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October 15, 2007
Bill Peaster is 74, but he doesn't plan on giving up the job he's held for the last 20 years any time soon.
"Some people can't wait until they turn 65 so they can retire," he said, shaking his head. "What they don't think about is that not doing anything affects them mentally and physically, and some who retire don't last too long afterward."
Peaster, who lives in Concord, works in Laconia as a quality-control engineer in the Astro Division of New Hampshire Ball Bearings Inc. He said he still works full time partly for financial reasons, but also because he enjoys his job's daily challenges and advising up-and-coming employees.
Businesses likely will employ increasing numbers of people like Peaster in the coming years, national demographic and workforce data shows — a trend that can be both a boon and a bane to employers.
According to U.S. Census figures, the percentage of the country's population age 65 and older is projected to rise from the 12.4 percent it was in 2000 to 19.6 percent in 2030, with increases continuing through 2050.
The U.S. Bureau of Labor Statistics estimates the number of workers 55 and older will increase by 50 percent between 2002 and 2012. By 2012, workers 55 and older will make up about 20 percent of the nation's workforce, the bureau says.
While the experience and work ethic of older employees is valuable to employers, employers also are increasingly concerned about the cost of providing benefits to such employees, experts say.
According to the 2005-2006 MetLife Employee Benefits Trend Study, 81 percent of senior managers ranked health care costs as their top concern.
The study, conducted in late 2005, consists of two national surveys. One polls employees; the other polls employers. The employee survey polled 885 full-time and 328 part-time workers, while the employer survey polled 1,514 executives specializing in human resources and benefits.
Health insurance costs greatly affect a firms' employment decisions, according to Joanna Lahey, an economics professor at Texas A&M University, who recently has written on the topic for Boston College's Center on Aging and Work.
"Firms that offer health insurance hire older employees less frequently," she wrote in June in a document titled "Does Health Insurance Affect the Employment of Older Workers?"
Not all experts agree, however. Chris Dugan, spokesperson for Anthem Health Plans in New Hampshire said health insurance costs do not necessarily increase with age.
The general health of an employee and the amount of money an employer contributes to a plan matter more than age in determining overall costs, Dugan said.
Employer concern over the cost of providing benefits for older employees also varies by state because of insurance laws differ, said Molly Brogan, spokeswoman for the National Small Business Association, an advocacy group based in Washington, D.C.
In some states, she said, insurance companies are allowed to charge higher or lower rates based on age or can increase or decrease a basic premium rate based on an insured person's age.
Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University in New Jersey, cowrote a 2005 report titled "A Work-Filled Retirement: Workers Changing Views on Employment and Leisure."
It was based on the results of a survey of 800 people the Heldrich Center conducted between May and June of 2005.
Based on the results, he estimated about 7 in 10 Americans plan to continue working past the traditional retirement age of 65.
What this means for employers, he said in a telephone interview, is that they must adapt their policies to accommodate an aging workforce.
"Employers need to start thinking about different strategies for retaining older workers," he said, adding that one strategy is a phased retirement in which an older worker gradually has his or her hours reduced.
"It's a way to retain the employees' knowledge and experience instead of shoving them out the door," he said.
It's true it generally costs employers more to provide health care for a middle-aged to older employee, he said, but added that after age 65, workers will be eligible for Medicare, which will make the company health plan a secondary provider, cutting the employer's cost.
Older employees are also less likely to have young children in the home needing to be covered by the company health plan, he said.
One reason employers might be reluctant to keep or hire older employees is that their experience means they'll usually garner a higher wage. But it also costs money to continually train inexperienced workers who may leave for another job after training, Van Horn said.
About 58 percent of New Hampshire's workforce is age 45 or older, said Kelly Clark, AARP New Hampshire's director.
The organization has suggestions to help employers meet the needs of this growing segment of the workforce, including offering more flexible schedules, providing updated training and using retired workers as consultants, Clark said.
If employers don't start planning for an older workforce and implement ways to recruit and retain those workers, "they will loose their competitive edge," said Jamie Bulen, an AARP New Hampshire spokeswoman.
The average employee age at the Astro Division of NH Ball Bearings Inc. in Laconia is 44, said Gary Groleau, the division's human relations director.
Employers are facing a two-fold problem, he said.
"Our workforce is becoming a constricted labor pool," he said. "Younger workers are leaving the state, while simultaneously, employees are retiring."
He said while he's noticed people are opting to stay in the workforce longer, companies will have to work harder to balance between older, experienced employees and hiring younger workers.
Retiring workers aren't being replaced by the same number of younger workers, so the company in some cases has asked workers to come out of retirement to help fill gaps or train new workers, Groleau said.
There are many advantages to retaining or hiring older workers, not the least of which is their work ethic, he said.
"They tend to have high attendance, few personal problems are self motivated and can work without supervision," he said. "They make great role models for younger workers."
The company has applied for and received state and federal grants specifically for training for workers who are 55 and older, Groleau said.
The company has not changed its benefits package as a result of the increase in older workers. He added that health insurance and 401 (k) costs don't increase dramatically based on employee ages.
"Benefits are what they are; they are the same for everyone," Groleau said.