By Howard Risher

It was not too long ago that employers were offering financial incentives for older workers to retire early. The aging government workforce has been a topic of interest for more than a decade, with reports showing that government employers have more workers over age 45 than nongovernment employers. Emerging skill gaps suggest replacing that talent will be increasingly difficult.

The demographic trends mean that organizations will lose their most experienced talent as workers retire or move into part-time employment as they age. The loss of job knowledge will be difficult to replace as the supply of qualified Generation Xers is limited. Young workers also may not be ready to fill their shoes.

Instead of early retirement incentives, it could be that incentives to continue working will be needed.

The Demographic Facts

According to the Bureau of Labor Statistics, in 2014 the U.S. workforce was roughly 144 million, including almost 8.7 million working in elementary and secondary schools and 6.7 million working in public administration. An additional 1.3 million work in government hospitals.

In the nongovernment workforce, 44 percent are over age 45. In education the percentage jumps to 51 percent; in “public administration” it is 52 percent. When the groups are combined, the total over age 45 includes a total of 7.9 million workers.

The youngest workers are in “justice, public order, and safety activities,” which accounts for 42 percent of the public administration workforce.

In some jurisdictions, the workforce is dominated by older workers. In nongovernment sectors, only 15 percent of the workforce is older than 55; the comparable percentage working in government is 26 percent and a high percentage will soon be eligible to retire.

Those are national totals and as always, individual jurisdictions will be above and below the averages.

Increasing Engagement of Older Workers

Retirement at some point is inevitable for everyone. Employers have years invested in its experienced workers, but as they approach their earliest retirement date, if they do not feel valued, their level of commitment will begin to decline.

Rather than planning simply to replace older workers, which is traditional thinking, public employers can develop a strategy to take continued advantage of the knowledge older workers have developed.

Each employee’s decision to retire depends on circumstances that include their sense of how they are valued and their ongoing work experience. Looking to the future, the demographic facts suggest public employers will need to retain employees as long as they remain productive.

While the focus here is on older workers, it is important to keep in mind the needs and expectations of all workers. It’s possible that your workforce includes three generations of workers born anytime between the late 1940s and the early 1990s—roughly a 45-year period—each with their own values and career plans.

Here are steps that can be considered for this range of employees:

Commit to creating a culture of knowledge sharing. Executive team members need to make a visible effort to regularly meet with internal experts on key practices to understand newer methods and work practices. They should agree to attend group discussions of new technology and also agree to attend discussions of feedback from clients and customers.

Engage older (possibly those over age 50) employees in discussions of how their work experience can be enhanced. Two important themes are how their job-related knowledge can be better used and any policies or practices that undermine their ability to perform at their best.

Recognize and reward. A common weakness in employee management practices is employee dissatisfaction with recognition-and-reward practices. In contrast to the private sector, where there are frequent reasons to celebrate accomplishments, public agencies and the critics of them tend to focus more often on situations involving poor performance.

People at all ages want to be valued and recognized for their accomplishments. Those years-of-service awards are nice, but it would be more powerful to recognize true achievements and expand the reasons to recognize employees.

Update job descriptions to remove any statements that suggest employee age. Delete statements related to experience or education requirements that have not been validated.

Offer older workers opportunities to use a portion of their work hours to develop ideas to improve the results of their organization. Require proposals for their planned projects with estimates of the time, needed resources, and the expected results.

Permit employees to retire, start pension benefits, and then return to work with a part-time schedule that fits their organization’s operation to ensure continued access to the expertise of older workers.

The part-time role can be a way to transition to retirement but also keep employee knowledge available for a longer period. State laws governing pensions vary, but demographic facts suggest greater flexibility will be needed.

Offer a deferred retirement option plan (DROP), which is a related alternative that is especially attractive to employees with credited service at the pension plan max. In the planning stage, DROP provisions should be assessed by an actuary for costs, but it defers the benefit payments for a few years. Note: In the past, these plans were typically limited to law enforcement personnel.

Review the performance management system to confirm that the focus is on results and competencies specific to a job family. All workers should agree their performance has been rated on criteria intuitively relevant to their job, and there should be no reason for claims of age discrimination.

Analyze recent personnel actionsb—ratings, promotions, pay increases, bonus awards, layoffs, and disciplinary actions—for evidence of discrimination. Complete a similar analysis at least annually.

Provide training for managers and supervisors in dealing with the issues related to an aging workforce. The sessions can give managers an opportunity to share experience and seek advice. A proven strategy is to confer with and seek the input of older workers in planning efforts.

Define formal mentoring and coaching roles that give older workers a reason to share their knowledge with younger workers. Communicate the initiative as recognition of the expertise demonstrated by highly regarded older workers and the learning opportunities for younger workers.

Create groups that include both older and young employees to discuss and collaborate in addressing problems and future operating plans. Working together provides opportunities for knowledge transfer as well as occasions for older workers to demonstrate their expertise.

Consider developing a wellness program, which would benefit all employees but could be especially valuable to older workers. Providing for health screenings, health-risk appraisals, smoking cessation programs, weight-loss programs, or counseling, for example, would represent a valued benefit.

Offer caregiver support for workers struggling with caregiving responsibilities for younger dependents, older loved ones, or both. Caregiving responsibilities are cited as one of the primary reasons why mature workers need work schedule flexibility.

Consider modifications to job duties and working environment if an older worker has a disability to enable them to remain productive. It is highly probable that this will become increasingly important as workers grow older.

Create a group of retired employees with recognized expertise and treat them as consultants who are available to tackle problems. They can be paid on a basis that recognizes their value and the market for comparable expertise. They can also fill in for employees on leave or vacation.