This article is reprinted with permission from MaineBiz. Derek Rice, author. First of four parts.
It should come as no surprise to anyone that the current economic climate has created a number of unexpected challenges for employers, employees and job seekers.
Aside from companies’ hesitation to add employees in an economic downturn, perhaps the most visible challenges revolve around Maine’s 55-plus population. According to the Maine Department of Labor’s Local Employment Dynamics Program, the number of workers aged 55 and over has increased in every sector from 2001 to 2009. On the low end of the spectrum is the accommodation and food services sector, which saw an increase of just 1.8% in that time. Leading the way is utilities, with a 12.2% jump.
An unfortunate case of bad timing for Maine’s baby boomer population is the most likely reason behind these increases, says Rick Dacri of human resources consulting firm Dacri & Associates in Kennebunkport. In the last few years, they’ve seen declines — some significant — in both their retirement accounts and home values. Factor in the increased health care older people require, and many are forced to make last-minute changes and re-evaluate their retirement plans.
For those who are approaching retirement age, that may mean staying in a job longer than they intended or returning to the work force to make ends meet. Either scenario, while unavoidable in a downturn, presents Mainers with a unique set of challenges.
When employees stay on longer, that can potentially create problems with advancement, Dacri says.
“Delayed retirement creates significant problems in the workplace,” he says. “It really impacts younger workers, who can’t move upward. Those employees are going to look for another organization where there are more opportunities for advancement.”
However, having older workers stay on longer can also benefit companies. According to the Department of Labor, of the annual average of 704,000 Mainers who participated in the work force in 2009, 159,000 (about 23%) were 55 or older. That means nearly a quarter of the work force is either eligible for retirement today or will be within the next 10 years. With this in mind, employers are aware that they’ll be facing a labor supply issue in the very near future. The longer a retirement-age employee stays on the job, the more time the company has to recruit and train a suitable successor.