FOR Challenger, Gray & Christmas, Inc.
For Release Upon Receipt
Experience Seen As Productivity Edge
WORKERS OVER 50 HIRED IN RECORD TIME
Job search times for workers over 50 shortened last year despite a recession-related hiring slump, indicating that companies are filling positions with experienced, skilled employees to maintain productivity and fend off a potential knowledge drain as the huge Baby Boom generation begins retiring.
After reaching a 13-year high just two years ago, search times for over-50 job seekers fell to 2.96 months in 2001, the lowest annual average ever, according to new data released Friday by Challenger, Gray & Christmas, Inc., an international outplacement firm.
Search times for 2001 represent a significant drop from 3.55 months in 2000 and 3.83 months in 1999, which was the longest average search time for over-50 workers since Challenger began tracking such data in 1986.
"It appears that employers are beginning to realize how valuable a proficient, mature worker can be during a rough business cycle.
And companies looking at demographic trends can see how important it will be to attract and retain older workers in the years to come," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Those over 50 still face longer job search times than their younger counterparts. However, their average search time in 2001 was just .27 months (or eight days in a 30-day month) longer than all job seekers, the smallest differential since 1995, when only .2 months separated the two categories of job seekers.
Even as job search times, which are tracked quarterly by Challenger, Gray & Christmas, surged in the last half of 2001, older job seekers managed to keep pace. Fourth-quarter job searches averaged 3.4 months for those over 50 and 3.39 months for under-50 workers.
Further evidence of the willingness to employ older workers comes in the latest data from the Bureau of Labor Statistics, which show that the unemployment rate for workers 55 and up rose less than a percentage point from January, 2001, to January, 2002, even while the pool of older people in the labor force expanded.
"Older workers are highly regarded right now for several reasons. For one, employers see them as valuable assets in the struggling economy because their experience and skills make them better able to do the work of two and sometimes three younger, less seasoned workers," noted Challenger.
"More importantly, companies are looking ahead -- not just to a recovery sometime this year or next, but 10 years down the road when a labor force depleted by retirements will not be able to fill the jobs our economy is projected to create. As a result, it will become more and more important for companies to find ways to keep older workers from retiring."
According to the Bureau of Labor, the projected number of jobs to be filled (167.8 million) will outnumber available workers (157.7 million) by 10 million over the next decade.
The biggest job growth is expected to occur in knowledge-based occupations, such as sales, management, business/financial, business services, and office/administrative. Currently, about 81.6 million jobs are related to gathering, processing or using some type of information. That figure will grow to about 95 million by 2010.
Who will fill these jobs? Older workers will most likely get the call. The number of people in the labor force age 55 and up is expected to grow 32 percent by 2010, according to projections by the Bureau of Labor Statistics. Meanwhile, the number of those age 35-44 will shrink by 10.2 percent.
"The key need for employers will be to reverse a trend of increasing early retirement, particularly among men," said Challenger.
The labor force participation rate among men 55 to 64 has fallen dramatically since 1970. In 1970, 83 percent of American men ages 55 to 64 were working or looking for work. In 2001, the figure was 68 percent.
Oftentimes, early retirement comes unexpectedly. A 2001 retirement survey by the Employee Benefits Research Institute found that 40 percent of Americans expect to retire before age 65. In reality, 65 percent of retirees report actual retirement aged younger than age 65.
In many cases, unplanned early retirements are preceded by job loss. In a report to Congress this year, the General Accounting Office (GAO) stated that in 2000, 57 percent of older workers who lost their jobs retired, partially or fully, following a job loss.
Once older workers fully retired, most did not re-enter the labor force even for part-time work.
In its report, the GAO warned that "the possible loss of many key, experienced workers could create shortages in skilled worker and managerial occupations, with adverse effects on productivity and economic growth."
The report cited examples of private and public companies that have instituted programs designed to prolong the working life of older workers. These programs included offering flexible hours and financial benefits, reducing workloads through the use of part-time or part-year schedules, and job sharing.
Neuville Industries, of Hildebran, North Carolina, employs a combination of these programs to delay the retirement of its oldest workers. At age 59 1/2, employees are eligible for pre-retirement benefits. They are no longer required to work overtime and performance ratings for advancement and pay raises are lowered from 100 percent to 85 percent, meaning they do not have to work as hard, according to a company spokesman.
Those with five years on the job are also eligible for job sharing with another eligible employee. Each person works 20 hours of the standard 40-hour work week.
Challenger has developed its own program of phased retirement called "Soft Landing"* that is similar to the Neuville approach in that it gives older employees the opportunity to ease into retirement.
Soft Landing goes a step further by arranging for the outgoing employee to work closely with the individual(s) who will be filling his or her position. This transfer of knowledge allows for a smooth, seamless transition of job responsibility and the least interruption to customer service.
"By moving employees into retirement gradually, more corporate memory is retained. The soon-to-retire employee can pass along to remaining coworkers his or her personal experiences that relate to working effectively. He or she can teach less experienced staff members about customer needs and idiosyncrasies. Such continuity is vital in order for companies to maintain a good reputation and a competitive edge," said Challenger.
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*A copy of a bylined article by John Challenger on Soft Landing can be obtained by requesting R-9. The article title is: Business Cannot Afford to Let Experience Walk Away.