iedc 2007 national conference september 18, 2007

IEDC 2007 National Conference • September 18, 2007

Who are the Baby Boomers?

BORN AGES (2007)Silent Generation 1909-1945 62-98 years (aka Veterans, Mature Generation)

Baby Boomers (aka Boomers) 1946-1964 43-61 years

Generation X 1965-1979, or 28-42 years, or1965-1981 26-42 years

Generation Y 1978-2000, or 7-29 years, or(aka Echo Boomers, The Second Baby Boom, 1981+ 26 years and underThe Internet Generation, The Millennials)

Generation ZEarly 1990s-

2001 6-17 years

This is the issue:

Starting in five years and lasting for more than a decade, the nation, states, and localities will face a huge potential loss of their most productive and skilled workers due to retirement,

while…

the younger workforce will be too small, unskilled and inexperienced to fill the gap.

Economies and Employers Governments

Unprecedented skills and workforce shortages

Declining labor productivity

Enormous health and services expenses

Declining revenues

In this session we will explore:

What impact this demographic situation will have on labor markets and employers

What is being done at the national and state levels to meet the challenge

What employers are doing now to meet the challenge

What areas can do now to prepare for the future

The Speakers

The SituationGeorge Robertson:America’s Communities Workforce 2010

Solutions Being TakenBill Fredrick:Public/Private/Non-Profit Sector Efforts

AMERICA’S COMMUNITIESWORKFORCE 2010

George Robertson

Cenla Advantage PartnershipSeptember 18, 2007

IEDC Annual Conference

THE PERFECT STORM FOR A WORKFORCE DISASTER

• Growth of knowledge is exponential

• Decade of the nineties…all knowledge on Planet Earth will double

ELEMENT ONE…TECHNOLOGY EXPLOSION

3000 NEW BOOKS ARE PUBLISHED

DAILY

TOTAL NUMBER OF PAGES ON THE WORLD WIDE WEB

200 BILLION

DOUBLING EVERY 6 MONTHS

TECHNICAL INFORMATION NOW DOUBLING EVERY TWO

YEARS

A student starting a four-year engineering degree last September…

Will have to re-learn as a junior what they were taught as a freshman, because it will be outdated.

2010 AMERICAN REALITY

An unprecedented number of baby boomers will retire in the U.S.

And be replaced by a smaller generation

…less well educated

…less prepared with specialized skills needed by a high-tech economy

TOO MANY WORKERS WITH THE WRONG SKILLS

Majority of parents, students, and educators have outdated at best and misinformed at worst knowledge of new career opportunities…

And they know even less about what education or specialized training is needed for these high-paying careers

GETTING THE WRONG DEGREES

More U.S. students degrees last year in Parks and Recreation

than in ElectricalEngineering

ENGINEERING DEGREES

UNITED STATES

All Bachelor Degrees Engineering

1988 71,386

2001 65,195

Electrical Engineering

1988 24,367

2001 12,292

60% foreign students

THREATENED BY GLOBAL HIGHER EDUCATION TRENDS

U.S. college graduates with engineering/technology majors: 17%

China: 52%

Korea: 34%

ELEMENT TWO: AN AGING WORKFORCE

1976: 60% U.S. workforce

under 40….

2006: 52% over 40

THE US TALENT POOL OF SKILLED WORKERS…

“There has never been anything like today’s aging population…the potential economic meltdown it might bring.”

Edward E. Gordon

www.imperialcorp.com

will shrink by 6% during the 2010 decade

OVER 50% OF ALL ENGINEERS IN THE UNITED STATES…

Are over age 40

Only 4% of NASA scientists and engineers are under 30

THREATENED BY GLOBAL COMPETITION …….

World population growing younger

World labor supply growing 80% faster than U.S.

THERE ARE MORE PEOPLE IN INDIA UNDER THE AGE OF 10

…than there are people in the United States

WHEN IT COMES TO WORKFORCE…

SIZEMATTERS

IN THIRTY MINUTES OF THIS PRESENTATION

Babies born in the U.S.

360

Babies born in China

1,464

Babies born in India

2,106

THE TOP 25% OF CHINA’S STUDENTS…

are more than the entire student population of

North America

WHERE ARE ALL THE SUPERVISORS AND MANAGERS?

Valley of the Baby Bust:

Generation X

FOR RURAL AND SMALL-CITY AMERICA, AN EVEN GREATER

PROBLEM….

Generation Y larger but migratory…

The out-migration of our youth

The young… the restless…

CREATIVE CLASS…A PARADIGM SWITCH

Magnet centers….”These places are talent magnets and talent aggregators. Their key function is to provide a regional talent pool into which firms can dip as needed and from which new ideas and firms bubble up…..places have replaced companies as the key organizing units in our economy.”

Richard FloridaThe Rise of the Creative Class

THE MAGNET CENTERS KEEP EXPANDING

88 Largest MSA’s (over 500,000 population) represent as of 2005 63% of US population

88 MSA's

rest ofUS

BABY BOOMERS79 MILLION STRONG

Have long distorted U.S. population balance

70 million will exit labor force in next 18 years

TO BE REPLACED BY

40 MILLION WORKERS

BOOMER RETIRMENT….at-risk industries…Illinois Study

Education 17.8%

Manufacturing 16.4%

Mining 16.2%

Other Services 16.2%

Transport/warehouse 16.2%

Healthcare 15.5%

Finance 14.9%

AGING WORKFORCE US DOL STUDYING 30 STATES

IST state report Iowa 2000-2004

Manufacturing18.3% over 55 22.4% in rural areas

• 15% workers statewide over 55

• 99 Counties: 15 had 20% of workforce over 55

• 99 Counties: 95 had increase in older workers

• MSA’s 13.8%; rural 16.5%

• 55+ industry sectors: mining 23%, education 22%, real estate 21%, utilities 20%

• Oldest industry: agriculture 7.4% over 65

...BOOMERS BY SELECTED OCCUPATION IMPACT

(BLS,1998,0ver 45yrs)

Farmers 68.5%

Clergy 56.9%

Millwrights 56.6%

Dentists 51.3%

Teachers 50.3%

Telecom Installers 49.0%

Tool and Die Makers 46.7%

NURSING: ALREADY IN CRISIS

80% Master-level nurses retiring next 5 years

38% US Nursing Schools report current faculty shortages

USDHHS NURSING SHORTAGES PROJ.

2008 450,000

2020 808,000

WHY AREN’T WE TALKING ABOUT?

• 85% Science/math teachers K-12 retiring next 5 years

• Average age of a plumber in America: 58 years

• Machinists/millwrights: old and older

WHAT WILL BABY BOOMERS DO?

50% say they will work into their 70’s

WHY? Money Health Insurance Boredom

BUT…

A significant number will change career fields

WILL BOOMERS REALLY RETIRE?

BOOMERS 55-64

MALES:68% currently working

FEMALES77% currently working

Labor-force participation ofthose over 55 has to increase by 25% starting in 2011 to maintain current levels of U.S. productivity

BROOKINGS INSTITUTE STUDY 2007 ON LEADING-EDGE BOOMERS

More bad news for rural and small-city America…

BOOMERS AREON THE MOVE, ALSO

PRE-SENIORS AGE 55-64 GROWING-ON THE MOVE

World War II generation (over 65 years)

Continues to move West, with the exception of California and the addition of Florida

Leading-edge boomers

MOVING

Southwest, Southeast, and Northwest

LEADING-EDGE BOOMERS FASTEST GROWTH

Large MSA’s1. Las Vegas, NV2. Austin, TX3. Raleigh, NC4. Atlanta, GA5. Phoenix, AZ6. Portland, OR7. Albuquerque, NM8. Dallas/Ft. Worth, TX9. Orlando, FL10. Jacksonville, FL

Small SMA’s1. Santa Fe, NM2. Anchorage, AK3. Bend, OR4. Coeur d’Alene, ID5. Boise City, ID6. St. George, UT7. Fairbanks, AK8. Flagstaff, AZ9. Olympia, WA10. Ft. Collins, CO

U.S. CENTER FOR STRATEGIC AND GLOBAL STUDIES

“ Countries will have to race against time to ensure their economic and social fabric against the shock of global aging.”

A thought..do our communities realize they are in a race against time?

“If everything seems under control, you’re just not going fast enough.”

Mario Andretti

A THOUGHT FOR COMMUNITY ECONOMIC DEVELOPMENT

POLICY

Without the workforce of the future…

YOU HAVE NO FUTURE

A FINAL THOUGHT….

“When the rate of change on the outside exceeds the rate of change on the inside, the end is in sight!!”

Jack Welch, former CEO, General Electric

GEORGE L. ROBERTSON, PRESIDENTP.O. BOX 465 ALEXANDRIA LA. 713091-318-767-3001WWW. CAPCENLA.ORG

The Need to Retain

• Increasing US labor participation needed among 55+ year-olds for 2% annual economic growth– 2003: 77.6%– 2010: 90.4%– 2020: 91.6%

(Source: Strategies to Retain Older Workers, Pension Research Council Working Paper, The Wharton School, 2004)

National Governors Association

• Recognized the issue of massive Boomer retirement and its broad-based threat

• State-based strategy taken: one-year, 8-state Policy Academy

• Arizona as mentor

• Interact with peers and national experts

• Next 2 years in planning stage; RFPs


Ensure states are providing employment and volunteer options to future and new retirees, including baby boomers

GOAL:


Policy Academy Objectives:• Position states as role models• Identify needs of the labor market • Review current state policies affecting

older adults• Develop new information tools• Enhance training and educational

opportunities

State Initiatives

• Wyoming – Boomers and Business Initiative

• New York – Project 2015

• Utah – Aging Initiative

(Source: NGA Center for Best Practices)

State Efforts

• Iowa, Mississippi, Pennsylvania– modified unemployment compensation policies

• California, Florida, Kansas, and West Virginia – higher-ed phased retirement options

• Iowa – phased retirement for state employees; a model

for the private sector

• Wisconsin– employer assessment toolkit to evaluate

mature-worker friendliness(Source: NGA Center for Best Practices)

AARP Aging Workforce Advisory Council• Serve as a think tank• Provide understanding of the effects

of the global aging of the workforce • Be a “sounding board” and

implementation vehicle for targeted industry groups

AARP Aging Workforce Advisory Council• Share information on workplace best-

practices re mature workers– recruitment – retention – and (re)-training

• Annual workforce summits and position papers on the issue

Private-Sector Actions

For employers……the impending large Boomer retirement is more an operational issue than an HR issue


Employer options• Recruit younger workers• Become more involved in workforce

development and training; consortia, partnerships

• Greater use of apprenticeships, internships• Outsource work (domestic, foreign)


Employer options• Hire recruiters, contractors, staffing services• Import foreign labor (H1-B, H2-B, TN, L-1

visas)• Adapt innovative flexible HR policies for not-

employed and a multi-generational and diverse workforce; employer-of-choice policies;

• Improve productivity• Keep employees past age 65• Downsize, close or relocate


Retaining mature workers frequently makes the best business case• Cost effective• Knowledge retention• Operating efficiency• Quality workers

…but all workforce-related efforts would be needed or considered


How employers are preparing to keep mature workers

(Source: Older Workers Survey, Society for Human Resource Management 2003)


Incentives being used to retain mature employees• Flexible work arrangements • Training to upgrade skills• Time off for volunteerism• Phased retirement• Reduced shift work• Job rotation• Sabbaticals• Reduced responsibility• Mentoring as a primary job(Source: Valuing Experience: How to Motivate and Retain Mature Workers,

The Conference Board, 2003)


IBM• Transition to Teaching aims to help older

employees transition into second careers as math and science teachers

• Pilot program in New York and North Carolina



CVS Pharmacy• Mentoring program for senior

pharmacists to high school students and apprentice pharmacist technicians

• Training opportunities for mature workers at the company



Prudential Financial• Programs and policies for Boomers as

caregivers for elderly parents


Local Boomer Impact

The local Boomer impact ……will vary significantly by location.

Impact factors include labor-force dynamics and the size of the Boomer population.

WDG’s Boomer Stress Index shows considerable impact variations among the 362 metro areas.

What Can Local EDOs Do?

“For every complex, difficult problem, there is a simple, easy solution…and it is wrong.”

H.L. Mencken


• First– For this complex situation, avoid the

single-solution approach– Use a full-solution approach


• Second– Identify the issues– Recognize how your area will be

affected and know your assets/challenges

– Create a plan, segment tasks, and activate

– Promote public recognition of the issue


Identify stakeholders, build

alliances, leverage work,

coordinate, and share resources and

tasks with…


…SHRM/employers …Workforce Boards…Universities/colleges/tech, public schools …State/local AARP office…Government officials…Residential developers and realtors …Unions…Intra-state alliances


•Serve as a catalyst for educator-training programs– Match needs of employers– Adult, non-credit– For-credit– Employer customized

•Work for improved public schools, basic skills, housing


Serve as a catalyst for employer action… …Retain and hire employees 55+ as policy…Knowledge retention …HR/management policies for mature

workers …Multi-generational, diverse workforce

management …Training programs…Consortia development for training

academies…Career planning for X and Y generations


• Promote the value of the mature workforce

• Promote the business case for mature workers

• Provide new information tools and improve existing systems that connect 55+ workers to employment opportunities

• Job, career counseling for Boomers, 65+

• Y generation: basic skills, career planning, STEM careers (America Competes Act)


• Retain and recruit skilled Boomers• Retain and recruit X’ers and Y’ers • Retain college/university students• Institute “Come Home” programs• Labor-law lobbying for 65+ workforce

regulations• Understand QOL and career issues, and

other needs for each group


• Collect and publicize employer best-practices

• Provide immigrant workforce recruiting assistance– Visa information– Recruiter, labor broker coordination

• National immigration policy lobbying • Be creative• With partners: collaborate, innovate,

advocate

505 Morris Avenue, Suite 102Springfield, NJ 07081973-379-7700wfredrick@wadley-donovan.comwww.wadley-donovan.com

Sharon Younger, President

Younger Associates

SummaryIn five years, we will see the frontal wave of Boomer retirements…..

…….which will grow in intensity and last for over 10 years, likely creating significant economic and workforce impacts, including large scale across the board labor shortages;

…….and the X and Y generations will not be able to fill the void under current conditions

…….while impact intensity will vary geographically

Summary

…by local and state EDOs…by employers

…by educators…by WIBs

…by governments…by non-profits

…by others

But corrective action has started and something can be done…

Summary

This action must be comprehensive and collaborative, but new models and mindsets are needed.

We have some time!

Follow-upFor copies of this presentation and reference material from the National Governors’ Association, the Arizona Mature Workforce Initiative, the WDG Boomer MSA Stress Index, the WDG MSA Talented-Young Index, and other resources and sources used in this presentation, visit:

www.wadley-donovan.com/workforce

Background Image credit: NASA, ESA, and the Hubble Heritage (STScI/AURA)-ESA/Hubble Collaboration

THANK YOU!www.wadley-donovan.com/workforce

iedc 2007 national conference september 18, 2007

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