Hiring Older Workers Can Give You a Competitive Edge

Northwest Florida businesspeople have plenty to worry about in today’s economic downturn. But here is a factor that few area business leaders may be focused on: Betty Isabelle.

The ‘Rehirement’ PhenomenonHiring older workers can give you a competitive edgeBy Dave Bruns

Northwest Florida businesspeople have plenty to worry about in today’s economic downturn. But here is a factor that few area business leaders may be focused on: Betty Isabelle.

Isabelle, 58, is a behavior support teacher for the Escambia County School District in Pensacola. Despite already receiving retirement benefits, she is in no hurry to leave her job at Reinherdt Holm Elementary School in Pensacola.

“I’m just not ready to leave the kids,” she says. “I feel like I can still make a difference in their lives.”

Isabelle is far from alone. Some 26 percent of employees in Florida’s schools and colleges are age 55 or older, according to state work-force statistics.

It’s not just schools. In several key Northwest Florida economic sectors, workers age 55 or older make up one in five or more of the work force — real estate (22 percent), health care and social services (19.7 percent), manufacturing (20.5 percent) and even agriculture and forestry (23.4 percent). Statewide, Florida had a whopping 1.44 million workers age 55 or older as of 2007, and the number is growing at 80,000 per year.

Succeeding generations aren’t as large, so if the baby boomers retire en masse, where will businesses find qualified replacements? Further complicating the issue: The retirement boom could kick off as Northwest Florida’s economy starts to pull out of today’s economic downturn. State economists say such a recovery could start in late 2009 and be well under way in 2010.

For area business leaders, here is the key issue: If you’re biding your time now, planning to grow your business in a year or two when the economy turns up again, you may find yourself dealing with an unexpected factor — too few experienced workers.

Sounds preposterous, doesn’t it? These days, if businesspeople happen to lose a key employee, finding a qualified replacement is simple. Post the job online, or take out a “help wanted” ad, and qualified applicants pour in.

However, leading work-force experts and top Florida officials say the labor market conceivably could tighten in just two years.

Yet there’s a silver lining in the baby-boomer retirement cloud. Many boomers want to stay on the job, either because they just enjoy working or because their financial plans haven’t worked out, and continuing to work is a financial necessity.

As with any trend, agile companies can win big. Those businesses that can retain or recruit older workers could gain a strong competitive edge for 2010 and beyond, holding on to critical business knowledge, adding effective performers to their teams, and avoiding a “brain drain.”

While the dynamics are complex, this issue boils down to one simple fact: There are a lot of baby boomers. In February 2008, Kathy Casey-Kirschling, who divides her time between Vero Beach, Fla., and Cherry Hill, N.J., became the first boomer to turn 62 and claim Social Security benefits.

Born one second after midnight on Jan. 1, 1946, Casey-Kirschling was one of an estimated 2.9 million baby boomers to turn 62 in 2008. Today, boomers are hitting age 62 at the staggering pace of 7,900 per day nationwide. And age 62 is one of the two biggest retirement ages in the U.S. work force. The most frequent age of retirement is 65, which Casey-Kirschling and her compatriots will reach starting in 2011.

In Florida alone, the Florida Department of Management Services (DMS) expects all of the state’s employers, both public and private, to need about 1.4 million new employees by 2015 because of retirements.

Yet, because succeeding generations are smaller than the baby boom generation, finding top-quality talent probably will get harder. The state’s 35-to-44-year-old population will actually decrease by 3.9 percent between now and 2015, DMS predicts.

“Today, businesspeople are understandably concerned about the tough short-term economic horizon. These are very difficult times,” says Lori Parham, AARP’s Florida state director. “Yet, smart business leaders should be thinking past today’s recession to a longer-term issue — how they’ll deal with the coming brain drain as boomers retire, and what could shape up as a tough Northwest Florida labor market throughout the second decade of the 21st century.”

Rebecca Rust agrees. A respected economist for the Florida Agency for Workforce Innovation, Rust says the retirement of the baby boom generation is “a significant problem” for the nation.

“But because of the older population and the increased demand for health care, it could be a bigger issue for Florida,” she says.

Better than just about anyone else in Florida, Rust knows that there are more applicants than jobs these days. The numbers rolling into her office show that Florida has gone from the nation’s largest creator of jobs in 2005 to among the nation’s top job-loss states in just three years.

But Rust also notes that the state’s official economic forecast predicts Florida’s economy may hit bottom sometime in mid-2009 and begin to grow slowly in late 2009. Florida could return to more normal growth rates by 2010 or 2011, the forecast says.

Remember that the first boomers turn 65 in 2011. Northwest Florida could see an economic upturn just as business decision-makers are seeing huge numbers of mature workers hit the door, taking with them critical business experience, customer contacts and institutional knowledge, Parham notes.

A range of other voices, however, are saying there’s an upside: If you know where to look, and what to offer, you may find plenty of top talent just when you need it — by looking at older workers.

Consider Maryellen Clemens, a veteran tax expert with the Florida Department of Revenue. A longtime CPA who has served in top finance jobs in the public and private sectors, Clemens brings hard-to-match knowledge to her analysis of tax issues.

At age 75, she could probably retire — and take that hard-won expertise with her out the door. But she enjoys her job too much to leave. Finances are a consideration, too.

“Nobody’s going to pay for my house but me, and I still have a mortgage to pay off,” Clemens says. How long will she keep working? “As long as I can go,” she says. “I don’t feel even 65.”

Stock market turmoil in 2008 means she’s not alone. Many baby boomers are reconsidering retirement plans.

According to an October 2008 AARP survey, some 65 percent of workers age 45 or older say they will have to put off retirement if the economy doesn’t improve significantly. Even before October 2008, about seven in 10 boomers told AARP they are considering working past traditional retirement ages.

Kimberly Moore, CEO of Workforce Plus, the regional work-force board for Leon, Gadsden and Wakulla counties, is already seeing the trend. In late 2008, Moore teamed up with staff of the Tallahassee Senior Center to hold “Experience Works,” a series of workshops focusing on older workers.

Moore found the workshops jammed with prospective mature workers, many of whom are re-entering the work force because of economic reverses in today’s stock market.

“A lot of them probably misgauged what they needed to live on,” Moore says. “You know, people are living a lot longer these days, and some of them are finding that their retirement preparations are coming up short.

“A lot of others just aren’t ready to retire — they feel that they have a lot to contribute and just want to give something back,” she says.

Put 72-year-old Emil Pagliari in the second group. In 1999, Pagliari found himself newly divorced and with little to do after his day job at Eglin Air Force Base as a Lockheed-Martin military contractor building simulators for AC-130 Air Force gunships.

“I didn’t need another job,” says Pagliari, of Fort Walton Beach. “Financially, I was set.” He had retirement benefits from the Navy and his defense job. “But I was tired of hanging around bars, crying in my beer because my wife left me after 25 years.”

So when a weekend job opened up at the Crabshack, a Fort Walton Beach restaurant and marina, Pagliari jumped in. Starting as a $6.50-an-hour dockworker, he soon was helping with bookkeeping, then became a business partner. Now Pagliari owns the joint.

With steady customers, 24 employees, a 94-slip marina and $1 million a year in sales, Pagliari is clearly having a ball.

“I tell my customers, if you have a problem, please see the general manager. If your meal was great, come see me.”

How long will he keep working?

“Quit?” Pagliari asks. “I’m having too much fun!”

How to recruit or retain older workers

• Flexible schedules Often, a few months off is all a mature worker needs to recharge. Working two or three days a week, or half days, may also be attractive.
• Phased retirement Key mature employees “step down” from a full- to part-time role, often helping to save important institutional knowledge or transitioning business contacts to other employees.
• Mentoring opportunities Some mature workers find it rewarding to pass along their hard-won knowledge.
• Retirement benefits Boomers whose finances took a hit may find a sweeter retirement package to be a big incentive.