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Human Resources

A Change of Course

The aging workforce is an approaching storm for which institutions should be making preparations.
University Business, Mar 2007

We've all heard the news: The American workforce is in trouble.

Baby boomers are retiring in droves and there's not enough skilled talent entering the workforce to replace them. Even the number of high school graduates and enrollments is projected to slowly but steadily decline, despite a record 3.2 million students expected to earn their high school diplomas in 2008-2009, according to the Western Interstate Commission for Higher Education.

The aging workforce is a problem that affects all industries. Some universities and colleges have already begun to feel the pinch and are drawing battle lines for talent. They're updating their HR strategies to hold on to valuable employees while introducing alternative programs that will hopefully serve as employee magnets.

Margaret Morford believes the aging workforce trend will hit universities especially hard. As a management consultant based in Nashville, Tenn., she says the average age of employees at higher education institutions is abnormally high-between 45 and 48-compared to the high 30s range in the private sector. To make matters worse, their HR policies are often outdated and too strict. Many schools, for instance, won't hire experienced business managers or executives who are seeking a second career because they lack advanced degrees.

"The problem is they're so steeped in their culture," Morford says. "It's hard to let go."

Some schools will only change hiring criteria when they start hemorrhaging talent.

At the very least, she says HR can create part-time positions with health benefits, which is the big worker worry these days. According to The New Retirement Survey from Merrill Lynch, which looked at 2,348 U.S. adults ages 40 to 58 in 2004, baby boomers are three times more worried about a major illness (48 percent), their ability to pay for health care (53 percent), or winding up in a nursing home (48 percent) than they are about dying (17 percent).

Morford also suggests designing an intern program for older workers or those seeking a second career to help them test the waters.

But in order to be successful, the hiring criteria would have to change. Morford believes schools are missing huge opportunities to fill their workforce with highly qualified business professionals because they place academic degrees over business experience.

"Universities deal in information and not always knowledge," she says. "They're big on, 'You've got to be published.' Any CEO who runs a company is too busy doing than publishing. Universities are overlooking people who may lack the academic credentials but possess valuable real-world experience."

But age-old traditions are hard to break. She believes some schools will only change their hiring qualifications when they're in a crisis mode, start hemorrhaging talent, and become desperate.

Leaders at the College of Saint Mary in Omaha, Neb., aren't waiting for the inevitable to happen. The college is currently facing talent shortages of degreed people in health care to teach nursing and health care management in its largest program area, nursing and allied health.

So officials created half-time positions for retiring professors and a master's program for nurses (a doctoral nursing program is in the works), says Martin Sellers, VP of academic affairs at the four-year institution, which supports roughly 1,000 students and 135 teachers. Alumni of both programs will be invited to return as teachers.

"We're creating our own professional teachers to teach B.A. students," Sellers says. "It's a backward way of ensuring that our nursing school, which has a real strong enrollment, can continue."

Although baby boomers are reaching retirement age, things may not be as gloomy as some analysts predict.

Based on the Merrill Lynch survey results, 76 percent in this age group intend to keep working and earning in retirement; however, they expect to retire from their current job at around age 64, then work in an entirely new job or career. When asked about their ideal work arrangement at that time, 42 percent preferred to repeatedly "cycle" between periods of work and leisure, 16 percent would seek a part-time job, 13 percent planned on starting their own business, and 6 percent wanted another full-time job. Only 17 percent hoped to never work for pay again.

That's good news for schools, as long as HR is prepared to create innovative programs and jobs that appeal to the fast-growing retiree market. Think of it as a chance to improve upon traditional practices that haven't been examined in years.

Jack Schuster is questioning a trend involving the distribution of faculty appointments that has been gaining momentum over the last dozen years. As a professor of education and public policy in the School of Educational Studies at Claremont Graduate University (Calif.), he says more than half of all new full-time professors are being offered term contracts as nontenure faculty.

Although this may fill some of the talent gap created by baby boomers, he says it's unclear whether or not this hiring strategy is creating a caste system at colleges and universities that's comparable to the status difference between part-time and full-time faculty. He also doubts that contract employees can form as close of a relationship with their department or institution as tenured faculty seem to enjoy.

But this approach does offer several advantages. Since student interests and real-world needs are always shifting, hiring temporary teachers enables schools to be more flexible with the subjects they teach. It also places emphasis back on the classroom. The main responsibility of contract faculty is to be an effective teacher. Unlike tenured faculty, they are not expected to be heavily involved in research or publishing.

Still, Schuster says it's too early to tell if the approach is working.

"This creates a situation in which many of the faculty would at least in theory have less of a commitment to the employer and certainly the other way around," says Schuster, also co-author of The American Faculty: The Restructuring of Academic Work and Careers (The Johns Hopkins University Press, 2006). "The question then becomes whether in fact these kinds of faculty hires have that effect of yielding an upgrade of the quality of teaching."

Each year since 2001, a few dozen teachers have been retiring at Monroe Community College in upstate New York. The increase isn't surprising, considering the age profile of the school's faculty, says Janet Glocker, vice president of Academic Services at Monroe, which supports an estimated 310 tenured faculty.

Among their replacements are career changers who left the corporate world, driven by the need to serve. But transitioning from business to education can produce a bit of culture shock, which can lead to poor productivity, job dissatisfaction, and high turnover.

So all incoming faculty are assigned a mentor within their department and must complete a course that meets between 10 and 12 times a year and focuses on nitty-gritty details like how to develop a course information sheet or where students with specific needs can seek help.

In their second year of teaching, the faculty enroll in another class, EDU500, which lasts one semester. This course is a good idea for any higher education institution. It focuses on the college's role in the community and career opportunities at the school. Instructors learn about career paths at the college and start forming their own career plans.

University of Pennsylvania faculty nearing retirement can gradually reduce their duties to 25 percent.

Both of these Monroe programs are mandatory and were developed within the last five years, when the first wave of instructors began retiring.

"We saw this coming and have designed some relatively new ways to help these new people get on their feet sooner," Glocker says. "The subsidiary goal is to start building fabric across our several campuses by keeping them together."

Jack Heuer expects the first wave of retirees to hit the University of Pennsylvania within the next decade. As vice president of HR at the Philadelphia institution, he says 3.5 percent of the school's 13,000 full-time employees are age 65 or older. He expects that number to double by 2015.

Still, the school developed a reduction-in-duties program where faculty can gradually reduce their duties from 100 percent to 25 percent, which also allows tenure slots to be opened. At this time not many are taking advantage of it, but that will change as more baby boomers approach retirement.

Another consideration is giving benefits to part timers who have downshifted from full-time jobs so they can remain employed by the university. Since not many schools do this, he says HR is exploring the issue in hopes that it will not only retain experienced staff but also attract job candidates from other schools.

Meanwhile, HR staff recently created a workshop series for baby boomers about the psychological aspects of retiring. Not surprisingly, their No. 1 concern is medical benefits in retirement.

That may also be the top issue for baby boomers at your school. Either way, take a hint from these schools. Start planning now. Ask employees what they value and need. Instead of waiting for the storm to hit, it'll be a lot easier handling one wave at a time.

Carol Patton is a Las Vegas-based freelance writer who specializes in covering HR issues.