Home >> Inside MHEDA >> Ask The Board >> Aging Workforce

Aging Workforce

“A topic we are facing at our company is an aging workforce. We’ve seen a trend emerge that people are finding they want (or need) to work longer in their careers. We’re finding that isn’t always a good thing. Has anybody else noticed this trend and, if so, how are you dealing with it at your company?”
– Will Egerton, VP Operations, Wecon Systems, Ontario, Canada  

Jerry Weidmann,
President
Wisconsin Lift Truck Corp., Brookfield, WI
Asked-Answered1The average age of our workforce is 48 years old. Almost 25 percent of our staff is over 55 years of age. Our approach to managing the aging workforce includes the following elements:
I. Identification. Our HR department updates a succession planning list of our workforce annually. Managers are provided an updated list of their staff over the age of 55.
2. Discussion. As part of the annual review process our managers are encouraged to understand the career plans for all employees. We generally know what each individual’s plans are regarding retirement well in advance of their actual planned retirement date.
3. Strategies/ Alternatives.
a. A transition plan is developed for any of our employees who advise us of their planned retirement date. Our goal is to transfer knowledge to the person taking over the retiree’s position.
b. Depending on the position, we may be able to offer part-time work or flexible hours for individuals who do not wish to fully retire. But this decision is made by each manager for their department.

It is our belief that all employees, regardless of age, be required to perform all normal functions of their job. If we have computer systems that support their position, we expect them to understand the computer technology. If we introduce new technologies or the technology in their position changes, we expect every employee to adapt. If someone needs training, we provide training.

It is our view that years of service and age do not pro• vide an entitlement. Everyone is expected to fulfill the requirements of their job. In the event someone does not wish to stay up to date or perform what is required, we will meet with them to determine if there are other alternatives that will work for them and the company. It may involve going part time, retiring, or taking a different position. In all cases our expectations of performance are not compromised.

Richard Donnelly,
EVP
Gregory Poole Equipment Company, Raleigh, NC
I agree there is a growing trend that individuals are finding that they want (or need) to work longer in their careers. Some of our long-term workers are continuing to do their job very well and we do not want them to retire. It would be very difficult to replace the knowledge they have gained through the years. Others are just coasting until they retire and we would like for them to retire. Two ways we have addressed this issue is that we have periodically offered an “Early Out” and a “Phased Retirement” plan. If you are at minimum age and service with the company, you would qualify for the “Early Out” plan. The key conditions of the plan are a retirement bonus and extended insurance coverage. Our success with this plan has been very good with employees who qualify and would like to retire, and we want them to retire. Employees who qualify and are not sure if they want to retire, but would like to work less hours and the company does not want them to retire, are offered the “Phased Retirement.” This allows employees to receive the benefits of the “Early Out” plan and move into a temporary assignment working about two to three days a week. Their compensation would be adjusted, and they would qualify for the extended insurance coverage of the “Early Out” plan. A major benefit to this plan is the retiree is available to perform certain tasks and share knowledge with their replacement. It is a win-win for the company and employee.

Chuck Frank,
President
AHS, Inc., Cincinnati, OH
Great question. We were faced with this issue a few years back. At the time, we spent time studying our demographics, knowledge, salaries, short and long term goals, client needs and expectations. Our conclusion was our younger team members with less experience should be able to learn and apply what our tenured work force was doing. What we learned is they were able to do some things, working with our business partners, creating AutoCAD layouts, putting together some of the estimates. What we did not take into consideration was the amount of time our tenured team members spent in the field, all the little things that surfaced during install, the questions raised by our installers, how to evaluate a layout, think through the process flow, and value engineer the solution . Lesson learned – our appreciation for the knowledge-based/aging workforce is critical to the ongoing success of our business. We have added this knowledge to our strategic planning process, spending time with these team members, better understanding their goals, working with them on their own strategic thoughts about retirement, travel, preferred projects, and how they can assist in mentoring our younger workforce. We inform them when we hire a younger team member that we want them to mentor this person and prepare them to take over their role. At first, we were unsure to how the aging workforce would react, but, to date, it has worked well. For the most part, the aging workforce understands the day will come for someone to replace them. They remember when tl1ey were given a chance to make a difference, and most can tell you who their mentor was. Part of their goals prior to retiring is to give back to others what others have given them. A blend of the old and new generation is a great complement to what we do. We find that our younger workforce reenergizes and in a good way motivates the older work force. The old saying “you cannot teach an old dog new tricks” does not always apply. In our case, it just takes a little longer to get the aging team member to adapt and implement some of the tools and technology used by the younger work force.

Bill Ryan,
President
LiftOne LLC, Charlotte, NC
Here are a few things we’ve learned at LiftOne:

It seems our industry and our company find ourselves at a crossroads. On one hand, we can’t seem to attract enough new talent to the industry. On the other hand, many of the older folks who have been with us for a while now would like to work a little longer than their career paths might have had them doing just a few years ago. Some of the implications of this situation are obvious and others are not. We assumed some things that just turned out not to be true.

It was easy for us to assume, for example, that our older employees do not possess the same levels of energy as younger people. This is, as most of us know, a vast oversimplification based upon age assumptions and not on individual assessments. Adults in the U.S., in many respects, are in much better physical shape now than at any time in our short history. How often have you heard someone say, “50 is the new 40!”

We also had a pre-disposition that older people are less “tech-savvy” than the younger crowd. Kids today are growing up on smartphones and such devices, but look at how many grandparents have learned how to video-connect with their grandchildren. We reminded ourselves the Baby Boomers of today came up through all kinds of changes in technology during their lives and careers, from snail mail to fax machines, to PCs to cell phones to voice commands. High-tech Machine technology has more than kept pace with communications, and the grey hairs have made this all happen. Demand flow technology and lean – these are not inventions of the recent generations. Instead, these are some of the conventions and outgrowths of necessity that our fathers and mothers had to adopt in order to survive the economic downturns of the 70s and the booms and busts of the 80s.

So we are planning for the future, recruiting new talent and making plans with and for our retiring employees to help us hire and train those recruits. But, before we jumped to conclusions that age of and by itself somehow has implications as to a person’s capabilities, we needed to think again. We are all the same – we are all different. We have been reminding ourselves to treat individuals as individuals and invite all of our problem solvers to work on the solutions.

A smart man once said: “You can pass along knowledge but you can’t pass along wisdom; there is only one way to earn that and it is through experience.”

Al Boston,
CEO
AK Material Handling Systems, Maple Grove, MN
The world has certainly changed from early retirement not too many years ago to people needing to work past 65. Our company has had people work past 70 and, depending on the job description, they have only had to adjust to less strenuous activities for safety reasons. I feel that in our case we have defined the job position and expectations of our aging workers and have resulted with buy-in from both the older and younger team members. We have adjusted job descriptions to play the strengths and limit the weaknesses.

I know this is not going to work in all cases, but training to new technology and the ability to prove proficiency is essential. Everyone, regardless of age, has a list of strengths and weaknesses. The no. 1 attribute we need is a positive attitude. If anyone on our staff displays this, we will make any position work no matter what. We currently have a warehouse person who is 71 with more than 22 years with the company working two days a week.

Buddy Smith,
CEO
Carolina Material Handling Services, Inc., Columbia, SC
One of the things we try to emphasize in our marketing messages to prospects is the experience and stability of our workforce. While there could be concerns with an aging workforce, I believe the benefits of experience outweigh the costs. Another factor that helps with this issue is growth. As a company grows and stays committed to growth, the diversity of the employee base also grows.

Doug Carson,
VP
Marketing & Sales Fallsway Equipment Company, Akron, OH
Here at Fallsway we’ve been fortunate to have long-tenured associates that have been largely responsible for our success over the years. We put a focus on our associate’s career timing objectives at two distinct points every year: I) during the employee’s annual review, which takes place on their employment anniversary date and 2) during our strategic planning sessions at year end. During the annual review we discuss the employee’s intention for continued work, and we hope to target their date for retirement at least five years out so we and they can begin planning. During our strategic planning sessions each department highlights their particular talent gaps that may present themselves on our planning horizon. We then put in place a replacement plan and reinforce the employee’s intended retirement time through conversations and training of replacements with knowledge by all personnel of our succession plans.

There are times when employees want to stay engaged with the company and still have a good deal to offer, but perhaps they don’t wish to put forth the effort required for full-time employment. We have been willing to work with these associates and place them in positions that help the company while scaling back their responsibilities and pay, but still meet both parties’ goals. We have a great example right now of an ex-technician in his early 70’s who retired from the technician crew a number of years back. He now works around (our hours a day delivering parts and other products and generally helping out where needed around our facility. We couldn’t ask for a better person to engage our customers he knows the customer base and their practices and has been a conscientious employee for decades as a Fallsway associate.

Mike Vaughan,
CFO
Liftech Equipment Companies, Inc. East Syracuse, NY
I do believe the issue of an aging workforce is a common reality for most of us. The primary earning years have stretched from the 50s to the 60s and retirement plans are extended. I think the challenge is more difficult for privately held businesses that are more emotionally attached to employees who have been loyal to the company. To avoid those very difficult emotional decisions an employer must be very clear on performance expectations for the future and how actions taken must change and evolve to achieve growth, efficiencies and increased performance. Often times it is the employee who then decides that it’s time to do something different as they realize that the game changed and they don’t want to play anymore. My experience has been that the employee feels the same sense of responsibility to perform as the employer feels loyal. And when that isn’t the case, with defined expectations and a solid employee review process, the employer is positioned to end the relationship and make change when performance isn’t where it needs to be.

Daryle Ogburn,
President
Advanced Equipment Company, Charlotte, NC
You ask a very relevant question that 1 am sure is on the minds of many MHEDA member companies. Four of our team members are 65 or over and so far we have not encountered any specific performance issues, but I know with the fast and ever-changing business environment in which we work, performance issues are coming. The greater issue can be that you have older members of your team that are blocking your ability to put younger employees in place who have higher growth potential. Knowing the “family culture” of our company we will take it somewhat slow and make changes as we can without disrupting our team. One first step for us is to put one of our younger sales team members working with one of our more experienced sales team members on larger projects to the benefit of all. In one sales territory we plan to add a new younger employee while allowing the experienced salesman to hold on to his key accounts in the territory for the immediate future. We also plan, in the near future, to add a new younger employee to our inside team to start learning our system. You can make these types of changes if the economy continues to grow and increased sales support the additional employees you are bringing on board. I know management programs say “get the right people on the bus and get the wrong people off the bus,” but I believe we must take a thoughtful approach when making changes to our team. Our employees are our most important asset.

Mike Wall,
President
Container Systems, Inc. Westmont, IL
In our span of more than 40 years this has come up a number of times. We recognize it’s natural that as people age, they slow down. They may not want to work as hard or they may not need as much money as they used to, but they still want to work. This can put the employee and the company at cross purposes. Although it sounds trite, the key is to communicate with them. Ask them direct questions like:
• Do you want to work as hard/ as many hours?
• Would you be open to retaining a few key customers or relinquishing some of your sales territory?
• How would you suggest we make this work for both of us?

If you’re running a larger company, you might consider moving the person to a less demanding position. In a small company that’s harder to do, of course.

With an aging workforce this is inevitable, but the key is to have a good age spread in your business so at the very least it doesn’t happen all at once.