The Maturing Workforce

Baby boomers free up cash

Many times in this blog it appears baby boomers want more time to enjoy themselves, while not giving up work altogether.  A very interesting article from Europe tells how boomers are funding their free time.  Wealthy baby-boomers are, according to Milton Pedraza, president of the Institute of Luxury, less attached to property: they enjoy experiences. They are selling their high class goods on ebay based offshoot Portero.  How many handbags can be traded for a round trip to Australia we wonder? Check out http://www.seniorscopie.com/actu/article.asp?id=060213230302&rub=swi Chris Steel

CHICAGOLAND CONVERSATIONS...

CHICAGOLAND CONVERSATIONS...On the maturing workforce

I recently had the pleasure of moderating an extremely provocative panel discussion on the maturing workforce with about 40 of Chicago's leading minds on the subject.  Fellow panelists included representatives from civic associations, government offices, private industry and universities.  I kicked off the event by highlighting why this was an important issue for IBM and asked each of the panelists to do the same. Below you'll find a brief recap from the event.

Of note:

Pamela Tate of the council for Adult and Experiential Learning  discussed the challenges within the changing demographics, pointing out that 60 percent of the available jobs require skills that only 20 percent of the workforce currently has.  In addition, she talked about ways in which to keep the existing workforce working beyond 65.  Pam also highlighted that Baby Boomers don't want to go to senior centers for career advice, so her group has development offices to provide career advice for Baby Boomers.

Fred Hoch, of the Illinois Technology Association , talked about how the tech industry has a bright future ahead of it and needs to create an environment in which experienced workers can share their knowledge with the next generation.

Ruth Sweeter of the Illinois Institute of Technology  emphasized the need for formalized academic and business partnerships.

Jerry Roper, of the Chicagoland Chamber of Commerce   highlighted that this panel was the perfect platform to understand the issue before people tried to invent something to fix it.  He also noted how Chicago is poised to bring in new talent..."The City is alive," he said.

In addition, we had a number of the attendees provide insights  from a more global perspective.   In particular, Ed Gordon of Imperial Consulting (Ed has also written books on this subject), drilled home messages around the shift in thinking about the US. For instance, he stated that China now stands for learning, while the US's culture is more focused on short-term profits.  He also talked about how the next generation is less educationally prepared than the Baby Boomers.

While I have pages and pages of notes I could share, I thought some of the most telling sound bytes were captured in the following phrases the  panel and audience used to refer to the maturing workforce issue:

• The Fear of Change

• The Roof is Starting to Leak

• The Meltdown

• The Knowledge Vacuum

• The Quiet Crisis

• Solving the Crisis

• What Would be the Cost of Doing Nothing?

Finally, in addition to all the suits in the audience, we also had about 11 students from the I.C. Stars organization attend.  I.C. Stars provides opportunities for inner-city young adults to harness the strength of technology for social and economic leadership. By integrating technology training and leadership development, I.C. Stars is shaping the next generation of technology leaders.

Midway through the conversation, many of the audience members and panelists began asking the students about what they need from the next generation and suggested some questions they should ask potential employers.  At the close of the session, many of the panelists passed up conversations with others to speak directly with the students.  This  really gave the discussion an interesting dynamic, and made me think of that classic CSN&Y song  "Teach your children well"  which in today's maturing workforce could be re-spun as  "Teach your parents well" --either way, the bottom line is we're all learning as we grow (or should I say "mature"?).

I look forward to hearing what others are learning ... 

--Duffy Gaynor

Vice President-IBM Global Services and

Senior Location Executive

Is "modular" work the way?

(Here's one account from a "blogs eye-view witness" (a.k.a an attendee) at the recent IBM summit on the maturing workforce...Would "modular" work for you? What do you think?) 

Is “modular” work the way?

So says Harvard Business School professor at IBM summit on maturing workforce

To help spur action on the multi-generational economy, IBM held a major “influencer” summit in New York City on November 14. Comprising 65 guests and two participatory panels, the summit also featured two acclaimed speakers: former U.S. Secretary of Labor Robert Reich and Harvard Business School professor Rosabeth Moss Kanter.

Speaking without slides or notes, Secretary Reich declared that “Demographics is destiny.” U.S. baby boomers have high expectations for retirement, but with low savings rates and house resale values that are likely to disappoint (given the shrinking population in the post-boomer years), they generally won’t be able to afford it. This will force many people to work past traditional retirement age. The question, however, is whether companies are prepared to accommodate them. Not yet, Reich said. He urged companies, for their own good, to try to retain what he termed “relational capital”: those older employees harboring years of experience with customers, suppliers, and partners. He mentioned possible remedies that IBM itself has proposed: phased retirement, on-the-job training, flex-time, flex-place, and more. Interestingly, he thought that while Social Security would survive, helping to ease the situation a bit, healthcare in the U.S. was in dire straits.

Professor Kanter, the luncheon speaker, echoed Reich’s observation that costs are rising as people “want it all,” and went on to discuss innovation as it applied to the maturing workforce. Saying that “Innovation is always beyond what we see today,” she broached two novel concepts. One is the idea of “modular work,” akin to discrete bursts of work much like extended project work. Retirees could work in modules — as could younger workers, who are often focused on raising families. Tailoring work to life’s needs, modules could help to discard possibly outdated notions like full-time and part-time work. Another idea, now percolating at Harvard, is a school for advanced institutional leadership. In one-year fellowships, it would train retiring business leaders and other high achievers to tackle global problems like poverty, healthcare, malnutrition, and the environment. Answering fears that the program could be seen as elitist, she asserted that “Elite programs can lead massive change.”

- Submitted by Linda Hanson, written by David Harrison (Both from IBM) 

At the recent IBM summit on the multigenerational workforce in NY, I had the pleasure of hearing Robert Reich, the former Secretary of Labor address the audience (having read his books for years I have always wanted to hear him in person). What struck me about his talk was his focus on the importance of "relational capital" - the importance of relationships in working within the knowledge economy. Having done a significant amount of research on this topic (we typically refer to it as "social capital") it is always refreshing to hear a recognized economist talk about the critical nature of this resource, particuarly as it relates to the value of mature workers.

Related to this discusssion is an article written by a former colleague of mine, Barry Spiker and Suzzane Peterson entitled, "Establishing the Positive Contributory Value of Older Workers: A Positive Psychology Perspective" (Organizational Dynamics Vol. 34, No. 2, 2005)

http://www.elsevier.com/wps/find/journaldescription.cws_home/621045/description#description

This article further reinforces the notion that mature workers bring a set of connections and relationships that are difficult to replace. I would recommend this article to those interested in the topic.

Continuing the Conversations...

I came to IBM in late 1993 to reengineer IBM's global corporate social responsibility efforts and to launch IBM's efforts at strategic philanthropy including the initiation of the Reinventing Education Program; and here I am a dozen years later talking about boomers reinventing retirement. While the topics seem unrelated, I believe they are actually intimately connected.

In the U.S. for example, replenishing tomorrow's workforce will require a national effort in our schools and in our businesses. On one hand, we have the potential for a mass exodus of millions of experienced workers, and on the other, we have both a crisis in student performance and a massive teacher shortage in our schools, especially in the areas of math and science. As job demand for skills in science, engineering and technology increases, 76 million workers are approaching retirement and fewer U.S. students are expressing interest in math and science -- all while competition from developing nations grows. This is no time for the U.S. to have a labor shortage especially in these critical areas and no time to be losing our teachers. However, we believe innovation can bridge these trends and create opportunity.

This is why IBM recently announced its Transition to Teaching Program. We're helping our interested, eligible and experienced workers become certified teachers. Our internal response and industry reception has been overwhelming. We've invited our partners and competitors to participate and will openly share methodology, materials and ideas on the topic. But this is one program, and across the U.S., we need more. We need more from business. We need more from academia. We need more from government.   

We believe the socio-economic implications of the maturing workforce are worth discussing today. And based on the number of people who have attended some of our recent events, clearly, we are not alone. Since May, IBM has hosted a series of small "salons" on the topic of the maturing workforce. Our intent from the start has been simple -- create a forum for the open exchange of ideas and information.  From Washington, to San Diego, to Chicago as well as cities in Europe and Asia, we have uniformly heard that this type of conversation is not only welcome, but necessary. Which is why we will be culminating this series with a larger event in New York on November 14. We expect some of the nation's leaders on economic, labor and workforce issues to join us -- including former Secretary of Labor Robert Reich.   

I invite those of you who've been part of our salon discussions, as well as the folks we'll meet at the November event, to share some of your own research and insights on this blog. Feel free to post on any issue relevant to this topic -- whether it's government programs, business insight, consumer marketing, or macro-economic implications. I look forward to continuing the conversation at the event in November and, on an ongoing basis, here on the Maturing Workforce blog.

-- Stan Litow, Vice President, Corporate Community Relations, IBM    

 

Early retirement still popular

I lead a research team working on age and employment issues at the University of Cambridge. Despite many reports over the last 15 years on the implications of demographic ageing for labour markets early retirement remains popular among governments, employers and older people themselves. Ambitious European targets on the employment of older workers are unlikely to be met. On the one hand European governments sign up to these targets, yet policies aimed at the inclusion of older workers coexist with ones aimed at their exclusion. Our research also shows that even among 'best practice' companies, when push comes to shove, early retirement remains a popular management tool. European workers, expectations raised by decades of early retirement, are reluctant to work for longer, and react angrily when they feel their rights are being threatened. One area of study for us is workplaces as we believe that workplace barriers have been neglected. We have undertaken a number of organisational case studies in recent years. Some findings may be of interest:

• Awareness of the financial implications of retirement is often low among non-managers. 
• A significant minority of employees have thought little about what they are going to do in retirement.
• Early retirement is often the preferred option by some distance amongst staff. Some kind of gradual retirement is much less popular, and few staff want to work on to normal retirement age or beyond.
• Analysis of our survey data has shown that a lack of flexible employment opportunities and a lack of recognition for good performance are associated with an increased propensity for an employee to state a preference for early retirement.
• Many of those we have surveyed have a ‘conventional’ view of retirement transitions.  The vast majority are not interested in the option of downshifting (i.e. dropping a grade or two or transfer to a post with less responsibility before retirement).  However, the majority are interested in reducing the hours they work prior to retirement.
• A stereotype concerning older workers is that they are not interested in training.  Yet one of our surveys found that training and skill needs were important to the vast majority of staff aged 45 or over (90 per cent).
• Yet when asked whether their needs were being met, the majority of respondents (69 per cent) replied in the affirmative regarding training and skill needs, but the opposite was the case regarding career development, with just over a third (36 per cent) stating that their needs were being met. The majority of respondents also felt that they received insufficient support in terms of managing their careers, with only 28 per cent stating that their needs were being met. 

I hope this contributes to the discussion.

-- Dr. Philip Taylor, Executive Director, Cambridge Interdisciplinary Research Centre on Ageing, University of Cambridge

Maturing Workforce A View from the UK

I recently attended a dinner sponsored by the IBM Human Capital Management practice in the UK. In coversations with twelve Chief Human Resources Officers who were discussing the topic of the Maturing Workforce, a number of important themes became clear: Choice is an important component for employees as they approach retirement age. Some will choose to work, others will choose to do different kinds of work, while others will opt to exit the workforce. Where organizations need to focus is providing employees options, that, at the same time, are cost effective and relevant for the organizations themselves. Training was a subject raised by several individuals. Organizations have to get past a mindset that firms are less likely to obtain a return on investment on older workers, either because older workers don't want to learn or that their learnings can not be applied over a long enough time horizon. For firms to retain productive workers, training can help improve skills levels and make workers feel that the firm still finds their capabilities valuable - an important retention tool. This point was strongly emphasized by Dr. Sarah Harper, the Director of the Oxford Institute of Aging at the Universtiy of Oxford (http://www.ageing.ox.ac.uk) Many firms still do not have the analytic capabilties to determine which key positions they are most risk for losing, and the associated risks attached to losing individuals within those positions.

-- Eric Lesser, Associate Partner, IBM Institute for Business Value 

Maturing Workforce: D.C. Perspective

I have a personal interest in the "Maturing Workforce." I joined IBM so late that, according to my benefit calculations, after I die I still have to work six years.

ISeriously, I'm a native Washingtonian. In Washington, it's not only the Redskins who are maturing. The federal government is, too.

In fact, a huge percentage of federal workers -- I believe it's more than 60 percent --  are eligible to retire in the next five years.

That's going to create a "brain drain" in one of the key institutions that itself is trying to solve the problems of aging baby-boomers: pending retirement, diminished social security funds and spiraling health-care costs.

I can see it now. Concerned citizen calls Help Desk at Government Agency:

Citizen: "What are we going to do about our retirement, social security and health care systems?"

Agency: "Beats us. All the people with expertise in that area have retired."

Citizen: "Any idea who might help me?"

Agency: "Umm, maybe you'd better ring someone in Florida."

Seriously, this is important stuff. Yet I'm amazed by the apparent lack of concern from some of the highest officials here in DC.

Prime Example: This Monday, presidential advisor Andrew Card took what I considered a cheap shot at federal government service, not only for the mature but for the young. He told a group of 2000 interns -- some of the best and brightest in the country, that (this directly from the Washington Post), "There are many programs for young people to have employment opportunities, but the greatest employment opportunities in our society come through the private sector," said Card, a former vice president of General Motors Corp. and ex-president of the American Automobile Manufacturers Association. "And so I don't think that everyone who is looking for a job should expect or even want a job with the federal government or one of our agencies. In fact, our economy would not do very well if people just worked for the government."

Seems to me that if we're about to lose massive numbers of federal workers, and their knowledge, these smart young people are exactly the ones we want in government.

Compare Mr. Card's comments to those of Clay Johnson. Clay is deputy director for management at the Office of Management and Budget (i.e. Head U.S. Personnel Honcho). Mr. Johnson is out drumming up support for the "Working for America Act," a bill that would reform federal government personnel rules to "require agencies to better manage, develop and reward employees." Hmm -- better management. Better development. Better reward. Find creative ways to retain and keep employees in federal service (not servitude).

Certainly we don't want everyone working for the government. And thanks, Mr. Card, for your endorsement of the private sector. But the reality is that civil employees over the past 20 years have become far more than "servants." They are professionals whose expertise we can scarcely afford to lose.

As for me, I give the better approach to Mr. Johnson. "Hail to Clay." And well, at least "Good luck" to the 'Skins.

-- Andy Kendzie, Public Sector Communications Director, IBM

The Workforce is Maturing - Time to Prepare

Eric Lesser, Institute for Business Value, Human Capital Management Leader, IBM Business Consulting Services

 

There are lots of things we don't know about the future. We do, however, have the luxury of knowing for sure that one big change is coming. The workforces in developed countries are aging.

 

What should we do with this precious foreknowledge?

 

Prepare.

 

The maturing workforce is likely to become the single biggest social issue of this new century. Governments, employers and workers will all struggle to adapt to a social change which, over time, will prove to be as big and as important as the entrance of women to the workforce in the twentieth century.

 

Good preparation starts with a lively discussion of the issues. As Jim stated quite well, with this blog, we want to make a start. There’s a lot to discuss. The maturing workforce is going to impact public finances, change employment patterns, alter worker expectations and put pressure on governments to rewrite tax, pension and employment rules.

 

Let's start the discussion on the impact of this massive social change on the workforce of the public sector, which faces especially challenging demographics.   For those ready to dig deeper on the issue, you can read a paper on the subject on how governments can seek future prosperity.

 

What we want to help create is a forum for contributing experts who are approaching these issues from different perspectives.  I too extend an invitation: We want to build out this group blog to include insights from people concerned about the looming perils in the public sector and to tee up issues for debate and discussion.  If you want to contribute, you can do so by engaging in the debate using the comment feature, or if you’d like to become a regular contributor, e-mail us here.

 

Together, we can move this from discussion and debate, to real action on the issues.

 

Uncle Sam Meets Chicken Little?

Jim Cortada, Insititue for Business Value, IBM Business Consulting Services

 

Look out ahead! There's a speed bump on the road to prosperity... While governments around the world are implementing numerous initiatives to make their economies competitive in a global market, there are some flashing yellow lights: 

 

ð        Increasing social commitments.  In the developed world, falling birthrates are coupling with aging populations to rapidly shrink the workforce.  As the ratio of retirees to working citizens rises, governments will be harder pressed to support their retirees.  By 2010, the OECD predicts for its member nations, the cost of social commitments will exceed the revenue for them.

ð        Inability to raise sufficient revenue.  According to the European Policy Center, the cost of caring for retirees in Member States will grow 3-7% per year in the coming decades – while GDP growth in these states has averaged 2% per year.  Growth rates, then, would have to triple or quadruple to meet this burden.

ð        Variable, competing funding priorities.  Even with superb planning, it is difficult to foresee all possible contingencies and their costs.  Before 9/11, who in the U.S. would have envisioned the need for homeland security as it exists now – with its $550-600 billion annual cost?  These unplanned expenses can crowd out investment in infrastructure and R&D needed to ignite economic growth.

ð        Rising globalization.  With international competition for jobs, capital, services, and goods, governments are less able to act independently or monopolistically within their borders.  They’re obliged to take steps – often expensive ones – to increase their attractiveness.

 

So why a blog on these issues?

 

If governments fail to respond appropriately and with due speed to these real and inescapable threats, they risk fiscal instability, the loss of national competitiveness, and, ultimately, a drastic decline in living standards.  Nations accustomed to prosperity and built upon it could find themselves facing social unrest.

 

But we're not here to focus on doom and gloom, our aim is to generate some awareness and discussion around these issues.  This blog isn't meant to be a discourse on how the current demographic dynamics are warping the workforce in the public sector, but rather a forum for contributing experts who are approaching these issues from different perspectives.  We hope to build out this group blog to include insights from people concerned about the looming perils in the public sector and to tee up issues for debate and discussion on what is possible.  We'll also branch out on occasion to discuss how the maturing workforce is impacting other industries and countries.

 

And of course, we'll include the latest news and trends we see out in the world and give our take on what is real, what is hype and what we should be thinking about as we move forward. It is our firm belief that the if the sky really is falling, there's no time like NOW to hoist it back up on the pillars of innovative and creative thinking.

 

Please join us -- we are happy to host guest bloggers on our site to tee up issues for discussion, and if you'd like to be a regular blogger on this site, we welcome that too. As new members join they will post a bit about their background and dive right into the discussion. If you'd like to participate, just start commenting. If you'd like to become a regular or guest, drop us a line here.