Dan Holden

Daimler Trucks North America

The Silver Tsunami refers to the rise

in the median age of the US workforce,

to levels unseen since the passage of

the Social Security Act of 1935.

By 2020, 25% of the U.S. workforce

will be composed of older workers

(ages 55 and over).

The Post-World War II baby boom

(“the Boomers”) created an unusually

large birth cohort for the U.S.

population, resulting in a large aging

population today.

This phenomena has many short-term

and long-term implications, affecting

many areas, including the U.S.

economy, society and public health.

Sociologists assumed when Social

Security kicked in, most Boomers would

step aside and let the Gen Y and

Millennials take over.

Then came the Great Recession, which

vaporized retirement savings.

The result…many Boomers must work

past the traditional retirement age.

That will create a number of waves, one

of which will hit the world of workers’

compensation.

©2014 Coventry Health Care Workers Compensation

1989

Leading manufacturer of commercial vehicles in

North America

Est. Portland, Oregon - 1949

“Transformers – Age of Extinction”

Who are the Boomers?

• …and why should I care?

The Aging Workforce

• Organizational impacts

Risk Assessment and Risk Control

• What to expect from an aging workforce

Keeping employees on the job

• Case studies & best practices

Succession Planning; Knowledge Transfer; and the Millennials

• Preparing for the Boomer exodus

1952

List of recent generations for individuals born in the US. Dates are approximate, as recognized by demographers.

2000-Now: New Silent Generation; Generation Z; Boomlets

1980-2000: Millennials; Generation Y; Echo-Boomers

1965-1979: Generation X

1946-1964: Baby Boomers*

1925-1945: Silent Generation (Lucky Few)

1900-1924: G.I. Generation (Good Warriors)

1883-1899: The Lost Generation (WWI)

‘Captain America’ - 1964

1. The save-the-world revolutionaries of the ’60s and ’70s

2. The party-hardy career climbers (Yuppies) of the

’70s/’80s (i.e. “Generation Jones,” born 1954-1965)

They are (were?) the most famous generation in U.S. history

The U.S. Census Bureau defines the Baby Boomers as those born between January 1, 1946 and December 31, 1964.

After U.S. troops returned from WWII, they quickly settled down and had babies.

This generation has transformed America as they have passed through every stage of life.

1941 - 1962

When they were in their teens they experienced the turbulent 60s - a decade of war, campus protests, and drugs

The most important events: assassinations of JFK, RFK & MLK; the Vietnam War; and the first American on the moon

They were the ‘Rock and Roll’ generation. The 50s and 60s were dominated by this new form of music. Woodstock was a music event that has never been equaled

In the 80s, they became the ‘Yuppies’ who laid the foundation of our business world

The Boomers were the first generation brought up in front of the TV set

1961

The baby boomers influenced politics and the economy like no other generation. They fought for civil rights and equality for women

In 1992 Bill Clinton became the first Baby Boomer president

Baby boomers rebuilt the economies in the industrialized countries and were huge consumers throughout the decades

In the 50s-60s they bought Hula Hoops and Frisbees. In the 70s-80s they built houses. Today they buy iPads, iPhones and other gadgets

They have been driving force behind the economy for the past 50 years

And now they have reached retirement age…

1964

The country's financial crisis came at a particularly bad time for Boomers.

This year, the oldest of the 78 million people born from 1946 to 1964 are turning 69.

Because of the immense size of this baby boom generation, the number of senior citizens will more than double between now and 2050, from 40 million to 89 million.

Older folks will make up a large share of the population, increasing from 13% now to 20% in 2050.

1961

Ka-Boom!

?

The

“Pill”

A baby boomer turns 60 every eight seconds – that’s more than 7,000 per day.

However…not all Boomers can retire due to financial and personal reasons.

Then there are Boomers can’t retire fast enough and employers are worried they will face a shortage of experienced workers over the next decade.

What to do…?

1966-1968

As the rate of retirements rises, the challenge to keep pace with skill and knowledge retention has increased dramatically

If the baby boom generation retires at the same rate and age as current older workers, the ‘baby bust’ generation that follows will be too small in number to fill the projected new jobs.*

In 2010, United Parcel Service said it needs to hire 25,000 new employees over the next 5 years to replace retiring baby boomers

*Bluestone's report, After the Recovery: Help Needed - The Coming Labor Shortage and How People in Encore

Careers Can Help Solve It

1949

1959

Think…and Plan

‘Cat Woman’ - 1966

Continuity of operations• Decision making, lost production,

sales, etc.

Smooth transitions• Departing personnel, incoming

personnel

• Role changes

Meet organizational objectives• Knowledge transfer

• Maintain service levels1968

Know Your Risk Horizon• Retirement potential Age and length of service

Retirement plan eligibility & benefits

• Existing succession planning Documented?

Accessible?

• Skill sets needed Static or dynamic

• Local labor availability How hard is it to recruit new

employees?

What is the competitive landscape?

There are 75M baby boomers on the verge of retirement 1

For the next 20 years an average of 10,000 people each day will reach age 65, which has historically been the retirement phase of life 1

While 13% of Americans are currently age 65 or older, that proportion will jump to 18 percent by 2030. The current 40M senior citizens will balloon to 89M by 2050 1

1US News and World Report – 3/23/2012,

1975

• In 1950 there were 7 workers for every person over the age of 65

1

By 2030 it is expected that there will be three workers for every person over the age of 65

In a 1998 Gallop survey 36% of respondents planned to wait until age 62 or later to retire, by 2004 this number had risen to 57%

• Current workers over 50 expect to continue working later in life than younger workers2

30% because they have to

60% because they want to

1 - 1999 Committee on Economic Development

2- April 24, 2008, Pew Research Center

1967

People are living longer

• Modern medicine

• Improvements in living

conditions

People can be productive

later in their lives

• Opportunities for

healthier living

• Desire to stay active

• Potential labor and skill shortages

Rapid draining of your labor pool Increase in retirement rates

Other unexpected departures

Challenges in recruiting new employeesBirth rates finally reached the 1957

peak in 2007

Some industries are already facing shortagesGovernment

Oil & gas industries

Medical (nursing, general practice doctors)

‘Captain Planet’ - 1990

• Prevent/reduce workforce shortages

Due to overall labor shortages

• Retain institutional knowledge

Takes time to transfer knowledge

• Retain skills and leadership

“Institutional knowledge” may not be well documented

Past advancement models may not work

• Attracting new employees Reduced pools of available talent

• Retaining current employees Competition from other employers

Changes in demands Flexible schedules

OpportunitiesMentoring

• Generational Gaps Reduced pool in the 25-45 year old

range

• Managing an older workforce Physical challenges

1966

• Consideration will be needed for the Aging Process:– Body's metabolic rate slows

and can lead to obesity & an increase in bad cholesterol levels

– Decline in mental function complex problem-solving, multi-tasking, slowing of mental processing

– Increase in MVAs – Leading cause of occupational fatalities for older workers in the U.S.

1960

1980

Second-hand smoke costs U.S. economy $10 billion per year 1

Type 2 Diabetes continues to be sixth leading cause of death in the U.S., affecting 21 million Americans (7%) 2

46% of adults consider themselves couch potatoes

During the past 20 years there has been a dramatic increase in obesity in the United States 3

Obesity is a major contributing factor in industrial accidents 4

• Even if obesity not a factor in causing injury, it complicates treatment and recovery time

• Suffer more hand, wrist and finger injuries

• File twice the number of work comp claims

• 7 times higher medical costs

• 13 times more work missed from occupational injury or illness

1 - Americans for Non-Smokers’ Rights 2 - CDC National Center for Chronic Disease 3 - N. American

Spine Assoc., 2006 4 - Institute on the Costs and Health Effects of Obesity (a creation of the National

Business Group on Health)

‘Super Boy’ - 1945

Resistance to Change• Many call this being “set in your ways”

Unhealthy Choices • Smoking, alcohol consumption, poor

food choices, inconsistent medical visits, and lack of exercise

Push Through the Pain • “It’ll go away in the morning.” Mature

workers will not report injury and will continue working in pain aggravating the injury

Falls• leading cause of death for adults over

65 Factors that increase the potential for a

fall include muscle weakness, balance problems, vision problems, side effects from medicines

National Resource Center on

Aging & Injury - 2007

1971

Physical demands: tasks they used to complete

easily may become more

difficult

Worker’s ego:won’t acknowledge reduction in

muscle strength & coordination

1979

Workers’ comp claims for older workers

simply cost more, and that’s not due to

higher salaries & subsequent temporary

disability payments

The driving factor are the co-morbidities

that are likely to develop with older

workers.

Individuals between the ages of 40-59 are

3X more likely to have ‘metabolic

syndrome’ and experience the combined

effects of an obese gut, high cholesterol,

higher BP, and insulin resistance, which

puts them on track to develop heart

disease and diabetes.

May 2014 briefing titled Managing Workers’ Compensation Exposures as the

Workforce Ages, the Risk Management Research group at Marsh & McLennan

“Big Hero 6” - 2014

AON studied $2.5B in workers’

compensation claims from 2007-2012

and found a consistently higher average

costs for workers compensation claims

for older claimants across all industry

groups.

45-54 year old claimants in the

Manufacturing Industry group’s average

claim cost was 52% higher than 25-35

year old claimants. This trend varied in

degree by Industry, but only by the pitch

of the slope.

AON Inc., 2014

‘Justice League’ - 1973

Mature workers report more back injuries

Are more likely to sustain fractures and dislocations from falls

Are at a greatly increased risk of fatalities

Are more susceptible to chronic diseases

Take significantly longer to recover• Between ages 19 to 29 the average

days lost per injury is less than 11 • Between ages 50 to 59 the average

days lost per injury is 47

National Institute for Occupational Health and Safety, 2001

Medical & indemnity costs

Production downtime

Loss of experienced employees

Training replacement employees

Management time to implement changes

Emotional impact and lower employee morale

Long-term impact on the injured worker

Increased workers’ compensation insurance rates

The indirect costs of a work related injury can be

2 – 17 times the actual cost of the claim

1974

Strains and sprains account for 43% of all non-fatal occupational injuries in mature workers

• Occurs if the workload is heavier than the load-bearing capacity of the worker

• Most common cause of work-related disability among older workers

• Can be an issue at every level of the organization

2008

Claims are often more

challenging Combined condition claims increase

Return to Work Program• Light duty policy should apply to all

injured workers

• Transferable skills

• Monitor the modified duty

Job duties and restrictions

Duration of the assignment

1971

ADA Issues• Temporary assignments• Permanent Partial

Disability

Work site modification

Permanent Total Disability• Retirement• Other employee benefits

1966 1989

2008

The positive effects of injury loss prevention and loss

reduction measures for older workers can be significant –

but difficult to evaluate • No control group

• It will take time to show the Return On Investment

The indirect costs of injuries are

the key to the importance of loss

prevention

• Time to manage the claim and

replacement workers

• Lower productivity and morale

• Loss of customer satisfaction and

goodwill

1980

Improve illumination, add color & contrast

Eliminate heavy lifting, elevated work from ladders, and long reaches

Design work floors and platforms with smooth and solid decking while still allowing some cushioning

Reduce static standing time

Remove clutter from control panels; use large video displays

Reduce noise levels

Utilize hands-free telephone equipment

Recommendations by the

American Society of Safety Engineers (ASSE)

American Society of Safety Engineers, News Release (10/30/2007)

“The Green Lantern”

Career Development• Train and develop older workers to move

into less physically demanding positions

• Small training costs can result in large

benefits

Retain employees with institutional

knowledge

Reduce injury claims

Work Site Modification• Job analysis

• Ergonomic work stations

• More automation when possible

‘Aquaman’ - 1960

As the U.S. workplace continues to age, it

is critical to rethink wellness programs

A recent article in the Harvard Business

Review stated the following:

“Wellness programs have often been

viewed as a nice extra, not a strategic

imperative. Newer evidence tells a different

story. With tax incentives and grants

available under recent federal health care

legislation, U.S. companies can use

wellness programs to chip away at their

enormous health care costs, which are only

rising with an aging workforce.”

A wellness program addresses physical, nutrition and mental health issues for all employees, not just the aging

• Beneficial for both employers and employees by decreasing rates of illness, injuries, and absenteeism and overall healthcare costs

• Exercise improves flexibility, strength and range of motion

• Improves fitness & stamina

• Lowers stress levels

1966

Wellnessproposals.com, 2015

The results of a healthier workforce 1

• Lower sick leave usage

• Higher productivity

• Lower rate of injury and illness

• Faster recovery

It’s never too late - small lifestyle

changes can be beneficial

Health screenings can detect

medical issues affecting older workers

• Vision testing

• Cholesterol and Diabetes checks

• Blood pressure

Key cost issue: Poorly managed chronic

diseases 2

1Mercer Human Resource Consulting

22007 Mercer National

Survey of Employer-Sponsored Health Plans

Prostate Man sez, “take it like a man!”’

79% of large and 44% of

mid-sized U.S. companies

offer wellness programs

But over 60% do not

measure their ROI

Nevertheless, most mid-

sized and large companies

report their wellness

programs met or exceeded

their senior executives’

expectations in regards to

reducing overall health care

costsHR/Benefits Survey on Wellness by ADP -

http://www.shrm.org/hrdisciplines/benefits/articles/pages/well

nesschallenge.aspx#sthash.ftUx33rZ.dpuf

1977

Exercise!

Encourage all

employees to

participate in an

exercise program to

reduce the risk of

injury

Even a small amount of activity can result in better health1

1Agency for Healthcare Research & Quality, Centers for Disease Control

& Prevention, U.S. Department of Health & Human Services

1960

Passing it on to the next generation…

•In the next 10 years, 43 percent of

the workforce [in the US] will be

eligible for retirement

•Five hundred of the largest U.S.

companies can expect to lose 50

percent of their senior management

in the next five years

•Bruce Power, a Toronto, ONT

nuclear power generator employs

3,700 people, most of them

engineers. In three years, one third of

its workforce (1,221) will be eligible

for retirement

1985

The Brain Drain

Identification of crucial at-

risk knowledge

Prioritization of key at-risk

knowledge holders

In depth knowledge

interviewing, to discover

the core deep knowledge,

and to capture the stories

that bring this to life

Packaging the knowledge

into a reusable asset for

others.

All around the world, knowledgeable people are

retiring, and their knowledge is leaving with them

Succession planning enables your organization to identify talented

employees and provide education to develop them for future higher

level and broader responsibilities. Succession planning helps you

"build bench strength.“

Succession Planning assesses the current situation to plan the

workforce of the future, including developing a plan to address

succession of current workers as they leave the workforce due to

retirement, attrition, and other factors

Knowledge Management is the

process of extracting knowledge, in a

directly useful form, from an

organization’s information assets.

Knowledge Management recognizes

three main types of knowledge:

1) Structured information:

Knowledge that is explicit and codified

into documents and databases is the

most visible form of information, but

its usefulness depends on the quality

of its metadata including conditions of

use and guidance notes. 1966

Knowledge Management

2) Embedded knowledge: The

knowledge lodged into working

practices and procedures developed

over time for reasons of efficiency,

security and safety. Sometimes difficult

to identify, it can easily become

obsolete.

3) Human knowledge: The tacit

knowledge of individuals who may

identify patterns in a situation not

obvious to others. Much codified

knowledge starts in this form and an

audit identifies “best performing” and

“highly knowledgeable” individuals, so

that mechanisms can be devised to

utilize their expertise.

1978

Department 67

Knowledge harvesting transfers an

individual's tacit knowledge into a

more explicit format that can be

used by others

Often completed when an

individual is about to leave an

organization

The risk of knowledge loss is

increasing in many organizations

due to business drivers including:

office relocation;

merger/acquisition; downsizing;

business process re-engineering

and an aging workforce

1976

1974

Knowledge Harvesting

•Forty-Five years ago, Neil Armstrong

became the first man to set foot on the

moon, marking the zenith of a 10 year

$24 billion space program by NASA.

•In the years following, NASA found it

could not repeat the feat because all of

the key people involved had retired and

no one had recorded what they knew.

•To add insult to injury, the blueprints for

Saturn V, the only rocket powerful

enough to get to the moon, were lost.

onrec.com

Houston, we Have a Problem…

•International Harvester

approached by Russian officials

to build a new farm vehicle

factory.

•They contacted International

Harvester because it had built a

plant in Russia 20 years earlier.

•Unfortunately, there wasn’t a

single person at IH who knew

anything about the previous

project.

1983

Northrop Grumman

•In 1997, with the Cold War behind them,

thousand of engineers who had helped

design and maintain the B-2 bomber

were asked to leave the integrated

systems sector of Northrop Grumman

•12,000 workers filed out the door,

leaving only 1,200 from a staff of 13,000

•They took with them years of

experience and in-depth knowledge

about what was considered to be the

most complex aircraft ever built

CIO, Suzannah Patton, 2006, How to Beat the Baby Boomer Retirement Blues

‘Wonder Woman’ - 1978

Northrop Grumman…Solution! •A newly formed “Knowledge Management

Team” ID’d top experts & videotaped

interviews before they left

•The company uses a variety of tools to

retain and transfer knowledge from its

engineers—before they retire.

•Implemented document management

systems & common work spaces to record

how an engineer did his/her job for future

reference.

•Bring together older and younger

engineers across the country to exchange

information via e-mail or in person about

technical problems

•Using software that helps people find

experts within the company.

CIO, Suzannah Patton, 2006, How to Beat the Baby Boomer Retirement Blues

1984

What is the business driver?

Who is the customer for the

knowledge?

Is the knowledge easily

replaceable?

What is the best method for

capture?

What are the best ways of

making captured

knowledge available and

usable by others?

Knowledge Harvesting (How to Begin?)

First…find answers to these key questions:

1982

Most Baby Boomers believe that they will still be working after retirement. 8 in 10 plan to work at least part-time. *

This 'phased retirement' of Boomers will shape the American workplace and compensate for a severe talent gap due to a shrinking supply of new workforce entrants..

*AARP

1978

Nearly 24 industry associations have created a new organization, the “Alliance for an Experienced Workforce.”

This group works with employers to find creative ways to keep the retiring baby boomers working.

Additional training; enticements such as offering job-sharing, flex-time, and part-time work.

Aging Workforce News, 2/13/2006

1967

Utilizing retirees (or soon to be retirees) as trainers and coaches

Embracing communities of practice and other informal networks to generate ideas, to accelerate communication and to solve problems

Expanding repositories of content

Preparing video archives to preserve not only information, but also the "context" within the job processes

Utilizing retirees to assist in the identification and mapping of key job competencies

Enhancing mentor programs to pair retiring employees and other workers in "learning-based" teams

‘Talent Development’ magazine, 3/16/2006

1954

Aging happens: Know the impacts your

organization may face Reduce the overall impact

of aging issues

Succession planning & career progression

Loss prevention Workplace & job

modifications Wellness programs

The benefits are not limited to older

employees

1977

IBM is using a “social business pattern” to locate and capture expertise so it can be shared with fellow employees in the future

Through social networking platforms, employees can document, share, and search for corporate knowledge

This creates a corporate “brain” that can ease the pain of retiring workers

TD Bank has 1,300 locations in the US and 26,000 employees. They use a social network to capture knowledge and experience.

During this process they uncovered knowledge that improved their business processes.

Kevin Cavanaugh, IBM VP of Social Business Strategy

‘Billy Jack’ - 1971

‘Deadpool’ - 1991

2015 is the year the millennial

generation—ages 18 to 34—will

surpass the baby-boom generation in

size

It has already done so in cultural and

social significance

We boomers grew accustomed to the

notion, forged over decades, that we

drove the zeitgeist of our times

No more. Millennials rule.

Fortune Magazine, Alan Murray, March 5, 2015

50% of current insurance

workers are nearing

retirement age while half

of the total workforce will

consist of millennials by

the year 2020.

Of this group, only 5% are

interested in an insurance

career and 44% thinks the

insurance industry sounds

“boring.”

Property Casualty 360; The Institutes, 11/24/14

Minority groups accounted for 87% of the

national population growth between 2000

and 2010.

By 2042, the U.S. will be a majority-

minority country which means the majority

of residents will be racial or ethnic

minorities.

The Hispanic personal-lines market is

projected to grow to nearly $41 billion by

2020.

By 2028, 75% of worldwide discretionary

spending will be controlled by women.1996

Enhancing hiring packages to

be more attractive (vacation,

benefits, etc.)

Investing in the community,

especially green initiatives

Education opportunities

More comfortable office

arrangements

Have more fun

‘ThunderCats” - 1985

MyPath – collaboration of the Insurance Institute of America & The American Institute for CPCU

Encourage Millennials to consider the insurance field

Help change the perception of insurance people as boring nerds

Show younger folks that insurance can be “limitless”

They hope to achieve this by:

Offering internships

Planned advertising campaigns

1993

Mission: Funding the

education of tomorrow’s risk

management and insurance

leaders.

Award scholarships, grants,

and internships in the field of

risk management and

insurance2014

Dan HoldenDaimler Trucks North AmericaDaniel.Holden@Daimler.com