September 30, 2005

With graying of America, workplace grows more diverse

By Patrick Henning
Director, Employment Development Department

California’s workforce has been called the most diverse on earth. It’s about to get even more so. The forces of economics and demographics are combining to change the face of the workplace in California and across the nation. It’s called the “graying of America,” and it’s time for all of us – employers and workers, the private sector and government – to prepare for it.

The Baby Boom that followed the end of World War II has faded into history, replaced in recent decades by the “Birth Dearth” as the prime demographic fact of life not only in America but in all of the industrialized world. Most of the nation’s 78 million Boomers are now in their 50s and 60s. Young people are entering the job market at slower rate than in the past. The number of older workers is growing, and it will continue to grow. Those are the economic facts of life in the 21st century.

An estimated 17.4 million jobs will be created in the United States from 2002 to 2012, according to the federal Bureau of Labor Statistics. Most of them will be filled by older workers. The number of workers from 25-to-54 years old is expected to increase about five percent – from 101.7 million to 106.9 million – by 2012. At the same time, the number of workers 55 and older will increase nearly 50 percent – from 20.8 million to 31 million.

In California, the aging of the workforce is already evident. In 1992, 74 percent of our workers were younger than 45. That figure dropped to 69 percent in 2001. In the same period the number of workers in the 45-to-54 year-old group increased from 15 percent to 20 percent. The number of workers over 65 is also rising significantly – from 11 percent of the California workforce in 1998 to 15 percent this year, according to data compiled by labor market analysts at the Employment Development Department.

This is just the beginning. “Many planners anticipate this proportion will grow even more rapidly over the next two decades unless a large influx of younger workers come into California,” a 2004 report from the U.S. Census Bureau said.

Unfortunately, many employers have not even begun to rethink their personnel policies. Only seven percent have developed a plan for filling the void that will be created by a wave of Baby Boomer retirements, according to a 2003 report.. One-third are doing nothing to deal with the coming shortage of workers. “More than half of organizations are only now becoming aware of the issue or are beginning to examine their workplace policies,” the report by the Society Of Human Resource Management said, and most were neither recruiting older workers nor trying to retain them.

The aging of the workforce should be viewed as an opportunity to be seized, not a problem to be solved, but ignoring the issue will turn it into a problem. Employers must plan adjustments in the workplace to accommodate growing numbers of older workers. Employees, young and old, must adjust psychologically to the new realities. That’s only part of the story. While older workers may have special requirements, they also offer unique benefits. Large majorities of human resources professionals report that older workers provide reliability, flexibility, “invaluable experience,” a strong work ethic.

Just as there is a time for every season under heaven, there should be a place for every worker — young, old and middle-aged – in our economy. Each worker brings something special to the workplace. The question now is whether we acknowledge not only our need for older workers but also the unique gifts they offer.

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