and gas industry, there is a crisis of talent that is referred to as “The Great Crew Change.”

“Think about ‘elder proofing’ your workplace.”

CEOs must be prepared for the surprises that come with an aging workforce. Here are 6 tips to help employers ensure they will always have enough skilled workers to fill every position.

1. Get to know your workforce. Most HR systems keep very little data and reports are stock. Do you know what the average age of your critical skilled workers is? Have you projected what it will be in five years? Do you know what the supply and demand is for those workers? Is your HR Department planning far enough ahead? In a recent speech I co-presented with Jason Averbook, a human capital expert, he successfully proved LinkedIn knows more about a company’s workforce than the companies for whom they work. Your ERP system may not have this capability, or you may have multiple systems spanning across the U.S. or globally. What you are going to need is a new breed of HR software known as “HR Analytics,” a tool for the big data era. These tools can access, slice and dice your workforce and even run “what if” scenarios.

At PDS Tech, we have used Equifax Workforce Solutions to look at compliance scenarios for the Affordable Care Act, analyze the difference in the quality of an employee depending upon whether they were a referred candidate or not, and looked at demographics data of various skill sets over time. Identify the key skill sets that are essential to your future competitiveness and study their aging and movement within and without your organization.

2. Invest in ergonomics. By 2019, it is projected that people over 50 will account for 35% of the workforce. Think about “elder proofing” your workplace. Falling at 50+ is very different than falling at 20, and the consequences of claims are much higher. Bill Spiers, a risk control expert at The Lockton Companies, in referring to the effect of baby boomers on workers compensation, calls it a “safety tsunami.” The cost of injuries measured by analyzing “loss runs” shows fewer claims for age groups over 40, but much higher average cost-per-claim.

In reviewing the actual data for a mid- to large-sized food company with 750 claims per year and losses of $6.5 million, Spiers found the average cost-per-claim for an employee under 20 was $1,777, while for a worker aged 50-59, it was nearly 10 times that amount or $17,017. Meanwhile, investing in ergonomics can actually boost productivity.

“To boost productivity, let your aging workforce volunteer to be part of a task force to make the workplace more conducive and safe for them.”

3. Set up a task force and recruit employees. As an employer, you will soon find yourself, through workers compensation insurance, replacing hips and knees. Moreover, to the extent your hands-on workforce ages, productivity may suffer as physical attributes decline with age. To boost productivity, let your aging workforce volunteer to be part of a task force to make the workplace more conducive and safe for them. Obviously, you need to take volunteers and not just assume a “seasoned worker” is going to be interested in such a task force. The Age Discrimination Act, in some ways unfortunately, does not allow you to target these individuals, even if they want to be targeted.

4. Learn from our European counterparts. The aging issue is not new to the rest of the world. If anything, we are new to the game. Auto manufacturers Audi and BMW have learned to design the workplace around the aging workforce and are being rewarded with productivity gains. BMW analyzed their workforce in 2007 and found that the average age of their workers would go from 41-46 by 2017. They actually set up an experimental assembly line in Dingolfing, Germany which had features such as “hoists to spare aging backs, adjustable- height working benches, and wooden floors instead of rubber to help hips swivel during repetitive tasks.” What was the result? The older workers outperformed the younger workers.

At Audi, the company designed production around disability challenges creating flexible working practices. They stopped measuring individual accomplishment and measured contribution across the age bands of the workforce. The result: A 40% increase in productivity.

5. Offer flexible retirement alternatives and blend older and younger workers. Plan out “climb down the ladder” scenarios where folks who still have important contributions to make can continue to make them on their terms and in a way that educates the next generation. Successful companies in the era of longevity will be those that structure alternative retirement strategies, especially in their critical skill sets.

Why is this so important? A client recently asked me, “How come all of my job applicants are either really young or really old?” That is because our current demographics look like a barbell. Our challenge is not just that we are aging; it is that the demographic behind us is very small relative to the boomers. So it is not just accommodating the boomers that is important—we must accelerate the learning of the millennials.

“It’s not just accommodating the boomers that is important—we must accelerate the learning of the millennials.”

6. Invest in wellness plans and tie employee premiums to its success. Since health claims rise with age, you will be carrying a larger financial burden of health care costs as your workforce ages. It is critically important to place some of the burden of this cost on the employees themselves. You can vary their premiums dramatically by employing wellness plans and basing premiums upon wellness plan participation and performance. You can’t afford not to do this.

Missing the early warning signs on the aging of your workforce can cause your company to fall behind the competition, or can cause customer service quality issues. On the positive front, you can boost productivity with active changes that address the challenges that come with age. Our European counterparts are ahead of us in this regard. There is no way to instantly create an engineer with 30 years of experience, but there are ways to keep them longer and accelerate the learning of their replacements.

Make your environment a safer place to work, take personal and disability needs into account in your manufacturing and production processes, and structure the exit of your baby boomer employees to ensure you get the best of them in contributing and mentoring roles. As you take on a greater burden in your health plans, ensure you are sharing and shifting lifestyle responsibilities to the workers—they may work for you—but it is their life, their health and their responsibility, as well.


Cash Nickerson :Cash Nickerson is President and CFO of PDS Tech, Inc., a position he has held for over 11 years. With over $400 million in annual sales, PDS is one of the largest engineering and IT staffing firm in the United States. He is the author of BOOMERangs, Engaging the Aging Workforce in America.