Oregon industries brace for the loss of the aging boomers and their experience.
By Jon Bell
From where he sits as vice president of Hoffman Construction, Bart Eberwein sees a good amount of gray hair peppering his workforce.
The Portland general contracting firm has about 500 salaried staff members, many of whom work in Hoffman’s offices, and from 1,200 to 1,500 hourly construction workers who are employed through subcontractors and union halls depending on how much work is going on. Eberwein says just looking at a job site often reveals the advanced age range of workers, but he also seems to know an inordinate number of construction superintendents who’ve got not only graying pates, but also shiny new motorcycles sitting at home just waiting for their owners to hurry up and retire.
You can’t miss that “the people who are putting together the buildings on our sites are nearing retirement,” says Eberwein. “We’ve got an awful lot of gray beards out there but not a ton of kids wanting to get into this field.”
Beyond construction, the workforce in general is showing its age, both nationally and in Oregon. According to the U.S. Census Bureau, 16% of Oregon’s workers — more than 254,000 out of 1.6 million — are 55 years or older. And that percentage will continue to rise as more of the state’s baby boomers head into their golden years and approach age 65. The first boomers to reach that magic number will do so in 2011, just four years away.
With age and that increase in retirements will come new and various strains on the labor market — everything from worker shortages to increased health-care costs. Some industries, such as health care, stand to be dinged sharply by the effects of age; however, many others, such as education, high tech and construction, may feel the impacts but only in combination with other, more pressing workforce ailments.
A June report by the Oregon Employment Department titled Will Oregon Have Enough Workers? examined such trends as baby-boom retirements and economic growth.
Economic forecasts in the report predict a job growth rate of about 1.2% to 1.8% a year through 2013. In addition, between 2004 and 2014, OED is anticipating about 245,000 job openings as a result of economic growth and nearly 500,000 additional replacement openings because of workers leaving their jobs, mostly through retirements or a change in occupation.
Most of those retirements will involve baby boomers, and many will affect industries that currently have a high percentage of workers age 55 and older. The three industries with the greatest percentages of those workers are mining, utilities and educational services. Others with high proportions of older workers include health care, construction, transportation and agriculture.
Geography affects employment age concentrations as well. For example, while 16% of workers in Multnomah County are 55 or older, in rural Wheeler County, it’s 25%.
Mass retirements of these aging workers could trigger labor shortages, premature promotions for younger, less experienced workers and a disappearance of institutional knowledge.
“There are a number of industries that are very concerned about brain drain,” says Jay Bloom, director of Multnomah County’s Task Force on Vital Aging. “They’re very concerned about knowledge going out the door, particularly in health care and in governmental jobs at all levels.”
In addition, companies could be forced to import labor from elsewhere or, more direly, pull up their stakes and head for greener pastures with larger labor pools.
BUT SUCH WORST-CASE SCENARIOS aren’t necessarily at the top of the list when it comes to individual industries’ or sectors’ responses to an aging workforce. Instead, many are taking a measured, long-term approach and factoring age alongside other workforce concerns.
“We haven’t specifically targeted the aging workforce yet,” says Agnes Balassa, executive director of the Enterprise for Employment and Education, a public-private partnership board that assesses workforce needs in Marion, Polk and Yamhill counties. “It’s on our shortlist of issues to be looked at, but I think Oregon’s problem isn’t as severe as it is in some places.”
“I know it’s something that’s just very slowly and steadily creeping up on us,” says Bruce Pokarney, spokesman for the Oregon Department of Agriculture. “But we’re not doing much on it except trying to promote agriculture and economic development around it.”
In Oregon, according to Pokarney, the average age of a farm operator is 54.9 years, and nearly 30% of all farm operators are 65 or older. Yet the bigger concern is not that so many farmers are older but that there aren’t enough younger ones coming on board to take their place.
“It’s just gotten to be a situation where it’s difficult to pass a farm on to younger operators, or the kids aren’t interested,” Pokarney says.
Construction, too, has seen its workforce well dry up, not only as its workers have aged but with the whittling down of high school vocational classes as well. Dan Graham, president of the Northwest College of Construction, says the average age of skilled construction workers is 48 and that roughly 50% of the construction workforce is expected to retire in the next 10 years.
“What we’re seeing is a mass exodus,” he says, “and just to keep up with the replacement needs is huge. We really just need more folks in the pipeline.”
Not having enough workers, he adds, already has rendered some contractors unable to bid on projects. That in turn can lead to higher prices by reducing competition. It also could result in projects simply not being built.
“Absolutely it will impact the economy,” Graham says.
Third-highest on the OED’s list of employment areas with the most older workers is education. Patrick Burk, chief policy officer for the Oregon Department of Education, says the average age of Oregon teachers is 44, but there are also “large clusters of people around their mid 50s, which puts them around retirement age.”
Like construction, though, education’s main concern is more about the people coming in than those who are leaving. In fact, not too long ago during tight education funding, school districts across the state actively encouraged their older workers to retire to help save money.
Consider also that, while roughly 800 teachers retired in 2006, the Teacher Standards and Practices Commission of Oregon issues anywhere between 1,200 and 1,500 new licenses a year.
“We can keep up with the retirement rate,” says Burk, “but there’s a more significant issue; young teachers leaving the profession.”
According to Burk, nearly 37% of new teachers in Oregon leave the profession within the first five years. Couple that with retirements, and “that’s what’s driving our needs,” he says.
ANOTHER ASPECT OF THE AGING workforce issue comes from the older workers themselves, many of whom want to — or have to — work longer than previous generations.
Bloom cites studies done by Merrill Lynch that show that 60%-80% of older workers want to work past age 60. They also want more flexible hours, higher wages, opportunities to telecommute and phased retirements.
But maintaining a multigenerational workforce full of differing communication skills, work ethics and career expectations embodies its own set of challenges.
“We’re concerned not just about the aging workforce,” says Steve Sechrist, spokesman for Northwest Natural Gas Co., “but an interesting issue is the younger workforce and the older workforce in the same company and how the cultures of those two are different.”
To help address not only the age factor but also other issues affecting the workforce, many Oregon industries and companies have already launched significant workforce initiatives.
At Intel, for example, the state’s largest private employer, spokesman B`ill McKenzie says that in an effort to help fill a pool of future workers, the company supports educational programs in math and science that begin as early as elementary school. As its workforce of more than 15,000 ages, McKenzie says Intel will look to recruit from a younger, more diverse population.
In addition, the chip manufacturer, recognizing that older employees often have older family members to care for, has begun to offer informational resources to workers.
“Eldercare is rapidly becoming one of the more important work/life concerns of our employees,” he says.
Graham says NWCC was founded last year as one way to add new workers to the construction pipeline to help brace against the departure of older workers. Eberwein says unions in Oregon have been good about offering apprenticeship training and industrywide efforts, such as the workforce nonprofit Construction Apprenticeship & Workforce Solutions, aimed at grooming a new generation of workers.
Legislative efforts to raise the tax exemption rate on estates, which proponents say could make it easier to keep family farms intact and encourage younger workers to take over the business, didn’t move ahead this past session. But Pokarney says younger populations who may have initially struck out on a non-agricultural path often return to farming, bolstering overall workforce numbers.
And in education, some districts offer job-sharing opportunities for teachers who may be considering retirement but are not yet ready to quit for good. Others hire older, more experienced and often retired teachers as permanent substitutes as a way to retain institutional knowledge and provide mentoring opportunities for younger teachers.
Also, the Legislature approved $5 million to fund mentoring programs so older teachers can help younger ones learn the ropes.
“It’s a beginning,” says Courtney Vanderstek, assistant executive director of the Oregon Education Association. “And maybe now that we’re not worrying about shutting down schools, we can start having conversations about using the strengths and skills of our more experienced workers to add values to the system.”
Jon Bell is a Portland-based business journalist.
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