April 9, 2012 SHRM Survey Findings: SHRM-AARP Strategic Workforce Planning

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Definitions 2  Strategic workforce planning assessment: Evaluating an organization’s current and future critical talent needs using workforce modeling and scenario planning to identify potential skills gaps and talent shortages.  Older workers: Employees at an organization that are age 50 or older.  Younger workers: Employees at an organization that are age 31 and younger.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Key Findings 3  Have organizations conducted strategic workforce planning assessments to evaluate their current and future critical talent needs? Two-fifths of organizations (40%) have conducted strategic workforce planning assessments to identify their future workforce needs for the next 5 years. About one-third of organizations have identified their potential skills gaps for the next 5 years (36%). Twenty-nine percent of organizations have analyzed the impact of workers age 50 and over leaving their organizations.  Are organizations preparing for a potential shortage of talent when older workers begin to retire in greater numbers and leave the workforce? Although many organizations are at the initial stages of the preparation process, there has been a slight increase in awareness of a potential shortage of younger workers with the requisite skills needed to replace older workers who are retiring. More than one-quarter (27%) of organizations indicated they are becoming aware of the issue, an increase of nine percentage points from 2010 (18%). Thirty-nine percent of organizations are beginning to examine internal policies and management practices to address this issue (e.g., succession planning, phased retirement, etc.), showing no difference from Additionally, roughly one-fifth of organizations (18%) indicated that no changes were necessary after their evaluation, a decrease of 12 percentage points from 2010 (30%).  How much of an issue are the potential losses of talent for organizations and industries as older workers retire or leave their organizations over the next decade? Approximately one-half (46%) of organizations believe that potential loss of talent over the next decade is a potential problem for their organization while 27% indicated that it is not a concern. As older workers exit the workforce over the next decade, 39% of organizations believe that this will cause potential problems for their industry; however, approximately one- quarter (24%) do not foresee problems for their industry.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Key Findings 4  Which basic and applied skills do older workers have an advantage in compared with younger workers? Approximately one-half of organizations (51%) indicated that writing in English (grammar, spelling, etc.) was the top basic skill observed among older workers that is not readily seen among younger workers. Fifty-two percent of organizations reported professionalism/work ethic as the top applied skill that younger workers are less likely to exhibit.  Which steps are organizations taking to retain and recruit older workers in order to prepare for the potential skill gaps that may occur as younger workers enter and older workers exit the workforce? Nearly one-half of organizations (45%) have increased training and cross-training efforts. Roughly one-third (38%) of organizations have also developed succession plans and/or hired retired employees as consultants or temporary workers (30%). Organizations are also offering flexible work arrangements (27%) and offering part-time positions to older workers (24%).

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization conducted a strategic workforce planning assessment to…? 5 Note: n = Percentages shown indicate only the respondents who answered “Yes” to this question.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization conducted a strategic workforce planning assessment to…? Comparisons by Organization Sector Publicly owned for-profit (50%)>Privately owned for-profit (30%) 6 Comparisons by organization sector Publicly owned for-profit organizations are more likely than privately owned for-profit organizations to have conducted a strategic workforce planning assessment to identify potential skills gaps over the next 5 years. Comparisons by organization staff size Organizations with 25,000 or more employees are more likely than organizations with 1 to 2,499 employees to have conducted a strategic workforce planning assessment to identify future workforce needs over the next 5 years. Comparisons by Organization Staff Size 25,000 or more employees (66%)> 1 to 99 employees (25%) 100 to 499 employees (36%) 500 to 2,499 employees (36%) Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization conducted a strategic workforce planning assessment to…? 7 Comparisons by organization staff size (continued) Organizations with 2,500 or more employees are more likely than organizations with 1 to 499 employees to have conducted a strategic workforce planning assessment to analyze the impact of older workers leaving the organization. Comparisons by Organization Staff Size 2,500 to 24,999 employees (47%) 25,000 or more employees (49%) > 1 to 99 employees (22%) 100 to 499 employees (22%) Organizations with 25,000 or more employees are more likely than organizations with 1 to 2,499 employees to have conducted a strategic workforce planning assessment to identify potential skills gaps over the next 5 years. Comparisons by Organization Staff Size 25,000 or more employees (63%)> 1 to 99 employees (23%) 100 to 499 employees (33%) 500 to 2,499 employees (33%) Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 There may be a shortage of younger workers with the skills and qualifications necessary to replace the older workers who are preparing to retire. Which of the following best describes your organization’s preparation for this change? 8 Note: Respondents who answered “Don’t know” were excluded from this analysis.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Overall, how would you describe your organization’s and industry’s potential loss of talent as a result of the possibility of the older workers retiring, or leaving the organization for other reasons, over the next decade? 9 Note: Respondents who answered “Don’t know” were excluded from this analysis. It is a crisisIt is a problemIt is a potential problem It is not a problem Organization (2012; n = 407) 1%26%46%27% Organization (2010; n = 369) 2%20%45%33% It is a crisisIt is a problemIt is a potential problem It is not a problem Industry (2012; n = 374) 7%30%39%24% Industry (2010; n = 317) 3%29%47%21%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 In your opinion, what is/are the greatest basic skills gap between older workers and younger workers? 10 Note: n = 421. Respondents who answered “Don’t know” were excluded from this analysis. Respondents were asked to select their top two choices. Percentages do not equal 100% due to multiple response options. Basic skills for which older workers are perceived as having the advantage Percentage Writing in English (grammar, spelling, etc.)51% Technical (computer, engineering, mechanical, etc.)33% Mathematics (computation)16% Reading comprehension (in English)13% English language (spoken)12% Government/economics10% History/geography6% Science5% Foreign languages3% Humanities/arts1% Other9%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 In your opinion, what is/are the greatest basic skills gap between older workers and younger workers? Comparisons by Organization Sector Government agencies (23%)> Privately owned for-profit (8%) Publicly owned for-profit (5%) 11 Comparisons by organization sector Government agencies are more likely than privately owned and publicly owned for-profit organizations to believe that government/economics is the greatest basic skills gap that younger workers have when compared with older workers. Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 In your opinion, what is/are the greatest applied skills gap between older workers and younger workers? 12 Note: n = 421. Respondents who answered “Don’t know” were excluded from this analysis. Respondents were asked to select their top two choices. Percentages do not equal 100% due to multiple response options. Applied skills for which older workers are perceived as having the advantage Percentage Professionalism/work ethic52% Critical thinking/problem solving27% Written communications16% Lifelong learning/self-direction16% Leadership15% Oral communications12% Ethics/social responsibility12% Information technology application11% Teamwork/collaboration10% Creativity/innovation4% Diversity2% Other2%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization taken any of the steps below to prepare for potential skill gaps and/or retain and recruit older workers? 13 n = 415 YesNo Increased training and cross-training efforts45%55% Developed succession plans38%62% Hired retired employees as consultants or temporary workers30%70% Offered flexible work arrangements (e.g., job sharing, telework, etc.)27%73% Offered part-time positions to older workers24%76% Offered retirement planning programs23%77% Developed processes to capture institutional memory/organizational knowledge from employees close to retirement 17%83% Increased recruiting efforts to replace retiring employees17%83% Offered financial planning programs16%84% Offered wellness programs that are attractive to older workers14%86% Provided training to upgrade skills of older workers13%87% Encouraged older workers to work past traditional retirement age12%88%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization taken any of the steps below to prepare for potential skill gaps and/or retain and recruit older workers? (continued) 14 n = 415 YesNo Tailored benefits offerings to encourage older workers to stay with organization 11%89% Increased automated processes (e.g., use of robotics)9%91% Created new roles within your organization, specifically designed to bridge a skills or knowledge gap 9%91% Provided opportunities for older workers to transfer to jobs with reduced pay and responsibilities 8%92% Asked older workers for feedback via survey or other mechanism about what would encourage them to stay with the organization 4%96% Established alternative career tracks for older workers3%97% Other5%95%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization taken any of the steps below to prepare for potential skill gaps and/or retain and recruit older workers? Comparison by Organization Sector Publicly owned for-profit (56%)> Privately owned for-profit (37%) Nonprofit (31%) Government (26%) 15 Comparisons by organization sector Publicly owned for-profit organizations are more likely than privately owned for-profit, nonprofit and government organizations to have developed succession plans in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce. Government agencies are more likely than publicly owned for-profit organizations to have encouraged older workers to work past traditional retirement age in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce.. Comparison by Organization Sector Government (32%)>Publicly owned for-profit (9%) Government agencies are more likely than publicly owned for-profit organizations to have developed processes to capture institutional memory/organizational knowledge from employees close to retirement to retain and recruit older workers in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce. Comparison by Organization Sector Government (26%)>Publicly owned for-profit (7%) Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization taken any of the steps below to prepare for potential skill gaps and/or retain and recruit older workers? Comparisons by Organization Sector Government (51%)> Publicly owned for-profit (24%) Privately owned for-profit (22%) 16 Comparisons by organization sector (continued) Government agencies are more likely than publicly owned for-profit or privately owned for-profit organizations to have hired retired employees as consultants or temporary workers in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce.. Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization taken any of the steps below to prepare for potential skill gaps and/or retain and recruit older workers? 17 Comparisons by organization staff size Organizations with 25,000 or more employees are more likely than organizations with 1 to 2,499 employees to identify future workforce needs over the next 5 years in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce. Comparisons by Organization Staff Size 25,000 or more employees (66%)> 1 to 99 employees (25%) 100 to 499 employees (36%) 500 to 2,499 employees (36%) Organizations with 2,500 or more employees are more likely than organizations with 1 to 499 employees to have developed succession plans in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce. Comparisons by Organization Staff Size 2,500 to 24,999 employees (58%) 25,000 or more employees (66%) > 1 to 99 employees (27%) 100 to 499 employees (31%) Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Has your organization taken any of the steps below to prepare for potential skill gaps and/or retain and recruit older workers? 18 Comparisons by organization size (continued) Organizations with 25,000 or more employees are more likely than organizations with 1 to 499 employees to have increased recruiting efforts to replace retiring employees in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce. Comparisons by Organization Size 25,000 or more employees (37%)> 1 to 99 employees (12%) 100 to 499 employees (14%) Organizations with 500 to 24,999 employees are more likely than organizations with 1 to 99 employees to have hired retired employees as consultants or temporary workers in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce. Comparisons by Organization Size 500 to 2,499 employees (38%) 2,500 to 24,999 employees (42%) >1 to 99 employees (16%) Organizations with 500 to 2,499 employees are more likely than organizations with 1 to 99 employees to have offered financial planning programs in preparation for potential skills gaps that may occur as younger workers enter and older workers exit the workforce. Comparisons by Organization Size 500 to 2,499 employees (23%)>1 to 99 employees (7%) Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 How effective has the step(s) your organization has taken been in preparing for potential skill gaps and/or retaining and recruiting older workers? 19 Note: Response options were only rated by respondents who indicated that their organization had taken the specified step to prepare for potential skill gaps and/or retain and recruit older workers. Percentages may not equal 100% due to rounding. Too soon to evaluate Not at all effective Somewhat effective Very effective Developed succession plans (n = 157)27%3%52%17% Created new roles within your organization, specifically designed to bridge a skills or knowledge gap (n = 35) 26%6%37%31% Increased training and cross-training efforts (n = 179)24%1%50%26% Developed processes to capture institutional memory/organizational knowledge from employees close to retirement (n = 68) 22%1%56%21% Offered wellness programs that are attractive to older workers (n = 58) 17%5%53%24% Offered financial planning programs (n = 66)17%3%52%29% Increased recruiting efforts to replace retiring employees (n = 71) 15%4%62%18% Offered part-time positions to older workers (n = 99)15%3%38%43%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 How effective has the step(s) your organization has taken been in preparing for potential skill gaps and/or retaining and recruiting older workers? (continued) 20 Note: Response options were only rated by respondents who indicated that their organization had taken the specified step to prepare for potential skill gaps and/or retain and recruit older workers. Percentages may not equal 100% due to rounding. Too soon to evaluate Not at all effective Somewhat effective Very effective Offered flexible work arrangements (e.g., job sharing, telework, etc.) (n = 111) 14%2%50%35% Tailored benefits offerings to encourage older workers to stay with organization (n = 44) 11%7%55%27% Increased automated processes (e.g., use of robotics) (n = 35) 11%0%63%26% Provided training to upgrade skills of older workers (n = 53) 11%2%64%23% Offered retirement planning programs (n = 95)11%7%51%32% Provided opportunities for older workers to transfer to jobs with reduced pay and responsibilities (n = 32) 9% 59%22% Encouraged older workers to work past traditional retirement age (n = 50) 8%6%52%34% Hired retired employees as consultants or temporary workers (n = 123) 4% 49%43%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 To the best of your knowledge, what percent of employees, full-time and part- time, at your work location are age 50 or older? 21

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 To the best of your knowledge, what percent of employees, full-time and part- time, at your work location are age 50 or older? Comparisons by Organization Sector Privately owned for-profit (33%)>Government (9%) 22 Comparisons by organization sector Privately owned for-profit organizations are more likely than government agencies to have 1% to 19% of their staff age 50 or older. Comparisons by Organization Sector Government (40%)>Privately owned for-profit (19%) Government agencies are more likely than privately owned for-profit organizations to have 40% to 59% of their staff age 50 or older. Comparisons by organization staff size Organizations with 100 to 499 employees are more likely than organizations with 2,500 to 24,999 employees to have 1% to 19% of their staff age 50 or older. Comparisons by Organization Staff Size 100 to 499 employees (34%)>2,500 to 24,999 employees (12%) Note: Only statistically significant differences are shown.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Demographics: Organization Industry 23 Percentage Manufacturing19% Health care and social assistance18% Professional, scientific and technical services18% Public administration12% Finance and insurance10% Education services8% Transportation and warehousing8% Administrative and support and waste management and remediation services6% Information, publishing industries5% Utilities5% Accommodation and food services4% Construction4% Note: n = 399. Percentages may not equal 100% due to multiple response options.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Demographics: Organization Industry (continued) 24 Note: n = 399. Percentages may not equal 100% due to multiple response options. Percentage Religious, grant-making, civic, professional and similar organizations4% Retail trade4% Repair and maintenance3% Wholesale trade3% Agriculture, forestry, fishing and hunting2% Arts, entertainment and recreation2% Mining2% Real estate and rental and leasing2% Personal and laundry services1% Other9%

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Demographics: Organization Sector 25 Note: n = 398. Percentages do not equal 100% due to rounding.

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Demographics: Organization Staff Size 26 n = 390

SHRM-AARP Strategic Workforce Planning ©SHRM 2012 Demographics: Other 27 Does your organization have U.S.-based operations (business units) only or does it operate multinationally? U.S.-based operations only70% Multinational operations30% n = 407 Is your organization a single-unit organization or a multi- unit organization? Single-unit organization: An organization in which the location and the organization are one and the same 32% Multi-unit organization: An organization that has more than one location 68% n = 404 For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or both? Multi-unit headquarters determines HR policies and practices 50% Each work location determines HR policies and practices 3% A combination of both the work location and the multi-unit headquarters determine HR policies and practices 48% Note: n = 282. Percentages do not equal 100% due to rounding. Which HR department/function was responded about throughout this survey? Corporate (companywide)69% Business unit/division17% Facility/location14% n = 282

SHRM-AARP Strategic Workforce Planning ©SHRM 2012  Response rate = 15%  Sample composed of 430 randomly selected HR professionals from SHRM’s membership  Margin of error +/- 5%  Survey fielded February 13, 2012 – March 12, Methodology For more survey findings, visit Follow us on Twitter: For more survey findings, visit Follow us on Twitter: SHRM-AARP Strategic Workforce Planning Project leader: Christina Lee, SHRM Research Project contributors: Jean Setzfand, vice president, Financial Security, AARP Ed Redfern, Jr., senior Issue specialist, Financial Security, AARP Mark Schmit, Ph.D., SPHR, vice president, SHRM Research Fred Emmert, Senior Speechwriter & Speakers Bureau Manager, SHRM Evren Esen, manager, SHRM Survey Research Center