Employer Interests and the

Aging Workforce
Professor Peter Berg
Michigan State University
School of Human Resources and Labor
Relations
The role of interests in
understanding the effects of
aging

 Individual interests
 Employer interests
 Why should we care about employer interests?
 Employers view the aging workforce as a human
capital management problem
• Focus on the human capital pipeline
Human capital management

 Human capital flows in and out of an

organization and must be balanced to maintain
sufficient quality and quantity of human capital –
this is essential to organizational performance

 The effect of workforce aging on organizations

differs across industries and work processes
Key Issue: Knowledge, Skills,
Abilities, and Other
Characteristics (KSAOs)
 Skill gap assessments
 Training
 Knowledge-transfer practices
 Outflow delaying practices (working longer)
 Inflow increasing practices (hiring)
 Consistent hiring prevents knowledge and skill gaps
 Outflow increasing practices (encourage exit)
Institutional context matters

 Retirement savings system

 DB and DC plans
 Employee voice
 Health insurance system
 Treatment of working time
Skill Gap Assessment

 Supervisors regularly assess how likely it is that

no one will be able to do a particular job
 An 81 point scale indicates the urgency with which
someone must be trained for that position
 Cross training as solution, but depends on
having staffing and skill mix
 We found few firms do comprehensive skill
assessments
Knowledge Transfer Practices

 Mixed experience teams

 Younger workers document tasks
 Intergenerational issues
 Communication
 Understanding
 Difficult when gap between young and older
workers is too large
Outflow Delaying Practices

 Flexible work arrangements

 Shift swap, day-shift only options, 4/10s, flexible
scheduling
 Phased or Partial retirement
 Work restructuring / job engagement
 Mental and physical requirements
 Special projects to utilize knowledge
Phased Retirement

 Significant interest among older workers

 Barriers in the United States
 Options in Germany
 Examples what companies are doing
Inflow and Outflow increasing
Practices

 Hiring to replace skills

 Avoid big gaps in hiring
 Encouraging exits
 Severance
 Partial/phased retirement (date certain)
Implications for older workers

 Employment environment plays an important role

in the aging experience and the individual
decision to work longer or retire
 Employer interests go beyond simply extending
working life
 The skills and availability of younger workers affect
the work experience of older workers
Implications for older workers
 Industry and occupation matters
 Age composition varies across industries
 Perception of aging problem varies within
organizations and across industries
 There is inequality in access to employer
practices
 Professionals and highly skilled have more options
• Retire/rehire; work engagement; healthy work environments
 Employers need help with intergenerational
communication and understanding among
employees
Implications for older workers
 Public policy
 Clarify discrimination laws with respect to practices
aimed at older workers
 Health insurance reform and its impact on working
time
 Encouraging firms to train and invest in older worker
skills or ergonomics
 Greater employee voice can encourage more
variety of practices for older workers across the
skill and occupational spectrum
 Contact Information
Peter Berg: Work (517-432-4771), Mobile (517-775-8361),
bergp@msu.edu

Melanie Zaremba, Communications Director, MSU School of

Human Resources and Labor Relations: 517-353-2222,
mzaremba@msu.edu