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Shock Wave in Indiana’s Labor Force

July 30, 2008

By Dana Hunsinger, The Indianapolis Star

Jul. 30–Accountants, teachers and nurses will be in critically short supply in Indiana within five years as waves of baby boomers retire.

Indiana’s work force will suffer from a monumental generational shift that will hit the entire nation by the end of this decade, labor experts say.

The nation’s 76 million boomers, those born during the period from 1946 to 1964, will begin retiring in droves, and only 46 million workers in younger generations will be available to replace them, according to the Bureau of Labor Statistics.

The shift will make the shortage of teachers, accountants, nurses and certain other skilled professionals more acute in Indiana than in much of the rest of the nation because 15 percent or more of workers in those jobs are now ages 55 to 79, according to an ongoing study by the University of Indianapolis.

Exacerbating the situation is a failure by employers to plan for the impending shortages, says the “Gray Matters” study conducted by UIndy’s Center for Aging & Community.

“Indiana is more at risk than the rest of the nation because our work force poses a triple threat,” said Ellen Miller, the center’s executive director.

Three factors make it unlikely that many Hoosier baby boomers headed toward retirement age will stay in the work force and be retrained to work in areas that have severe shortages — something that must happen if the gaps are to be filled, Miller said. Statistics show most older Hoosiers don’t have the skills needed to fill the shortages and aren’t likely to attain them.

–11 percent of Indiana’s 55-plus population holds a bachelor’s degree or higher, ranking 46th in the nation.

–16 percent of the 55-plus population is in a high-skill occupation, ranking 42nd.

–Indiana performs the worst of all states in getting its residents 55 and older back to college, with only 0.3 percent pursuing higher education or advanced training.

“While employers recognize there is an issue, that they need to be thinking about these anticipated shortages of workers or skills, they’re not doing a whole lot about it,” Miller said. “That is a problem because when older workers leave, they take with them a lot of experience and human capital.”

An informal survey by The Indianapolis Star bears out Miller’s assessment. The Star contacted 10 Hoosier companies, some Fortune 500, to find out whether they had done anything to prepare for the loss of boomers in the workplace. All either declined to comment or did not respond to the request.

Miller predicts it won’t necessarily be a loss of bodies that will be felt the most, but a loss of skills that are tough to replace.

Take Kay Rowland, 61. She retired in 2007 from her second-grade teaching job at J.B. Stephens Elementary School in Greenfield, taking with her nearly 24 years of experience. Her husband, Mike, 62, retired from his job as a high school English teacher in 2005 after 36 years as an educator.

The two wanted time to travel to Florida, where their son, daughter-in-law and three grandchildren live.

Kay Rowland said she has concerns about all school systems and the upcoming loss of experienced teachers.

“Yes, there will be a shortage; I believe that,” she said. “A lot of the teachers I personally know are between 50 and 60 years old.”

In the Greenfield school system, an average of six to seven teachers have retired each year since 2006, said Assistant Superintendent Ann Vail. She said she expects a group of teachers to retire every year for the next few years.

But Vail also said she believes the staff represents a “fairly balanced experience distribution” and doesn’t think there will be critical shortages of knowledge.

Businesses that depend on skilled manual laborers such as electricians and plumbers also are expected to be hit hard.

In the heating and air-conditioning industry alone, nearly 40,000 positions opened from 2006 to 2008, according to industry expert Mark Skaer.

“Nothing has been done to face this crisis,” he said. “For whatever reason, young people do not see this industry as the place to go.”

Aaron York, owner of Aaron York’s Quality Air Conditioning in Indianapolis, said young workers see his field as “grease monkey” work and stay away. That’s why he’s concerned about what will happen when boomers retire.

“I have a guy who is 55, and he’s been with us since day one in 1977, and you think I don’t worry about this man retiring?” York said. “I worry every day. How do I replace him?”

The health-care industry is in for a similar crisis. The “Gray Matters” report found shortages among managers in medical and health services and among nursing home aides and home health-care aides.

A whopping 33 percent of boomer nurses plan to retire in the next one to three years, according to a study by Medical News Today. And depending on which source is used, boomers make up anywhere from 40 percent to 60 percent of the nursing work force nationwide. The Bureau of Labor Statistics estimates that by 2020, the nation will have a shortage of up to 1 million nurses.

That is what makes a person such as Maggie Caldwell so valuable. Caldwell, 66, is a surgical nurse at Beltway Surgery Center in Indianapolis, working three 12-hour shifts a week. She will continue to work until age 70. One reason?

“A job is a great hedge against inflation,” she said. Another reason: Her employer is letting her be flexible and slowly cut back her hours over the next three years.

Keeping older workers is important so they can pass their wealth of working knowledge on to the next generation, human resources consultants said.

“Companies have to find a way to capture and retain this knowledge to remain competitive,” said Mark McNulty, president of HR Dimensions in Indianapolis.

Karl Ahlrichs, a partner with ExactHire, said it’s also critical that companies are aware of the ages of their employees across all departments.

“There have been organizations that have done demographic analyses and said,… ‘We have an entire department here that could have a retirement dinner at the same time,’ ” he said.

UIndy’s Miller said doing age audits now and preparing for boomers’ retirement could prevent dire situations for employers in the near future.

“It doesn’t have to be an emergency situation,” Miller said. “We don’t want it to be too late and employers having to say, ‘Gosh. What do we do now?’ “

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Copyright (c) 2008, The Indianapolis Star

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