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One industry that will be affected by the aging workforce and baby boomer retirements is the Aerospace industry. "Roughly a quarter of the nation's 637,000 aerospace workers could be eligible for retirement this year, raising fears that America could be facing a serious skills shortage in the factories that churn out commercial and military aircraft" (Montgomery, 2008). The dynamic of this workforce is the wealth of knowledge, skills, abilities, and experience that will be walking out the door never to return. The Boeing Company, the world's largest aerospace company (Boeing in Brief), is the poster child of an aging workforce. With the average age of their workforce in excess of 50 years old (see Figure 1) and a predicted 20,000 new workers needed in the aerospace industry in the next ten years (Stowe, 2012), Boeing will need to find ways to fill the highly skilled positions left by the retiring workers. In addition, they will have to compensate for the older workers who are choosing to stay.
Figure 1. The Boeing Age Demographic
The Older Worker
"Older workers want to retire later; companies fear they will soon be short of skills. Why can't the two get together?" (Turning Boomers into Boomerangs, 2006). Some workers throughout the world are choosing to work beyond the normal retirement age; which allows companies to hold back on trying to replace these highly knowledgeable and skilled employees. Thirty years ago, the median age of the workforce was 35, and today it is 41. In 2000, 13% of the U.S. labor force was 55 and older and is predicted to rise to 23% by 2030 (Lee & Mather, 2008). This data indicates that the workforce is working well into retirement age, which creates new challenges for all companies.
Weakened Pension Plans
One reason older workers are choosing to stay is contributed to the change in employee pension plans. "It is important to note that nearly half of all U.S. employees do not have any type of workplace-based pension plan" (Pitt-Catsouphes & Smyer, 2005). Concerning the other half of the demographic that do have workplace pensions, very few participate in plans that are fully funded by the employer. Most companies have moved to defined contribution programs that require employees to subsidize their own retirement funds, with some employer contribution matching available (Pitt-Catsouphes & Smyer, 2005).
Increased Personal Responsibilities
Another reason some older workers are working beyond retirement age is because of increased responsibilities in supporting family members. "Approximately 23 percent of older workers care for a parent, 22 percent care for a spouse, 21 percent care for a school-age child, and 8 percent care for 'another' (including financial responsibilities for a college-age child)" (Pitt-Catsouphes & Smyer, 2005). With the increase in the unemployment rate and the rise in costs of college educations, older works are being forced to support their children well into adulthood.
An aging workforce gives companies like Boeing the opportunity to keep their best and brightest in important positions, which allows them to maintain their competitive edge in the aerospace industry. These workers have been at the company for a long time, and tend to remain loyal through the good times and the bad. Their experience and maturity lead to a higher quality product and the ability to concentrate on their work, which reduces workplace injuries and absenteeism. The aspect of having such a strong workforce gives Boeing a false sense of security though, because these outstanding workers can't work forever.
Challenges of the Older Worker
The Human Condition.
One downside to the older worker involves the natural progression of the human body. With increasing age, the body slowly loses the ability to build and maintain muscle mass. This leads to increasingly stiff joints and a reduction in flexibility, along with reduced vision and a decline in hearing abilities (The Aging Workforce, 2010). These realities of life often require the older worker to have outside support to continue adding value to a company. In addition, the healing process of an older worker is slower, which leads to an increase in lost work time from injury and illness.
Limited Career Opportunities.
Boeing is boasting that they will have over 600,000 maintenance technician jobs available over the next twenty years, but these are mostly entry-level positions (kgmi, 2012). The ability to recruit and retain highly talented individuals requires the person to see a career path laid out before them. The older workforce at Boeing comprises workers with many years of seniority and high level positions. This limits the pay and the positions that Boeing can offer their newer employees, and hurts recruiting experienced professionals (i.e. engineers) from other companies that could fill the skill gap.
The Fear of Change.
When a group of workers are seasoned and have been at a company for a long time, they tend to get stuck in their way of doing business and refuse to change. Older employees at Boeing run the company, and they have a difficult time with changing the way they operate. Boeing management does not encourage innovation, instead placing their knowledge workforce on outdated projects that cause an erosion of technical skills. They base their promotions on the number of years at the company, rather than basing it on performance and capabilities. They are set on using outdated legacy systems, which reduces the ability to take advantage of technological advances (Boeing Reviews, 2008).
The Retiring Workforce
Boeing's challenge in adapting their work environment to an aging workforce is only one side of their employment problem. They also have to cope with the workforce who is not planning to stay past retirement age. The communication director for the Society of Professional Engineering Employees in Aerospace stated "We have a fear that if the aging work force isn't paid attention to, we could wake up and find we've lost some critical skills" (Dunlop, 2010). The workforce at Boeing is separated into two major demographics: the professional workers, which include engineers and scientists; and the skilled laborers, which include the electricians, sheet metal mechanics, and other maintenance technicians. Half of Boeing's entire workforce will be eligible to retire within the next five years. Within those numbers, more than 56% of Boeing's engineers are over 50, with their retirement eligibility to begin at 55 (Dunlop, 2010). The older workers at Boeing aren't segregated into either specific group; rather they are spread through the entire company.
Challenges of Filling the Skill Gap
Lack of Qualified Applicants.
Boeing has many job openings; most of them being filled from workers within the company (Union Helps Machinist Get His Seniority Back, 2012). This means that the worker being promoted leaves a vacancy at a lower level position. The manufacturing industry is boasting thousands of job vacancies going unfilled each year. With 14 million people out of work, one would think jobs would be filled quickly. "A survey by ManpowerGroup found that a record 52 percent of US employers have a difficulty filling critical positions within their organizations - up from 14 percent in 2010" (Reuters, 2011). The problem at Boeing and many other manufacturing facilities is the lack of skilled applicants available. Boeing is finding it extremely difficult to find the qualified workers because most of their positions require science, technology, engineering, and math related skills.
Lack of Engineering Graduates.
In the college education system today, the most popular college degrees lean toward business and social sciences. Business degrees compromise 22 % of college graduates, while 11% make up social sciences and history. "American colleges are producing fewer math and science graduates as students favor social sciences, whose workload is perceived to be manageable, leading to a skills mismatch" (Reuters, 2011). This isn't to say that a business or social science degree is not legitimate, but companies that are hiring in a weak economic environment don't need them, they need the hard sciences. The most sought after degree by major companies is in fact engineering. The problem is, only 5% of college graduates earn a degree in engineering (Reuters, 2011).
The Skilled Labor Misconception.
The blue-collar worker, the mechanic, the electrician; these are all terms that refer to the field of skilled laborer. This working class fits somewhere between the highly educated professional and the sanitation collector, requiring some form of education and a high level of skill and experience. These are the hardest positions to fill in today's labor market, which is causing companies like Boeing to scramble to close the skill gap between the retiring skilled laborer and the new employee. The host of the television show "Dirty Jobs" recently sent a letter to presidential hopeful Mitt Romney imploring him to focus his presidency on the skilled labor workforce, stating "Even as unemployment remains sky high, a whole category of vital occupations has fallen out of favor, and companies struggle to find workers with the necessary skills" (Caldwell, 2012). The skilled labor workforce in the past came from a family tradition of skilled workers, retired military members who learned the trade while enlisted, and the industrial revolution. The problem now is, fathers don't want their sons working menial labor jobs; the military is moving away from skilled labor, focusing more on contracted labor; and the technological revolution has created youth interested in technology and computers.
The aging workforce at Boeing is moving in one of two directions when they reach retirement age; they are either moving into the world of retirement, or they are choosing to stay onboard to continue their careers. Both of these choices are causing problems for Boeing; the individuals retiring are creating a skill gap that is difficult to fill, while the retirement age workers are forcing Boeing to develop ways to create a working environment to support them. There are two potential ways to fill the skill gap while supporting older workers: Boeing can keep the older worker around as long as possible to avoid a lapse in workload while changing their work environment to support an aging worker; or they can find younger workers who are willing to fill entry level positions that allow growth within the company, and move older workers towards retirement.
Retaining Older Workers
In a manufacturing facility such as Boeing's, the repetitive movement of a skilled laborer can take its toll throughout a long workday. As the worker gets older, these movements put an increasing amount of strain on their body, requiring more time to rest. This sometimes can lead the worker to take time off from work to recover from a few days of repeated strain, which causes a gap in work completion. In an effort to decrease rest time and lost workdays, Boeing needs to take a page from BMW's manufacturing facility. BMW chose to develop a program that will make the worker more comfortable in their work environment by restructuring their work area. They offered many workers telescoping chairs, which were used on the assembly line to keep workers off their feet but still reach the area where they need to work. In addition "They included laying new floors, outfitting workers with special shoes, installing easier-to-read computer screens, letting laborers sit instead of stand, and piping in more daylight" (Pommereau, 2012). They also kept workers informed of the importance of nutrition and physical health by hanging posters and information on walls, and offering a recreation area where workers could work-out and stretch during breaks. Adding these changes will keep the workers on the Boeing assembly floor for longer periods, and will reduce the amount of lost work due to tiredness and injuries. Equipping the assembly and manufacturing lines at Boeing with these changes will not only assist the aging workers who choose to work beyond retirement; it may also entice other workers that are contemplating retirement to stay around a little longer.
The money invested to modify the assembly and manufacturing facilities may not be value added for Boeing. A large amount of funding will be required to change the manufacturing process at Boeing to include these new ergonomic improvements. The large amount of money invested in the changes will give Boeing a workforce of retirement-aged employees who might leave shortly after the improvements are made. In addition, these improvements will only delay the inevitable; these workers are going to retire sooner rather than later.
The professional worker at Boeing, such as the engineer or scientist, may not be as physically constrained as the skilled laborer because most of their work is done in front of a computer or within a laboratory environment. Regardless, the older these workers get, the more they change the way they perceive work. As an individual ages, their level of responsibility in their personal lives change. Older workers "are less interested in working long hours, less defined by their careers, and much more interested in part time work" (Schneider). To ensure they can retain some workers who are shifting their priorities outside the workforce, Boeing needs to offer different opportunities to keep the job worthwhile. They can offer flexible work schedules, telecommuting opportunities, or part-time work. The flexible work schedule will give the employee the opportunity to work full-time, but they will be able to choose when they work their hours. If they choose to come to work at 0500 one day and 1000 the next, Boeing should allow it as long as the worker clocks 40 hours. Telecommuting will give the worker the opportunity to work at home some days while coming to work only when it is required for the work being performed. This idea can work well with the engineering field, and new technology allows the engineer to be at work virtually. Part-time work is an option if the worker no longer chooses to maintain a full-time work lifestyle, which benefits Boeing by retaining the skill and experience of the worker while at the same time giving the worker more personal time.
The concept of modified work schedules should entice many workers to stay onboard, but it can also lead to a reduction in quality work. The engineer who is working from home may have a crying grandchild next to them while they are trying to solve a problem, which will distract them from discovering the best solutions. A worker on a flexible schedule may choose to cook the books in order to receive full-time pay while only working part-time. A part-timer may change their attitude towards the corporation, and not care about the work they output anymore because they aren't a full member of the workforce.
Building for a Younger Workforce
As an alternative solution to adapting the work environment for the older workforce, Boeing can focus on creating a corporation that is a desirable place to work for the younger generation. There is a distinct misconception in the United States concerning the skilled labor workforce. People see the work as menial, career killing, and difficult. Common knowledge should dictate that if an individual develops their skills to fill a position in high demand, they will be highly sought after in the business world. An individual in demand will have the competitive edge when it comes to benefits, pay, and job choice. In order to change the perception of the manufacturing industry, Boeing needs to create a work environment desirable to a younger generation. The younger generation is technologically savvy; therefore, Boeing needs to design their recruitment process around social networking sites such as Facebook and Twitter. The company can provide information to their target audience and design that information in a way that it is appealing to the younger generation.
The current education system in the United States doesn't focus on the needs of business, but focuses more on the fields that the desires. Young people think the rewards of the medical and law fields are many, so they strive to become doctors and lawyers. These fields aren't as prolific as they once were, and they require many years of study and experience to become successful. Boeing needs to start communicating with colleges located near their facilities to create programs leading to a career with the company. They can build relationships with community colleges to form two-year degree programs that coincide with an apprenticeship program, which will lead to a job in a skilled labor trade. This will give the student the degree and the experience they need to fill the much needed position, and it will provide Boeing a way to monitor the progression of their investment to ensure the student will be a value added member of the company. Boeing can also develop a more stringent program to fill the void of engineers and scientists, focusing more on a summer hire program where the student goes to school in the winter and works as an intern during the summer. This will allow the student to focus on their studies during the school year, and give Boeing the opportunity to integrate the student into Boeing in the summer. In addition to the school partnerships, Boeing can offer grants and scholarships to students, which require a certain number of years employment with Boeing after graduation. Sometimes, the collaboration of a corporation and a university can be misaligned. A college may feel restricted by what they can teach because they are sponsored by the corporation; while the company may find that some of the courses the university is requiring for the program are not necessary, and they are merely trying to make money.
To further build upon the education programs that Boeing offers and help move the older employees into retirement, Boeing can develop a mentorship program for the younger generation. In the skilled labor force, the older employee can be removed from his permanent position in the manufacturing facility and become a trainer for the new employee. This will allow the worker to be a part of the process, but it will keep them from the strains of the work by allowing the younger worker to do the heavy lifting. In the engineering and science division, the senior personnel will manage the new hires workload and mentor them along the way. The older individual can accomplish this either through fact-to-face interaction or through technological advances (internet communication from home). This mentorship of senior workers to new hires will benefit Boeing by the transfer of knowledge from one generation to another, and it will allow Boeing to give the older worker an alternative working environment where they don't have to deal with the physical strains of a daily workload. This program may be difficult to develop if the older workers aren't fully onboard. Some workers may be offended with being asked to move away from the work they have done so long. They may feel like the company no longer finds them capable of doing the job, which may lead to lawsuits of age discrimination.
The mentorship programs that are developed will assist in transition, but more needs to be done in order to ensure company data and processes are transferred as well. "Don't just send an inexperienced employee to work with an experienced one. If possible, have experienced employees write down their troubleshooting or repair processes, and ask them to train others in a formal environment" (Brown & Galli-Debicella, 2009). The older workers should be tasked to write processes and procedures for the work that they have accomplished throughout their careers, and this information should be formalized for the younger workers to follow. This will reduce the number of errors in the work because the young worker that lacks experience will have guidelines to fall back on when they have questions in their work. Giving the worker the authority to write procedures can lead to inaccurate results. In asking the older workers to develop procedures for younger workers to follow, Boeing is leaving themselves open to subjectivity. When the worker writes a procedure, he may add certain shortcuts that he developed over the years that go against company policy or compromise safety.
The Best Option
The best solution described above to solve Boeing's aging workforce problems should be building for a younger workforce. Restructuring the entire assembly line to compensate for older workers will require a large investment, and the solution will only keep skilled workers around for a little while longer. Creating a work environment where the older worker becomes a mentor and trainer will reduce the chance of the older worker being injured from fatigue and allow the younger worker to take on the physical burden. This program will also create a gateway for the new generation of workers by passing down all the data available from the older workforce, as well as give the younger generation the experience they need (under guidance) to continue in their senior's footsteps. This will also give young people the opportunity to work for a corporation in their hometown. The colleges and universities located near the Boeing facilities will recruit local talent to work at the company, which will be beneficial to the community and Boeing. The region will realize lower unemployment rates, and the investment the company places on the individual will be less risky. The chances of a local worker leaving Boeing are much lower because of their ties to the community.
The problem Boeing faces with the aging workforce is not isolated to their corporation alone. All businesses throughout the United States and the world are facing similar challenges. The high unemployment rate only makes the issue more difficult, because the government thinks companies aren't hiring, so they are pushing for changes. The trouble doesn't lie in corporations, it lies on the worker. Individuals in the workforce have become complacent and lazy, expecting the world to hand them what they want. The older generation achieved success through hard work and dedication to their craft, and the younger workforce should take notice.