November 2006

Employee Benefit News

By Molly Bernhart

Some factory and white-collar workers in Asia are literally working themselves to death. Employees have been dying on the job of exhaustion, heart attacks and strokes after working sixteen-hour days.

While we don't have a problem this extreme in the United States , work intensification due to a shrinking workforce has become a growing concern for American HR professionals.

In just two years, U.S. companies expect to lose 11% or more of their current workforce due to the retirement of baby boomers, says Deloitte Consulting. This impending loss is largely unrecognized: 51% of medium-sized companies report they are just becoming aware of the future labor shortage, and only 35% are beginning to examine internal policies and management practices to prepare for it, says the Society for Human Resource Management 2006 Workplace Forecast.

"The problem looks quite significant," says Tim Phoenix, principal and national leader of Deloitte Consulting LLP's total rewards practice. "Companies understand the numbers of it, but the vast majority of companies haven't decided what to do about it."

The retirement of personnel with specialized skills will lead to a talent gap. Companies should strategize now for how they will invest in training new employees and restructure the remaining workers facing the increased workload.

"We need them to work harder than ever before, we need them to work faster than ever before, and we need them to work better together than ever before," says Robin Athey of Deloitte research, author of "It's 2008: Do You Know Where Your Talent Is?"

All of that pressure could stymie employee productivity, Athey says.

Closing the gap
Bracing for the post-boomer skills gap is fundamentally an issue of supply and demand, says Phoenix . He calls this idea "bending the curves" and it's "not just an HR department fix, this is a total corporate restructuring."

Deloitte says the supply curve can be bent up by more aggressive recruitment techniques, improved retention through internal mobility, alternative work programs and other tactics. Similarly, the demand curve can be bent down by enhancing productivity, improving automated technology and making products/services more focused on customer self-service. By bending the worker supply curve up and bending the pressure on remaining employees down, companies hope to shrink the skills gap.

Phoenix says another technique for coping as baby boomers leave is to recognize "who is most critical to adding value to your business."

The retirement of "critical talent" could be crippling to businesses because this group drives a disproportionate share of the company's business. These employees understand the work itself as well as how to make things run smoothly internally.

Deloitte gives the example of couriers within a package delivery company who have daily client contact and direct knowledge of the supply chain. These employees are not necessarily the decision makers or the best performers, but they have the most critical role in the business' success.

If a company does not recognize their critical work segments they are missing an entire section of their business perspective. Athey says employers should identify these critical work segments, prioritize them, decide where the segment will need to work harder and find out what motivates them. Organizations should have a talent-management process in place to address the workforce shifts without snubbing the non-critical talent segments, because they, too, are valuable to the company.

Power of flexibility and personal contact
The approaching talent crunch will be bigger than any we've seen since World War II, warns Athey. There will be fewer workers doing more work to compensate for the vacancies left by retirees - a trend seemingly incompatible with more and more employees desiring a greater work-life balance. The looming question is, which will win: employers' push for work intensification or employees' request for work-life balance?

"It's not about win,' it's about change," says Durkin. "I think employers are going to need to change the way they view the work environment."

Employers will need to alleviate the pressure on employees in order to "grease the wheels" for knowledge transfer says Athey. Reducing stress for hardworking employees can be done by reducing workplace noise, like the constant drip of e-mails, audio noise, interruptions, misunderstandings and the noise of the unknown.

"[The noise of the unknown is] thinking you're doing the right thing, but lacking clarity of the strategic objective of the company," says Athey.

Greater workplace flexibility can also prevent employee burnout. Jennifer Schramm, manager of workplace trends and forecasting at SHRM, says employers are experimenting with letting employees manage their time more autonomously. Especially when workers are divided into teams, an employer can let an entire group decide how and when they will work.

"People will work harder if you give them flexibility," says Durkin.

Athey warns that as individuals take on more tasks at work, they can lose sight of the company's objectives.

"As business speeds up, we become more disconnected," says Athey.

She suggests having one-on-one performance conversations regularly with employees in order to identify what working environment employees want, determine what drives employees, develop strategies to meet goals and recognize their accomplishments.

"It creates a transparency and alignment between individuals and broader goals," says Athey. "It also brings top management closer to the realities of the business."

Stay, just a little bit longer
Making the workplace appealing enough for boomers to stay is another way to manage the exodus of retirees. More older workers are resisting the trend toward boomer retirement than one might expect. Some may be delaying retirement because of Social Security reforms, changes in employer-sponsored benefits, improved health and less physically demanding jobs, says the Urban Institute.

"We don't think all of these baby boomers are going to retire," says Roger Herman, CEO of workforce consulting firm, the Herman Group. "[Because] the next challenge is to identify and prepare the next level of trainers and learners."

Herman says keeping older workers is crucial to successfully training new employees and ensuring a successful knowledge transfer. Older employees may seek part-time work, contracting, arrangements similar to job sharing and teleworking, but overall, Herman says most older workers won't require difficult accommodations because technology will help "quite a bit."

"We recommend companies don't just close the door on people," says Herman. "If they can work today, they can work tomorrow."

A smooth transition
As boomers train other employees and prepare for their retirement, another set of management issues will surface concerning cross-generational communication and promotion to management roles.

"The shortage is definitely going to affect the skill level in a company," says Dianne Durkin, president of Loyalty Factor, a corporate training and consulting firm in Portsmouth , New Hampshire . "Particularly in interpersonal communication."

Communication between the complex mix of generations in the workplace during training is not always easy. HR professionals should talk to managers or those conducting training about what motivates individuals in these employee segments and suggest communication techniques.

"It's all about creating a learning environment where people are learning the skills they need to affect business strategies," says Durkin.

Employees preparing to fill the shoes of boomers lack experience with the position and sometimes the company. Networking, corporate culture and customer communications - both internal and external - are often difficult for generation X and Y employees because they cannot be accomplished through e-mail or memos. Trainees may not understand building business relationships personally, says Durkin.

Durkin also suggests companies prepare to support new managers as they take on their positions because managing a group they once were a part of can often be a struggle. - M.B.

November 2006

Employee Benefit News

By Dawn Sagario
Gannett News Service

At engineering firm Stanley Consultants, workers say there's no conflict in the younger-boss/older-worker arrangement in some departments.

In fact, Vern McAllister, a principal engineer who has been with the Muscatine, Iowa-based company since 1975, said he hired his current supervisor, George Gardner.

Gardner, also a principal engineer, started at the company five years ago. McAllister is 59; Gardner is 42.

"It's not an issue," said McAllister, "I think the reason it works out so well is . . . everyone is interested in doing good electrical engineering projects. We don't get hung up on personnel issues."

Gardner said he often stops by the desks of the three senior members of his department to ask for their input and feedback. The three younger engineers in the department, he said, "really look to my three senior guys for advice and help."

A new survey out earlier this month by OfficeTeam suggests that the majority of workers would agree that age is just a number.

Eighty-four percent of workers polled said they would be comfortable reporting to a manager younger than they are; 89 percent said they wouldn't mind supervising employees older than themselves.

It's having a good "relationship between you and your boss that's most important," said Stacey Singleton, branch manager of OfficeTeam in Des Moines .

Both sides should listen to each other's perspectives, be sensitive to people's experiences and backgrounds, and be supportive to foster a collaborative work environment, Singleton said.

Younger workers should view those who are older as mentors, she said. "They're going to have a lot of organizational and industry knowledge. They can definitely give deeper insight as to what's going on in the workplace."

Older workers should remember to "be an employee, not a parent," Singleton said.

Gardner said the senior workers are "indispensable" not only with their help on projects but also mentoring the younger staff.

Stanley Consultants was named by AARP last year as the country's Best Employer for Workers Over 50.

Among its nearly 1,100 members, 32 percent are 50 or older; 50 percent are between 30 and 49.

Dianne Durkin, president of Loyalty Factor in Portsmouth, N.H., said that contrary to the OfficeTeam survey findings, she's hearing that tension between Generation X bosses overseeing baby boomer workers is "causing tons of conflict."

"We're getting into the X-ers now who are in their mid-30s who are being promoted, so we're getting older workers working for the younger people," said Durkin, who has been researching the topic for the past six years.

She said baby boomers are "workaholics" who define themselves by their work and performance, and want to be appreciated for their time and effort.

Gen-Xers, Durkin said, want more of a work-life balance, are unafraid of questioning authority, and crave instant feedback.

"The best way to work together is to communicate to one another and learn from one another," she said.