Becky Dorris felt jittery as she sat in Starbucks, but it had nothing to do with the caffeine. At 58, she was applying for her first job in years. To make matters worse, her only previous experience was with her husband’s business, and most of the store’s employees were of college age.
BUT THE COFFEE SHOP giant had a deal she couldn’t refuse: Full medical, dental and optical coverage for part-time work.
“That’s a big deal to anybody, but especially to somebody older,” said Dorris, who continues to work 21 hours a week at Starbucks, three years later. “I recommend it to a lot of my friends who want to work part time, because insurance is so expensive.”
That’s music to the ears of Starbucks, which has sweetened the pot to entice older employees in anticipation of a shortage of workers. And not just in coffeehouses: While layoffs and unemployment now grab the headlines, number-crunchers say the labor shortages of the late 1990s are ready to make a comeback, and the biggest drop will be among the young.
“When you look at the demographics over the next 10 years and upwards, the labor pool is going to come from the older workers,” said Jo Davidson, Starbucks’ partner resources manager for Northern California.
Indeed, the Bureau of Labor Statistics expects the number of people in the labor force age 55 and older to grow 32 percent by 2010, while those between 35 and 44 will shrink by 10.2 percent. Workplace experts say that means businesses must actively attract or retain older workers, as there simply won’t be enough younger people — much less those with adequate experience — to make up the difference.
“At a certain point, we’ll be back where we were two years ago ... but now we’ll be experiencing (a labor shortage) in an economy that maybe isn’t so hot, and that’s maybe why the economy isn’t so hot,” said Rick Beal, a consultant with human resources consulting firm Watson Wyatt Worldwide.
Businesses like Starbucks are already putting policies in place to avoid the shortfall, but the vast majority are still more focused on tomorrow’s numbers rather than next year’s roll call.
“Basically the mood out there is, we need to cut to please the analysts,” said Mike Freccero, San Francisco managing director for the Spherion Human Capital Consulting Group.
He estimates that less than 10 percent of businesses are tackling the problem proactively, even though he expects the Bay Area will experience “the greatest labor shortage” ever within the next 18 months.
Targeting older workers, however, isn’t just about putting warm bodies into seats. Such workers, experts and businesses agree, also have a storehouse of knowledge, experience and management insight that’s very difficult to replace.
“The main benefit is you’re holding on to that knowledge base that otherwise walks out the door,” said Beal. “As we’re becoming a more knowledge-based economy that’s important capital.”
AGING GRACEFULLY
Signs that employers are looking to older workers are already beginning to appear.
For instance, after reaching a 13-year high two years ago, job search times for workers over 50 shortened to an all-time low of 2.96 months last year, according to outplacement firm Challenger, Gray & Christmas. That despite an overall hiring slump.
Similarly, the current downturn has seen a pronounced decrease in the use of early retirement packages, a favorite cost-cutting device during the recession of the early 1990s.
“That’s in part from the learning of last time,” according to Beal. “You lose a lot of good people.”
Moreover, he said there’s now a recognition that the people best equipped to get businesses through tougher times are those with the most experience and those who have lived through a few economic cycles.
So what can businesses do to keep and attract older workers?
The most frequently cited tool is, as in the case of Starbucks, additional flexibility. Some businesses are allowing older workers to cut back their hours, use more flex-time or work from home, while allowing them to keep their full benefits.
South San Francisco-based biotech Genentech and consulting firm Ernst & Young both offer these types of programs to all of their workers, though both acknowledge that they have a particular appeal to older employees.
Genentech also offers a six-week sabbatical program for every six consecutive years of employment, and a retiree medical plan that recovers some health-care costs for retiring employees with 10 or more years of company service.
As the demographic trend kicks into high gear, Beal says more businesses will have to enhance their 401(k) or benefits programs in this manner, essentially offering incentives for workers to stick around a while longer.
Contrary to popular assumption, older workers are also often very interested in additional education and training. Forty-four percent of “matures” (ages 55 to 69) and 66 percent of baby boomers (ages 36 though 54) list it as a high or moderate priority, according to the Randstad 2001 Employee Review survey.
Ernst & Young offers such training and education programs for employees at all levels through a program called People First, which helps employees to add technical skills or soft skills like management or communications.
“We want to develop people’s careers, we’re building people’s résumés,” said Pennie Hink, human resources location consultant for Ernst & Young. “If they stay here that’s terrific, but if they leave we want them to go with a better résumé. What happens is we get people with industry experience that then come back.”
InsertArt(1517698)In fact, from May 2001 to May 2002, 21 percent of the company’s hires were rehires.
The one favorable trend for businesses looking to attract or keep older workers is that employees often want to stay longer these days. One reason is that people are generally in better physical shape now and can simply work later in life.
Another is that the stock market over the last two years has in many cases cut deeply into many retirement accounts.
“People are financially compelled to stick around,” said Spherion’s Freccero.
Copyright 2002 American City Business Journals Inc.