the aging workforce -state of older workers in u.s. organizations

SHRM Survey Findings: The Aging Workforce—

State of Older Workers in U.S. Organizations

Funded by the Alfred P. Sloan Foundation

January 12, 2015

The Aging Workforce—State of Older Workers in U.S. Organizations ©SHRM 2014 2

Introduction and Definition

Introduction

SHRM and the SHRM Foundation have launched a national initiative highlighting the value of older

workers and identifying—through original research—the best practices 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.

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Introduction and Definition (continued)

The following topics are included in the three-part series titled 2014 Older Workers Survey:

Part 1: State of Older Workers in U.S. Organizations

Part 2: Recruitment and Retention

Part 3: Basic and Applied Skills

Definition

For the purpose of this survey, “older workers” were defined as employees age 55 or older.

The Aging Workforce—State of Older Workers in U.S. Organizations ©SHRM 2014

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Key Findings

• Age workers are defined as “older workers”: One-third (32%) of HR professionals reported

that their organizations begin to consider employees to be older workers when they are between

ages 60 and 64, another 17% between ages 65 and 69, and 7% when the employees are age 70

or older.

» In general, HR professionals indicated employees considered employees to be older

workers when they are slightly younger. About one-quarter of HR professionals reported

that employees begin to consider employees to be older workers when they are between

ages 50 and 54 (28%), between ages 55 and 59 (28%) or between ages 60 and 64 (24%).

Less than 10% of employees did not consider employees to be older workers until they are

age 65 or older.

• How organizations are preparing for the projected increase in the proportion of older

workers in the labor force: Over one-third of responding organizations (36%) indicated they

were 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%) indicated their organization had examined their workforce and determined that no

changes in their policies and practices are necessary.


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Key Findings (continued)

• Overall impact of the potential loss of talent as a result of older workers retiring or leaving

their organizations for other reasons: About one-half of HR professionals did not think the

potential loss of talent as older workers retire or leave over the next 1-2 years would have an

impact on their industry and organization (46% and 53%, respectively). As HR professionals

considered the long-term impact of the potential loss of talent, higher percentages indicated they

think the loss of talent will be a “problem” or a “crisis.” About one-third think it will be a

problem/crisis for their industry in the next 6-10 years and 11-20 years (36% versus 39%,

respectively); the same was true for the impact on their organization (35% and 39%,

respectively).

• Tracking employees eligible for retirement: About one-half of responding organizations

reported they track the percentage of workers in their organization eligible to retire in the next 1-2

years (50%) and 3-5 years (45%).

Of responding organizations, 10% of their employees will be eligible for retirement in the

next 1-2 years; another 14% will be eligible in the next 3-5 years.


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Key Findings (continued)

• Percentage of organizations that have conducted a strategic workforce planning assessment:

More than one-half of responding organizations indicated they had identified their future workforce

needs (58%) and their potential skills gaps (52%) in the next 1-2 years; one-third (35%) had

analyzed the impact of workers age 55 and older leaving their organization in the next 1-2 years.

As responding organizations considered strategic workforce planning further into the future,

they were less inclined to have taken action; about one-fifth had analyzed the impact of

workers age 55 and older leaving their organization (17%), identified their future workforce

needs (21%) or identified their potential skills gaps (20%) in the next 6-10 years.


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Implications for HR

• HR professionals must lead their organizations in preparing for a more demographically diverse

workforce due to an increase in the proportion of older workers. To do this, however, they must first

educate themselves about the change and consider how it may affect their organizations. A first step is

determining what percentage of their workforces is age 55 or older and projecting how this proportion

may evolve in the years ahead.

• Each industry and organization will be affected by an aging population in different ways. HR

professionals must understand their own unique industry and organizational demographics to create

viable strategies for successfully addressing these changes.

• Convincing workers to delay retirement and stay in the workforce will be an important HR responsibility

in the years ahead, but preparing for these changes could be challenging if managers and

organizational leaders do not lend their support in these efforts. Thus, part of HR’s role in readying their

organizations for an aging workforce will be educating leaders and managers on the benefits and

opportunities of an aging workforce.

• A minority of HR professionals say their organizations have analyzed the impact of workers age 55 and

older leaving their organization, identified their future workforce needs or identified their potential skills

gaps in the next 6-10 years. Taking this step is encouraged because it will help position organizations to

take advantage of an aging workforce as a strategic opportunity.


Age at which most employees begin

to consider an employee to be an

older worker

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Age Workers Are Defined as “Older Workers”

6%

4%

14%

21%

32%

17%

7%

40 - 44

45 - 49

50 - 54

55 - 59

60 - 64

65 - 69

70 or over

Age at which organizations begin to

consider an employee to be an older

worker

Note: 2014 n = 1,913. Percentages may not equal100% due to

rounding.

Note: 2014 n = 1,647. Respondents who indicated “Don’t know”

were excluded from this analysis. Percentages may not

equal100% due to rounding.

4%

9%

28%

28%

24%

6%

1%

40 - 44

45 - 49

50 - 54

55 - 59

60 - 64

65 - 69

70 or over


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How Organizations Are Preparing for the Projected Increase

in the Proportion of Older Workers in the Labor Force1

36%

20%

19%

13%

6%

5%

2%

Beginning to examine internal policies andmanagement practices to address this change

Have examined our workforce and determined that nochanges 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 managementpractices

Have proposed specific policy and managementpractice changes

Have agreed on a plan to change policies andmanagement practices

Note: n = 1,715. Percentages may not equal100% due to rounding.1 Survey question: “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?”


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Note: Percentages may not equal100% due to rounding.

3%

4%

8%

13%

18%

24%

28%

26%

33%

41%

41%

34%

46%

32%

23%

26%

1-2 years (n = 1,592)

3-5 years (n = 1,612)

6-10 years (n =…

11-20 years (n =…

It is a crisis It is a problem It is a potential problem It is not a problem

4%

3%

7%

12%

17%

24%

28%

27%

27%

38%

40%

34%

53%

35%

24%

28%

1-2 years (n = 1,785)

3-5 years (n = 1,800)

6-10 years (n = 1,687)

11-20 years (n = 1,499)

It is a crisis It is a problem It is a potential problem It is not a problem

Impact on Industry

Impact on Organization

Overall Impact of the Potential Loss of Talent as a Result of Older Workers

Retiring or Leaving Their Organizations for Other Reasons


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Tracking Employees Eligible for Retirement

Does your organization track the

percentage of workers in your

organization eligible to retire in the

next . . .

Approximately what percentage of

your workforce will be eligible for

retirement in the next . . .

Note: n = 1,815-1,872. Percentages do not equal 100% due to

multiple response options.

50%

45%

25%

17%

1-2 years (n = 1,872)

3-5 years (n = 1,868)

6-10 years (n = 1,830)

11-15 years (n = 1,815)

Note: n = 270-855. Percentages do not equal100% due to multiple

response options.

10%

14%

20%

23%

1-2 years (n = 855)

3-5 years (n = 768)

6-10 years (n = 416)

11-15 years (n =270)


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Percentage of Organizations That Have Conducted a

Strategic Workforce Planning1 Assessment to . . .

1Strategic 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.

n = 1,551-1,651 n = 1,542-1,691 n = 1,529-1,666

35%

58%52%

31%

44%39%

17%21% 20%

Analyze the impact ofworkers age 55+ leaving

your organization

Identify your futureworkforce needs

Identify your potentialskills gaps

1-2 years 3-5 years 6-10 years


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Demographics


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Demographics: Organization Industry


Percentage

Professional, scientific, technical and information services 21%

Manufacturing 20%

Government agencies 17%

Health care and social assistance 10%

Retail and wholesale trade, and accommodation and food services 10%

Educational services 8%

Real estate and leasing, and finance and insurance 8%

Transportation and warehousing 6%

Construction 5%

Administrative and support, and waste management and remediation services 4%

Utilities 4%

Note: n = 1,784. Percentages do not equal 100% due to multiple response options.

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Demographics: Organization Industry (continued)


Percentage

Arts, entertainment and recreation 3%

Mining, quarrying, and oil and gas extraction 3%

Religious, grant-making, civic, professional and similar organizations 3%

Repair and maintenance 3%

Agriculture, forestry, fishing and hunting 2%

Personal and laundry services 1%

Other industry 10%

Note: n = 1,784. Percentages do not equal 100% due to multiple response options.

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Demographics: Organization Sector

Note: n = 1,696

15%

49%

17%

17%

2%

Publicly owned for-profit

Privately owned for-profit

Nonprofit organization

Government agency

Other


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Demographics: Organization Staff Size

Note: n = 1,011

16%

35%

24%

20%

6%

1 to 99 employees

100 to 499 employees

500 to 2,499 employees

2,500 to 24,999 employees

25,000 or more employees


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n = 1,717

U.S.-based operations only 77%

Multinational operations 23%

Single-unit organization: An organization in

which the location and the organization are

one and the same.

39%

Multi-unit organization: An organization that

has more than one location.61%

Is your organization a single-unit organization or a

multi-unit organization?

Does your organization have U.S.-based

operations (business units) only, or does it

operate multinationally?

n = 1,722

Demographics: Other

Multi-unit headquarters determines HR

policies and practices53%

Each work location determines HR policies

and practices4%

A combination of both the work location and

the multi-unit headquarters determines HR

policies and practices

43%

For multi-unit organizations, are HR policies and practices

determined by the multi-unit headquarters, by each work

location or by both?

n = 1,102

Corporate (companywide) 69%

Business unit/division 15%

Facility/location 16%

n = 1,101

What is the HR department/function for

which you responded throughout this

survey?


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SHRM Survey Findings: 2014 Older Workers Survey—

State of Older Workers in U.S. Organizations

• Response rate = 9.9%

• 1,913 HR professionals from a randomly selected sample of SHRM’s membership participated

in this survey

• Margin of error +/-2%

• Survey fielded May-July, 2014

Survey Methodology

Funded by the Alfred P. Sloan Foundation


For more survey/poll findings, visit shrm.org/surveys

For more information about SHRM’s Customized Research Services, visit

shrm.org/customizedresearch

Follow us on Twitter @SHRM_Research

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About SHRM Research

Project lead:

Karen Wessels, researcher, SHRM Research

Project contributors:

Evren Esen, SPHR, director, Survey Programs, SHRM Research

Jennifer Schramm, GPHR, manager, Workforce Trends and Forecasting, SHRM Research

Yan Dong, intern, SHRM Research

Copy editor:

Katya Scanlan, SHRM Knowledge Center


http://www.shrm.org/surveys

http://www.shrm.org/customizedresearch

http://twitter.com/SHRM_Research

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.

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About SHRM


http://www.shrm.org/

The Alfred P. Sloan Foundation believes that a carefully reasoned and systematic

understanding of the forces of nature and society, when applied inventively and wisely,

can lead to a better world for all. The Foundation makes grants to support original

research and broad-based education related to science, technology, and economic

performance; and to improve the quality of American life. Though founded in 1934 by

Alfred P. Sloan Jr., then-President and CEO of General Motors, the Foundation is an

independent entity and has no formal relationship with the General Motors Corporation.

The Foundation is unique in its focus on science, technology, and economic

institutions. It believes the scholars and practitioners who work in these fields are chief

drivers of the nation’s health and prosperity. In each grant program, the Foundation

seeks proposals for original projects led by outstanding individuals or teams.

http://www.sloan.org/

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About the Sloan Foundation


http://www.sloan.org/

the aging workforce -state of older workers in u.s. organizations

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