A Changing American Workplace, as Boomers Retire As baby boomers start retiring, the nation's workforce will lose an immense amount of institutional knowledge. A look at what this means for the workplace, post-boomer.
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A Changing American Workplace, as Boomers Retire

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A Changing American Workplace, as Boomers Retire

A Changing American Workplace, as Boomers Retire

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This is TALK OF THE NATION. I'm Neal Conan in Washington.

There are roughly 76 million baby boomers in America, sons and daughters of the World War II generation. By next year, the leading edge of the boom turns 60, and for many that means one thing: Retirement is just around the corner. By decade's end, some 40 percent of American workers will be eligible for retirement. Usually, this is where the conversation goes to problems with Social Security and health care, but some labor economists point out that this enormous group of retirees will pose tough problems for business as well. Who will fill the labor gap and what kinds of skills and institutional memory will be lost? Some industries like manufacturing, which have had a hard time recruiting younger workers, will be disproportionately hit. On the other hand, some companies see it as an opportunity to trim the personnel rolls and bring in fewer, more flexible and less expensive replacement. And as boomers finally give way to gens X and Y, the culture and structure of the American work force seems certain to change.

Later in the program, a new anthology that emphasizes the `I' in journalism.

But first, the post-boomer business world. If you own or run a business, what'll happen when your boomers retire? Have you planned for it? And we want to hear from boomers, too. What'll be lost when you retire? Has the company thought about how to replace the experience that you've all amassed? Our number here in Washington is (800) 989-8255; that's (800) 989-TALK. And our e-mail address is totn@npr.org.

To start us off, we're joined by David DeLong, a researcher at MIT's AgeLab as well as the author of the book "Lost Knowledge: Confronting the Threat of an Aging Workforce." And he's with from a studio at MIT in Cambridge, Massachusetts.

And it's nice to have you on the program.

Professor DAVID DeLONG (Researcher, MIT's AgeLab): Great to be with you.

CONAN: How far away are these problems?

Prof. DeLONG: They're here now. We have in the next 10 years--between 2003 and 2013, workers age 50 to 64 are going to--that group is going to grow 40 percent in the American work force. At the same time, sort of prime-age workers age 35 to 49, which does sort of overlap the gen-Xers and baby boomers, is actually going to shrink 10 percent.

CONAN: So this is going to be a recurring problem and an increasing problem over the next 10 years?

Prof. DeLONG: Yes, we're going to have this huge exodus, unprecedented exodus of workers from the work force. But it isn't just about people leaving. Can I explain?

CONAN: Sure.

Prof. DeLONG: The real problem here is we're now retiring the first generation of professionals and managers who have deep knowledge of complex technical systems--that is, databases, networks, advanced technologies, advanced scientific fields, pharmaceutical drug development and integrated work processes and management processes, such as managing global operations and distributed operations. So that means these people are leaving the work force with knowledge that didn't exist 20 years ago.

CONAN: Isn't it generally true that the next generation is faster and even more technologically savvier than those that they would be replacing?

Prof. DeLONG: That's generally true, although there are some, you know, false assumptions about that, some--we make about that. But more important is business is just coming to recognize that these older workers--and a lot of them contain experiential knowledge that doesn't have to do with technology, whether you're a nurse in an ICU or an engineer, you know, building a space probe for NASA or a teacher in a classroom who's been doing it for 30 years, you have experience and knowledge that is irreplaceable or that takes a tremendous amount of time to gain and/or to transfer.

CONAN: You've mentioned health care, aerospace and education. What are other industries do you think will be heavily affected by this phenomenon?

Prof. DeLONG: Well, government is one that's going to take one of the biggest hits. I hope you're sitting down because by 2008, 50 percent of 1.6 million federal workers in the United States are going to be eligible to retire. And in the nuclear power industry, 28 percent of 60,000 workers are going to be ready to leave in five years. And at the same time, they're going to have turnover of almost 20 percent of young employees.

We talked about nursing. Fifty percent of nurses are going to retire within 15 years, just as the demand for health care is going to accelerate, just as baby boomers age and need that help. The petroleum industry--geoscientists, the efforts made to explore and produce oil--expects 60 percent of its employees to retire by 2010. And the problem there is that we don't have the people in the pipeline; there aren't petroleum engineers being trained today, sufficient numbers, in order to replace those people who are leaving.

CONAN: Not enough numbers to replace those who are leaving. There has been a large influx of foreign workers, immigrants, into this country. People talk about the brain drain, that we bring in skilled people from all around the world. Couldn't that make up for at least part of this loss?

Prof. DeLONG: Yes, and actually the United States is in a better position than some countries. Neal, this is a global problem. It's not just about the United States. Companies like Germany, Italy, Spain and Japan actually face much worse demographic trends and shifts in their work force than we do. Germany is going to lose almost 20 percent of their work force in the next 20 years. Their entire work force is going to shrink by 20 percent. So...

CONAN: That's obviously causing problems for them down the road as they look at how to sustain their welfare state and their social safety net. But we're talking about other issues here, about how businesses can respond. And if you run a business or own a business, have you planned for the retirement of your boomers? If you are a boomer or somebody approaching retirement age, what skills would your company lose if you retired, and have they been planning to replace those skills? (800) 989-8255. E-mail us: totn@npr.org.

And let's talk with John. John's calling us from Little Rock, Arkansas.

John, are you there?

Prof. DeLONG: Hey, John...

JOHN (Caller): Yes, I am.

CONAN: Ah, you're on the air. Go ahead.

JOHN: Hi. I've actually got a cabinet shop and it seems strange today, but finding skilled craftsmen is becoming more and more difficult, and most of us are in our 40s, late 40s. And finding young people to take our place is next to impossible. And I see myself reaching retirement age and not having anyone I can rely on to take over my business.

CONAN: So there's nobody in the next generation who's got anything close to the skills that you'd think they'd need?

JOHN: Well, they're not interested in it. We have too many businesses that are, you know, in the technology industry, and actually having craftsmen is next to impossible.

CONAN: David DeLong, you hadn't mentioned craftsmen, but I guess that's a problem there, too.

Prof. DeLONG: Yes, absolutely. There's a lot of fields today where young people just are less attracted to than they were historically, whether it's auto maintenance, which has become a much more complex field because of all the computers that are in cars today; electricians--there are shortages of electricians already. There are many fields--prison guards, you know. There are a lot of fields that just aren't appealing to younger workers coming out of school and saying, `Well, I'm going to go be a prison guard as opposed to, you know, working with technology.' So there are many fields that suffer with this problem.

Can I make one...

CONAN: John...

Prof. DeLONG: Go ahead.

CONAN: Just let me ask John a question. We'll get back to you.

John, what are you going to do with your company?

JOHN: I'm probably going to sell it when I retire.

CONAN: And do you think that you'll find somebody who's willing to buy it?

JOHN: I hope so.

CONAN: Well, good luck to you.

JOHN: Thank you.

CONAN: And I'm sorry, I didn't mean to cut you off, David DeLong.

Prof. DeLONG: No...

CONAN: Go ahead.

And have we just lost David DeLong? Well, apparently we've lost the line to MIT, at least temporarily. We will try to re-establish it.

In the meantime, let us turn to one company that's facing the issue of an aging work force. That's the Platte River Power Authority in Ft. Collins, Colorado. Their human resources manager, David Green, joins us now on the phone from Ft. Collins.

Nice to speak with you today.

Mr. DAVID GREEN (Human Resource Manager, Platte River Power Authority): Afternoon.

CONAN: Do you know how many of your employees are about to reach retirement age?

Mr. GREEN: Well, we surveyed our employees about a year and a half ago, and 40 percent of them told us that they were likely to stay less than five years.

CONAN: Forty percent are not likely to stay longer than five years?

Mr. GREEN: That's right.

CONAN: So that's a huge amount of your work force that you're going to have replace?

Mr. GREEN: Yeah, we have only 200 employees in total. So that's about 90 people telling us they're going to leave.

CONAN: Well, you're going to lose warm bodies, but we've been talking to David DeLong--aren't you going to be losing a lot of experience, a lot of highly specialized knowledge and institutional memory?

Mr. GREEN: Yeah, we're very concerned about that, but we were able to identify some particular areas in our staff where we're the most vulnerable and we're putting some systems in place to try to address that now.

CONAN: And what's your company doing to prepare?

Mr. GREEN: Well, a couple of things we've done is--one is to hire a training coordinator to handle our technical training needs in our power plant. We have a coal-fired power plant. And we've also created a new position we call a plant assistant, and this is to prepare people for apprenticeships in either operations or maintenance. We've hired two people into that job already.

CONAN: And are--you think that you're going to be able to develop the numbers that you're going to need to replace the retirees?

Mr. GREEN: We're going to have to do that ourselves because utilities all across the country are facing the same issues, and we can no longer recruit from the rest of the area. We feel like we have to develop our own people.

CONAN: And what about those who retire? Are you considering trying to lure them back, at least part-time?

Mr. GREEN: Well, we're looking at that. There are some restrictions on what you can do under pension plans. The IRS regulations prevent us from paying them a pension and paying them to work at the same time. But we're working on some programs where we can do that on a part-time temporary basis so we don't totally lose that experience and knowledge.

CONAN: I understand you joined us today by stepping out of a meeting there at your company that's addressing these very issues.

Mr. GREEN: Yeah, one of the things we're working on today is trying to develop what we're calling a Platte River Academy which will be focused more on the management and supervisory skills that we need in the organization. The other things we've talked about this afternoon are focused more on the technical needs.

CONAN: When you talk about that Platte River Academy, in other words you want to train managers?

Mr. GREEN: Exactly. People that are already on our staff who have shown potential for management or supervisory roles, and we want to help develop them.

CONAN: And might some of those retirees be educators now or consultants?

Mr. GREEN: That's a possibility. We haven't gotten that far in our planning yet. But it's more likely to be current managers and supervisors that become mentors.

CONAN: Well, David Green, thanks very much for speaking with us and good luck to you.

Mr. GREEN: Thank you.

CONAN: Dave Green is a human resource manager for Platte River Power Authority in Ft. Collins, Colorado, where he joined us by phone.

We're going to take a short break. David DeLong is back with us from MIT--we can hear him on the line. So we'll be talking with him and taking more of your calls on this subject. Again, if you run a company or own one, have you prepared for the retirement of your baby boomers? If you're a baby boomer who's thinking about retiring or maybe not, what would be lost to your company if that particular cohort left all at one time?

I'm Neal Conan. (800) 989-8255 if you'd like to join us; (800) 989-TALK. Or you can send us e-mail: totn@npr.org. Back after the break. This is TALK OF THE NATION from NPR News.

(Soundbite of music)

CONAN: This is TALK OF THE NATION. I'm Neal Conan in Washington.

We're talking today about the future of the American workplace once the baby boomers retire. In the next five years, companies face the loss of much institutional knowledge and some of their most expensive employees. You're invited to join the conversation. If you own or run a business, how are you getting ready for boomer retirement? If you're a boomer nearing that golden watch, what will your company lose when it loses you? (800) 989-8255; (800) 989-TALK. Our e-mail address is totn@npr.org. Our guest is David DeLong, author of the book "Lost Knowledge: Confronting the Threat of an Aging Workforce." He's with us from the studios at MIT, where he's part of the MIT AgeLab.

And let's get another caller on the line. This is Susan. Susan's calling from Cincinnati.

SUSAN (Caller): Hi. Yeah, I don't get it. I'm not--this is not my experience at all. What I am seeing is an elder population of work force who is unable to retire, although they may be reaching retirement eligibility. And I'm wondering if there are some statistics that counter this information in any degree where what we're still facing is age discrimination, plain and simple; where a younger work force needs to be absorbed, they can capture the knowledge they need to do the job, but the older work force is, you know, taking on the Wal-Mart jobs; they really can't afford to retire and don't wish to, but they're, through various programs, being asked to or forced to.

CONAN: David DeLong?

Prof. DeLONG: Yeah. The caller is speaking to the complexity of this problem. You know, Neal, it's really a landscape. We are going to have many older baby boomers who frankly can't afford to retire because they're relatively low-skilled and they don't have retirement savings and they're going to be in a difficult position. But at the same time, there are many boomers also who are going to be ready to retire and whose knowledge is going to be critical to the organization sustaining its performance.

One point I want to make sure that gets understood here--this is not some benign issue about some older workers going off into the sunset to play golf. This loss of knowledge in this era has some major implications for the safety of organizations, for profitability and for their sustaining and continuing to improve performance, for the ability of the economy to grow. And the caller's right, though. There are people, and there are going to be stories of older workers who should retire--this is not about full employment for older people. This is about identifying the key people in your organization who have critical knowledge that is essential to sustaining operations. Can I give you a couple of examples?

CONAN: If you would.

Prof. DeLONG: For example, I was told not long ago about a chemical plant explosion down on the Gulf Coast. Unfortunately, we're watching a hurricane right now. And that plant had an explosion. Fortunately, nobody died, but when the company went back and did a postmortem, they found that nobody in the plant had been with the company for more than a year, and the senior engineer was out of college less than a year, and the human resource manager said to me, `I'm afraid this is going to happen more often as we have less experienced people running these highly technical, complex operations.' NASA lost space probes in 1999, lost two space probes which they can directly attribute to the lack of expertise on the project teams that launched them. They made mistakes that cost millions of dollars in space projects because of the lack of experience.

CONAN: Susan, it sounds like a lot of the people you're talking about are in a different category.

SUSAN: Well, possibly. But I still am curious about the whole age-discrimination category for skilled and non-skilled workers. You know, I recognize that air traffic controllers and NASA space scientists make the premium, and that's recognizable and understood, but, you know, the combination of percentage of population that will be eligible for retirement but unfortunately, whether skilled or unskilled, whether talented or untalented in the view of their employer, are then left into the general population of work force to blend with the younger group coming in. They're still not going to be selected over the young, perky, assumed by employers trainable, to bring them into the company and build revenue and generate enthusiasm.

So I'm curious about those statistics. I recognize they are certainly valid, but my personal experience, and probably a lot of others', is that what we are seeing is an aging population unable to retire from various walks of life and professional capability, who are just going to be left out there with no health care coverage or limited resources. And, you know, your guest is right, it's a multi-layered experience for those people. Thank you.

CONAN: Thanks for the call, Susan.

Yeah, go ahead, David.

Prof. DeLONG: Let me suggest one other thing that's going to happen is, one thing that is misunderstood is that a lot of the people and a lot of the industries that are going to be most affected are traditional industries, like government, the power industry, energy sectors, manufacturing, where people actually do qualify for pensions. And a lot of these people are going to take those pensions when they qualify for them and they're going to run because they're tired of the way they've been treated in organizations. So they're going to take it and they're going to leave with their knowledge. And they're going to go on. They're not going to stop working. Susan's right. They're going to keep working. But they're going to redesign a career or jobs for themselves that are much more to their liking, maybe three days a week, maybe start a new business. There are a lot of options for boomers, for those who have some access to pensions and to retirement benefits. And we can't assume that all these boomers are going to stick around.

CONAN: Well, Bruce Tulgan has given considerable thought to what will happen to the American workplace when boomers do retire. He's the founder of RainmakerThinking, a New Haven-based business consulting firm which studies changes in the workplace. And he joins us now from a studio at Yale University in New Haven, Connecticut.

Nice to have you on the program.

Mr. BRUCE TULGAN (Founder, RainmakerThinking): Thanks very much for having me.

CONAN: So when this demographic bulge reaches retirement age and many of course retire or go on to other jobs, what's going to change?

Mr. TULGAN: Well, a big part of what's happening, of course, is the work force is aging, just as your caller pointed out, at the same time that businesses, particularly health care, government, manufacturing and the energy sector, the transportation sector, are losing some of the most valuable institutional memory. But it's not just institutional memory and skill and knowledge and wisdom. You're also losing the oldest, most experienced people who have followed the old-fashioned career path. The reason they're eligible for pensions and might actually go on and re-invent retirement is because they've actually paid their dues and climbed the ladder and done it the old-fashioned way.

And a big part of what we've been looking at is the shift in norms and values in the workplace. And as generation X and generation Y become a greater percentage of the work force and as they begin to dominate the prime-age work force, what you're going to see is this revolution in workplace values and norms is going to continue. Already employees have much less confidence in employers' long-term promises. Employees worry about their prospects for receiving long-term rewards. You tell a young person today that, pay your dues and climb the ladder and you'll get a pension in 25 years, and they think you're trying to sell them a bridge.

So a lot of the shift toward a more short-term transactional mind-set--what's the deal around here? Employees pushing back, making demands, not just listening to what their boss has to say but pushing back. A lot of this shift that has been happening over the last 10 years is--you're going to see this accelerate as the oldest, most experienced people with the last vestiges of the old-fashioned work ethic start to move on.

CONAN: You seem to be talking about a much more free-lance future.

Mr. TULGAN: Well, whose idea was this, right? It was business leaders who decided that everything had to change. Remember, downsizing, restructuring, re-engineering, these things that have become the norm in the business world have had a real impact on the mind-set of the work force. And while the oldest, most experienced people may not be the squeaky wheels, they may be waiting until they qualify for their pension. And as Professor DeLong says, you know, they may take the money and run. But the younger, less experienced people, they've never known it any other way. So I think--it's not that they're free agents because they're disloyal job hoppers by nature; it's that people realize now we operate in an uncertain environment. A business has to be lean and flexible. Every single day it's `Work more, better, faster. We're raising the bar, but we're cutting your budget.' In that environment, employees start thinking, `Gee, what's the deal around here? I got to take care of myself and my family.' And so they're much more tentative and it's much more one day at a time.

CONAN: Let's get another caller in on the line. And this is Sandy. Sandy calling us from Jacksonville, Florida.

SANDY (Caller): Hello?

CONAN: Hi. You're on the air, Sandy.

SANDY: Hi. Well, I am that ICU nurse you were talking about. I'm 53 years old. I work actually in Gainesville. And I'm not planning on retiring--well, I mean, eventually I'll have to, but not in the next few years. However, I am planning on leaving the bedside in about five years.

CONAN: And do what?

SANDY: I want to teach. I want to teach other people to be nurses.

CONAN: And fill up all of those spaces that are going to be created when people of your generation leave for one reason for another.

SANDY: That, plus the fact that there is already a nursing shortage that's going to be worsened when the baby boomers leave.

CONAN: And of course there's going to be more demand for nurses, as we've been talking about, because all those baby boomers are eventually going to need some care.

SANDY: Correct. Correct. In addition, there are a number of people who are, you know, going to nursing school, they're learning how to be nurses, but at the same time I know a number of people who are on waiting lists to go to a nursing school. The reason they're not able to go is because there are not enough educators. So that's how I want to help solve the problem is I want to be one of those educators.

CONAN: OK. And I think I heard both Bruce and David try to get in there. David, why don't you go first?

Prof. DeLONG: Thank you. Yes. The real bottleneck in nursing right now is the nursing faculty is much older and retiring, and we can't train nurses fast enough. There are actually young people who want to become nurses, and we can't get them the training they need.

To Bruce's point, I agree 100 percent with everything he's saying, and that's one of the things that makes this trend of retiring boomers so difficult. It's what I call the three R's. You're dealing with not just retirement of boomers, but retention of mid-career employees or much higher levels of turnover among mid-career employees in what Bruce is describing as sort of the new environment, and problems of recruiting. So many companies and sectors have been out of the business of actively recruiting for the last 20 years--they've been so busy downsizing--that they've forgotten what it's like to recruit in the current market.

CONAN: Bruce.

Mr. TULGAN: Yeah. And as Professor DeLong said, this problem is already happening, and there's more than a million Americans ages 75 years of age and older who are in the work force still; another 1.4 million who are ages 70 to 74; 2.7 million who are ages 65 to 69. So you're seeing, as the work force ages, at the same time 3.5 million baby boomers have left the work force in 2001, every single day, the oldest, most experienced people who still have that long-term career path, they're leaving. And what you're seeing is that the workplace revolution that we thought was about the late '90s about magical business models--the real workplace revolution is about an environment where business is going to be very lean and flexible, and the premium is going to be: Recruit better people, get them up to speed faster, get more work and better work out of every person.

How you manage a short-term transactional employment relationship is very different, and you see this in health care already, where nurse managers are forced to hire temporary nurses. They're forced to go back and hire their retired nurses. They're scrambling to fill these gaps, and where maybe the gap is growing the fastest is what we call the midlevel leadership gap. The bench strength for leadership in organizations is really a huge problem. There's a dearth of bench strength for leadership. And as organizations try to figure out how to adapt, it's precisely--as Professor DeLong said, they're already scrambling to recruit. They're--and if they use their old systems of getting people up to speed and they use their old systems for managing, what they find is that they lose people inside of a couple of years. They get no return on their training investment. So they need to find a much more high-intensity approach to recruiting and training and managing people so that they get more work out of them more quickly.

CONAN: Sandy, thanks very much for the call, and good luck with the second career.

SANDY: Thank you.

CONAN: Appreciate it.

We're talking about the post-boomer work force in America. You're listening to TALK OF THE NATION from NPR News.

And let's talk now with Nathan, and Nathan's calling us from Portland, Oregon.

NATHAN (Caller): Hello.

CONAN: Hi. You're on the air, Nathan. Go ahead.

NATHAN: Yeah, hi. As kind of a young person just recently out of college, I found it kind of difficult to get a job that was--seems like not many people are willing to invest in training a younger person. You always have to have experience to get a job; sort of a Catch-22 there. So I was wondering what companies are doing, if any individual companies are investing in training programs to reach out to younger people in anticipation of this problem coming up.

CONAN: Well, obviously, we heard some about nursing, but David DeLong?

Prof. DELONG: What industry are you in--are you interested in?

NATHAN: Well, I was able to find a job. I'm a chemical engineering graduate, so...

Prof. DELONG: Right. Well, there's going...

NATHAN: But some of my fellow students in engineering are having kind of a difficult time.

Prof. DELONG: One of the challenge with fields like chemical engineering or engineering in general is a lot of the traditional employers are in places where you might not want to live. You know, you're in Oregon, I believe, and, you know, that's a place that would be very attractive. But there are companies in the Midwest and in places that are harder to attract young people to, and the market, actually, for people in your field is going to just explode in the next five or so years, because there are so many engineers and chemical engineers leaving the workplace.

CONAN: Nathan, it sounds like you've made a wise investment already.


CONAN: Good luck.

NATHAN: All right. Thank you.

CONAN: Bye-bye.

Let me ask you, Bruce Tulgan, you're talking about companies in the future having to be quicker, more flexible, more short-term than ever. What does that mean for long-term planning?

Mr. TULGAN: Well, it's one of the problems, is you can make all the long-term plans you want and then, all of a sudden, unexpected things happen and you have to shift your plan. One of the things about an environment of uncertainty is resource needs become very unpredictable. This whole skill shortage--you know that it's going to occur in certain industries, but some labor economists think, oh, there's going to be a huge skill shortage across the board, and yet there might be technology that might intrude and change that. Immigration might intrude and change that. Outsourcing might intrude and change that. So my view is that businesses can make long-term projections, but they have to take action with much more short-term focus. That is to say, they have to execute on a short term.

I'll give you an example. You take the chemical engineer that was just on the phone. My guess is who--OK, he's got a job, but the likelihood is that the company that's hiring him is trying to hire him onto the old-fashioned career path, and they're really putting themselves in an awkward position if they're trying to shift their population and they're hiring a bunch of young people onto the old-fashioned, long-term career path. They're putting themselves in a very awkward position because it's not likely that people are going to follow that path, and it's not likely going to serve their interests over time. And yet if you're a young person coming out of school and you want to get a job, you humor the employer and say, `Oh, yeah, I'm going to work here for my whole career.'

CONAN: Mm-hmm. Bruce Tulgan, thanks very much for being with us today.

Mr. TULGAN: Thanks for having me.

CONAN: Bruce Tulgan, founder of RainmakerThinking, a research consulting firm in New Haven, Connecticut. He joined us from the studio on the campus of Yale University.

And we'd also like to thank David DeLong for his time today.

Prof. DELONG: My pleasure.

CONAN: David DeLong is author of "Lost Knowledge" and a researcher at MIT's AgeLab, and he joined us from a studio at MIT's campus in Cambridge, Massachusetts.

When we come back from a short break, personal journalism: Putting the I back in journalism. It's TALK OF THE NATION from NPR News.

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