HOWARD RISHER<\/a><\/span>[\/et_pb_text][et_pb_text disabled_on=”on|on|” _builder_version=”4.16″ text_font=”PT Serif||on||” text_text_color=”#363636″ text_font_size=”16″ text_line_height=”1.4em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” max_width=”140px” module_alignment=”center” custom_margin=”10px||60px|” global_colors_info=”{}”]Howard Risher has 40 years of experience as a consultant and HR executive with clients in every sector.\u00a0He has published frequently in HR journals and websites.\u00a0 He is the author or co-author of six book and a growing list of ebooks. The most recent is\u00a0Building the Workforce Government Needs.\u00a0\u00a0He is associated with Grahall Consulting Partners.<\/i>[\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.17.3″ text_font=”PT Serif||||” text_text_color=”#363636″ text_font_size=”24″ text_line_height=”1.5em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” max_width=”720px” custom_margin=”0px||0px|” custom_padding=”||0px|||” text_font_size_tablet=”” text_font_size_phone=”” text_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\nThe COVID-19 crisis triggered profound changes in workforce management as well as the working lives and plans of workers in every sector.\u00a0 In the private sector, the layoffs and discharges reached a quick peak in March and April 2020 when 12.5 million and 9.0 million workers lost their jobs.\u00a0 For the year, 39 million were laid off or discharged.\u00a0 That\u2019s a quarter of the U.S. workforce and close to double the annual average over the prior decade.\u00a0<\/p>\n
In state and local government, the layoffs and discharges were slightly higher, 1.4 million for 2020 compared with an average of 1.2 million going back to 2011. \u00a0<\/p>\n
In 2021 the headlines shifted to resignations \u2013 \u2018quits\u2019 \u2013 and the 45.5 million private sector workers who resigned.\u00a0 Significantly, over the prior decade the resignation totals were increasing steadily but were unnoticed.\u00a0 State and local government employers saw only a modest increase to 2.1 million quits.\u00a0<\/p>\n
The 2022 focus shifted to hiring and job growth. The recent July headlines highlighted the \u201cunexpected job growth\u201d and the 50-year low unemployment rate, 3.5%.\u00a0 \u00a0The media missed the drop in the participation rate (percent of the population working or looking for work) and the increase in number of people \u201cnot in the labor force\u201d.\u00a0 There was also a drop in the number of \u201creentrants\u201d, that is, fewer people were looking for a job.\u00a0 The \u201cdiscouraged workers\u201d increased by 60,000.<\/p>\n
The unemployment rate is obviously good news although it was virtually the same, 3.6% in January 2020, shortly before the first COVID-19 cases.\u00a0 It dropped steadily from the end of the 2008-9 Great Recession.<\/p>\n
For the 12-months ending with June 2022 job vacancies averaged over 10 million a month in the private sector. The total for July was 10.6 million; that\u2019s higher than a year ago.\u00a0 That includes 932,000 government vacancies.<\/p>\n
The vacancies have not made the headlines although they contribute to other recent headlines, most notably the delays and cancellations in the airline industry.\u00a0 Vacancy problems are causing delays and performance problems in virtually every industry, from construction to technology. \u00a0<\/p>\n
A decade before COVID, there were 5 job seekers for every vacancy.\u00a0 Through the decade the ratio declined.\u00a0 By early 2020, it had fallen to 0.8.\u00a0 Today the ratio is 0.5 — that\u2019s one job seeker for every two jobs.\u00a0 Simply stated, there are not enough workers.<\/p>\n
Staffing Shortages in Government and Healthcare<\/h4>\n
The headlines confirm staffing shortages are a growing problem for public employers –<\/p>\n
\u201c\u2018We need them desperately\u2019: US police departments struggle with critical staffing shortages<\/em>\u201d<\/p>\n\u201cAll 50 States Report Prison Understaffing\u201d<\/p>\n
\u201cThe scarcity is especially severe among nurses. Hospitals across the U.S. report a critical lack of nurses in nearly every specialty. The American Hospital Association projects a shortage of 1.1 million nurses by the end of 2022.\u201d<\/em><\/p>\n\u201cThe Economic Policy Institute (EPI) projects there will be a demand for approximately 300,000 new teachers nationwide <\/em>and a supply of just over 100,000 by 2024.\u201d<\/p>\n\u201cThree out of five nursing homes (61%) have limited new admissions due to staffing shortages<\/em>, according to a survey conducted by the American Health Care Association.\u201d<\/p>\nUnlike the private sector, government does not routinely report agency performance, but the vacancies are contributing to performance problems across the country and at all levels of government.\u00a0 A recent column in Time<\/em>, \u201cNo Clean Water, Unplowed Streets: What the Public Sector’s Hiring Problem Means For All of Us\u201d, captured the many varied problems.<\/p>\n\u201cThere are the little things that erode when the government is short-staffed: zoning permits take longer to process, and the wait to get a new driver\u2019s license may be even longer than usual. But long-term hiring problems in government could lead to bigger economic issues in the U.S. economy. Public sector employees maintain the roads that workers drive on every day and operate the buses and trains that move them around. On the local level, they educate children, put out fires, and keep drinking water safe. On the federal level, they guide airplanes and create weather forecasts and process taxes. In short, without enough government employees, a lot of things stop working smoothly.\u201d<\/p>\n
The column continues with a discussion of the widely recognized problems with government hiring practices and the ramifications of working long hours.\u00a0 The author described an untenable reality.<\/p>\n
It\u2019s a Complicated Problem<\/h4>\n
Demographic trends have contributed to the growing worker shortage. Couples are having fewer babies and with increased longevity the population is getting older.\u00a0 That trend goes back to 1900. The age 50 and older population is approaching 100 million or 30% of the U.S. population.\u00a0 The predicted retirement \u201ctsunami\u201d has not happened in part because workers have been working into their late 60s and 70s. Prior to the pandemic, that was a long term trend in the U.S. and in other developed countries.<\/p>\n
There is a core difference in the way the public and private sectors will be forced to address the aging workforce problem.\u00a0 Private employers largely terminated defined benefit pension plans years ago and shifted the costs to Social Security and to employees and their contributions to defined contribution or savings plans.\u00a0 Public employees continue to rely largely on more costly defined benefit plans. \u00a0<\/p>\n
That helps older public employees, but it also serves to lock them in \u2013 that is, until they decide to retire. (In the private sector, turnover holds down benefit costs when the \u2018quits\u2019 freeze vested benefits.)\u00a0 That has contributed to government\u2019s older workforce.\u00a0 When this is combined with the influence of unions in government, it makes it politically difficult to gain agreement on changes in benefit plan provisions.<\/p>\n
The cost differences are compounded by early retirement provisions in defined benefit plans.\u00a0 When retiree benefits start early and are paid over a longer period, it shortens the funding years and adds to the costs.\u00a0 Notably that\u2019s far less important for employers that rely on savings plans.\u00a0 Early retirement was once seen as a \u2018reward\u2019 for hard work and a long career but that\u2019s now contrary to the trend to defer retirement.\u00a0 For decades, the public and private sectors have been going in different directions.<\/p>\n
Another difference is the continuing prevalence of seniority policies in government.\u00a0 Those polices have largely disappeared in the private sector and replaced with policies and rewards based on performance.\u00a0 When careers are governed by seniority, it creates a harmful divide between younger and older workers.\u00a0 Older workers are seen as a barrier to their careers.<\/p>\n
The increase in life expectancy also adds to the costs.\u00a0 When the Social Security Act was enacted in 1935 was just under 62 years. Today a 65-year old can expect to live 20 more years.\u00a0 Social Security is a \u2018pay-as-you-go\u2019 system since current benefits are paid with current taxes.\u00a0 A longer life span increases the years when benefits are paid \u2013 and the costs.\u00a0 It was recently announced future Social Security benefits will have to be reduced in a little over a decade because of inadequate funding.\u00a0 Analyses of government pension plans show many are poorly funded.\u00a0 The money needed to fund benefits limits agency investments in staffing and training.<\/p>\n
An added problem is the impact of ageism \u2013 biased or prejudiced views of older workers. Its effectively a global reality that impacts the working lives of older workers.\u00a0 It\u2019s been the subject of strongly worded, critical statements by the United Nations, the World Economic Forum (WEF), and the Organization for Economic Cooperation and Development (OECD) in Paris.\u00a0 It contributes to harassment and lack of support for older workers.\u00a0 A recent headline captured the problem, \u201cOlder workers seen as costly and unproductive in the workplace.\u201d<\/p>\n
Going forward, the demographic trends \u2013 fertility and longevity \u2013 will exacerbate the vacancy problem and drive up payroll costs.\u00a0 Retiree benefits have to be funded.\u00a0 Businesses have the advantage that they can hike prices (to some degree) to absorb increased payroll costs.\u00a0 But it\u2019s not strictly a numbers problem. Contrary to the stereotypes, studies show the experience and work ethic of retiring workers makes them more productive than their replacements.\u00a0 When a worker\u2019s value depends on what they know, the common image of older workers is clearly not valid.\u00a0 Those old \u2018strong back\u2019 jobs have largely disappeared.\u00a0<\/p>\n
In the private sector, the competition for qualified applicants is driving up salaries. BLS recently reported private sector employee compensation increased 5.5% over the past year. \u00a0High demand jobs command larger increases. The increase for public employees was 3.4%.\u00a0 Across-the-board increases are outdated.<\/p>\n
Private sector employers have considerably greater flexibility to respond to competitor pay increases. In recent months the hike in inflation is another factor pressuring businesses to offer higher starting wages and other perks. The implications for public employers are obvious.<\/p>\n
Surveys show pay is often not the highest priority for many job applicants but that is when the difference in competing salary offers are minor.\u00a0\u00a0 Everyone, old and young, wants to be paid fairly.\u00a0 The DEI movement and calls for pay equity have made that a hot-button issue.\u00a0<\/p>\n
(Note: Comparisons of public and private sector total compensation consistently show public employers commit a far larger percentage of the total to benefits.\u00a0 That basic conclusion is accurate, but the dollars or percentages shown in the comparisons are highly dependent on core assumptions.\u00a0 The basic policy point is valid \u2013 committing budget dollars to benefits means fewer dollars are available for cash compensation.)<\/p>\n
This \u201cnew normal\u201d work environment is forcing all employers to rethink employment policies and practices.<\/p>\n
[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.16″ background_color=”#f7f7f4″ custom_margin=”-641px|||||” custom_padding=”0px||0px|||” global_colors_info=”{}”][\/et_pb_section][et_pb_section fb_built=”1″ admin_label=”Section” _builder_version=”4.16″ custom_padding=”0px||0px|” global_colors_info=”{}”][et_pb_row column_structure=”2_3,1_3″ use_custom_gutter=”on” gutter_width=”1″ make_equal=”on” column_padding_mobile=”on” module_class=” et_pb_row_fullwidth” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” width_tablet=”100%” width_phone=”” width_last_edited=”on|desktop” max_width=”100%” max_width_tablet=”100%” max_width_phone=”” max_width_last_edited=”on|desktop” custom_padding=”0px||0px|” make_fullwidth=”on” custom_width_px=”680px” global_colors_info=”{}”][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/www.careersingovernment.com\/tools\/wp-content\/uploads\/2022\/08\/2-1.jpeg” title_text=”Future,Evolution,Change,Of,Human,Resources,Employee,Work,Labor,Recruitment” show_bottom_space=”off” force_fullwidth=”on” align_tablet=”center” align_phone=”” align_last_edited=”on|desktop” _builder_version=”4.17.3″ custom_margin=”-1px|||||” animation=”off” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.16″ background_color=”#efefe9″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/www.careersingovernment.com\/tools\/wp-content\/uploads\/2022\/08\/3-1.jpeg” alt=”video presentation” title_text=”Business,Network,Concept.,Human,Resources.,Group,Of,Businesspeople.,Management,Strategy.” show_bottom_space=”off” force_fullwidth=”on” align_tablet=”center” align_phone=”” align_last_edited=”on|desktop” _builder_version=”4.17.3″ animation=”off” global_colors_info=”{}”][\/et_pb_image][et_pb_text disabled_on=”off|off|” _builder_version=”4.17.3″ text_font=”PT Serif||||” text_text_color=”#818178″ text_font_size=”24″ text_line_height=”1.4em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” module_alignment=”center” custom_margin=”5.7%|10%||10%||” custom_margin_tablet=”|10%||10%” custom_margin_phone=”” custom_margin_last_edited=”on|desktop” text_font_size_tablet=”” text_font_size_phone=”” text_font_size_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n
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The COVID-19 crisis triggered profound changes in workforce management as well as the working lives and plans of workers in every sector.\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
[\/et_pb_text][et_pb_text _builder_version=”4.16″ text_font=”PT Sans|on|||” text_text_color=”#888888″ text_font_size=”12″ text_letter_spacing=”2px” text_line_height=”1.2em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” module_alignment=”center” custom_margin=”20px||20%|” custom_margin_tablet=”20px|||” custom_margin_phone=”” custom_margin_last_edited=”on|tablet” global_colors_info=”{}”]HOWARD RISHER[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row use_custom_gutter=”on” gutter_width=”4″ column_padding_mobile=”on” custom_padding_last_edited=”on|tablet” admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” max_width=”1200px” custom_padding=”0px||0px|” custom_padding_tablet=”0px|||” custom_padding_phone=”” use_custom_width=”on” custom_width_px=”1200px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.17.3″ text_font=”PT Serif||||” text_text_color=”#363636″ text_font_size=”20″ text_line_height=”1.4em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”19px||0px|||” custom_margin_tablet=”40px||0px|” custom_margin_phone=”” custom_margin_last_edited=”on|tablet” hover_enabled=”0″ text_font_size_tablet=”” text_font_size_phone=”” text_font_size_last_edited=”on|tablet” global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n
Turning to Older Workers<\/h4>\n
When employment statistics show \u2018everyone who wants a job has a job\u2019, the talent available for filling those 5 million vacant jobs is limited to two possibilities: new immigrants or enticing retired workers to \u2018unretire.\u2019\u00a0 In today\u2019s political climate, new immigrants are not a timely or feasible answer.<\/p>\n
Prior to the COVID crisis, there was a trend for older workers to work into their late 60 and 70s.\u00a0 When the pandemic started and companies were laying workers off, there were reports older workers were being encouraged or forced to retire.\u00a0 A number of studies document the work experience of older workers is commonly affected by ageism and age discrimination.<\/p>\n
Older workers in far too many workplaces have had to endure those age-related jokes or subtle comments.\u00a0 More research would be helpful but there is evidence ageist behaviors are part of a broader and unfortunately common problem, toxic workplaces.\u00a0 Age discrimination is an added problem that can take many forms (e.g., excluding older workers from training, promoting less qualfied younger workers) but is hard to prove in court.<\/p>\n
A massive analysis of workplace data based primarily on jobs and employee comments posted on Glassdoor, found the primary reason employees resigned was:<\/p>\n
\u201cA toxic corporate culture is by far the strongest predictor of industry-adjusted attrition and is 10 times more important than compensation in predicting turnover.\u201d<\/p>\n
That was followed by job insecurity, high levels of innovation [i.e., rate of change] and \u201cfailure to recognize performance.\u201d\u00a0 The latter is a warning for public employers.\u00a0 Employers with the highest attrition failed \u201cto distinguish between high performers and laggards when it comes to recognition and rewards.\u201d<\/p>\n
The study did not focus on older workers but the cost \u2013 and it is a cost \u2013 of ignoring a toxic work environment is high.\u00a0 For older workers that\u2019s ageist comments, exclusion from training and meetings, failure to show respect, pressure to retire, etc.\u00a0 \u00a0The months working at home made older workers more fully realize their lives would be better if they resigned.\u00a0 Older workers dominated the \u2018quits\u2019 in late 2021.<\/p>\n
Forcing or encouraging older workers to retire has been a problem for years. It could be that millions were pressured to retire over the years.\u00a0 Toxic work environments are far too common, and the experience often causes workers at all ages to resign. \u00a0The resignations peaked in the last half of 2021, a time when investment returns and home values made older workers feel they could afford to retire.<\/p>\n
Now they could be the solution to the vacancy problem.\u00a0 Stock prices have declined, inflation has been surging, and employers are hiring.\u00a0 The early data show retirees are \u2018unretiring.\u2019\u00a0 But \u2013 and this is important \u2013 if they return to the same toxic environment, they are likely to quit again as soon as they can afford it.<\/p>\n
Older Workers Want To Work<\/h4>\n
Prior to COVID, surveys found 68% of Baby Boomers expected to or were already working beyond age 65.\u00a0 The reasons cited for deferring retirement, ranked by importance, are: Staying mentally active, Staying physically active, Being productive and useful, Do something interesting.\u00a0 On the list, \u201cneed money\u201d was #8.\u00a0 A similar survey found maintaining an established lifestyle is a priority.\u00a0 \u201cPurpose\u201d has become a buzzword.<\/p>\n
A more recent study, the 2022 Schroders US Retirement Survey, reports that only 22% of people approaching retirement age believe that they\u2019ll have enough money to maintain a comfortable standard of living. \u201cOnly 1 out of every 5 are prepared for retirement.\u201d \u00a0They apparently understand their invested funds may have to last 20 years or more.<\/p>\n
The flipside is the value of older workers to their organizations.\u00a0 Studies confirm older workers — in those increasingly important jobs where knowledge and skills are important —\u00a0 have proven to be better, more dependable performers.\u00a0 Their experience gives them a better understanding of how to tackle new problems.\u00a0 They are also better working remotely, with minimal supervision.\u00a0 That\u2019s been documented.<\/p>\n
It\u2019s important to keep in mind that many elected and appointed officials work well beyond age 65.\u00a0 There are also thousands of physicians, lawyers, judges, academics who are productive into their 70s.<\/p>\n
A survey from shortly before the 2008-9 recession compared the attitudes of older workers with a group early in their careers.\u00a0 It found they are more loyal to their employers, have a higher work ethic, are more reliable, and have lower turnover rates.\u00a0 They take pride in their employer\u2019s success.<\/p>\n
An added issue is that older workers are no longer focused on building careers. Many want a \u201cbridge\u201d job to provide additional income until they decide to stop working. \u00a0A key to retaining or attracting many older workers is flexibility \u2013 shorter workweeks or fewer days, working at home, time off to care for a family member, time to volunteer.\u00a0 Unfortunately, far too few employers provide those opportunities.<\/p>\n
Changing the Work Environment is the Key<\/h4>\n
Older workers want their employers to be successful, that helps them feel valuable in their local communities.\u00a0 They are well aware of the problems that undermine their performance and that of their colleagues.\u00a0 They are by far the best resource to improve the work experience for everyone.<\/p>\n
A recent McKinsey column emphasized the importance of simply asking employees for help.\u00a0 \u201cBy not understanding what their employees are running from, and what they might gravitate to, company leaders are putting their very businesses at risk.\u201d<\/em><\/p>\nEmployee surveys and focus group discussions occur regularly in many organizations.\u00a0 Employees value the respect it shows for their opinions.\u00a0 Here group discussions should include all age groups.\u00a0 Since changes in work management practices will have to be accepted by management \u2013 and managers, it may be important to rely on outsiders to gather and present the information.<\/p>\n
There is effectively a universal practice in higher education to rely on employee teams to plan and implement new policies.\u00a0 Its basic in their collegial cultures.\u00a0 The team members take their work seriously \u2013 their co-workers will have to live with the changes.\u00a0 They also understand the importance of keeping their co-workers informed.\u00a0 Again, experienced outsiders could be valuable in providing guidance.<\/p>\n
This is a very different strategy than the traditional top down, \u201cdo what you\u2019re told\u201d approach to management.\u00a0 But then that approach to management created the problems that triggered support for the Diversity, Equity and Inclusion (DEI) movement. \u00a0Those leaders also focus on the need for change.\u00a0 It\u2019s often forgotten but half the older workers are women and minorities.\u00a0 A \u201dnew normal\u2019 is badly needed.<\/p>\n
Howard is the author of the forthcoming book –\u00a0\u00a0Wanted and Needed: Older Workers<\/p>\n
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