Are ‘mature’ feds the answer?

Evidence from a yearlong study of the U.S. workforce points to one conclusion: Federal managers are making a big mistake when they encourage employees 55 and older to retire early.

The results of that study appear in a new book, “Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent,” by Ken Dychtwald, Tamara Erickson and Robert Morison (April 2006, Harvard Business School Press).

The book advises managers on how to avoid a brain drain that could threaten the ability of federal agencies and corporations to perform their work.

Military and law enforcement agencies’ retirement rules inadvertently institutionalized a brain drain, the authors argue. Military employees, for example, are eligible for retirement benefits after as few as 20 years of service. Meanwhile, because FBI agents must retire at age 57, 40 percent of agents have less than five years’ experience. The FBI has turned to recruiting retired agents as analysts to fill positions and perform new intelligence responsibilities that it acquired after the 2001 terrorist attacks.

Three factors that the authors refer to as the baby boom, the longevity boom and the birth dearth have created a rapidly growing older population and shrinking younger workforce in the United States. A few statistics illustrate the problem. The workforce of 25- to 34-year-olds is growing by only 8 percent a year, while the number of workers aged 35 to 44 is declining by 10 percent a year. The greatest growth — at 52 percent — is among 55- to 64-year-olds. The number of workers 65 and older is growing 30 percent a year.

The lesson for managers in those statistics is that mature workers will soon make up a proportionally larger share of the workforce than they do today. “During the next 15 years, 80 percent of the native-born workforce growth in North America — and even more so in much of Western Europe — will come from those over 50,” Dychtwald, Erickson and Morison wrote.

The authors’ advise managers to accept the demographic reality and to act now. “Employers should be planning to double the proportion of workers 55 and older,” they wrote.

The Employment Policy Foundation, a think tank based in Washington, D.C., predicts a dramatic shortfall of new workers to fill a net 23 million new U.S. jobs in this decade. But the authors of “Workforce Crisis” argue that mitigating factors — such as productivity gains, a net export of jobs, more liberal immigration policies, expanded educational opportunities and higher workforce participation rates — could avert a crisis.

The latest statistics show increasingly higher workforce participation rates among mature workers. For example, workers in the 55-to-64 age range participate at a 60 percent rate, and workers older than 65 at a 13 percent rate. “Both numbers are trending upward,” the authors wrote.

To cope with the workforce crisis, the authors suggest that federal agencies and businesses become more flexible about work arrangements — allowing telework, for example, and offering adaptable learning opportunities and adjustable compensation and benefits.