If you have anything to do with staffing warehouses and distribution centers, then you've probably given some thought to the subject of demographics lately.
Demographics? That statistics-heavy stuff you read about in social studies? Yes, indeed—and let's hope you paid attention in class that day. That's because any long-term strategy for staffing warehouses and DCs has to consider the changing demographic profile of the American workforce—or else risk being caught shorthanded.
Most likely, what you've heard on the topic has focused on today's multilingual workforce. That's something virtually all warehouses and DCs are dealing with, whether they're located in urban or rural locales. (See "¿habla warehousing?" DC VELOCITY, September 2007.)
Important as that is, it's not the only demographic issue you need to be aware of: Age should also be on your radar screen. The U.S. population is getting older; people are living longer and working longer. According to "65+ in the United States: 2005," a National Institute on Aging report compiled by the U.S. Census Bureau, the number of senior citizens in this country is expected to double by 2030, when nearly one in five Americans will be 65 or older.
Right now, that trend may not be apparent in many warehouses (youthful immigrant workers still dominate the average DC's workforce). Yet it's a big enough worry that the Council of Supply Chain Management Professionals (CSCMP) annual conference in 2007 included two sessions on "disruptive demographics," including lengthy discussions of the impact of an aging population on supply chains. At last year's Material Handling Logistics Summit, moreover, a group of business executives, material handling equipment vendors, and academics identified the impact of demographics on distribution and logistics as their top concern.
The graying of America is a trend that will affect most, if not all, warehouses and DCs. The downside, of course, is the inevitable loss of knowledge and experience when large numbers of baby boomers retire. But there is an upside, especially if you're willing to think of an aging population as an opportunity instead of a problem: Employing "over 50" workers can actually boost warehouse productivity.
The American Society of Safety Engineers (www.asse.org) suggests the following steps to make industrial workplaces safer for older employees. Though the list was created with older workers in mind, the group says the changes will benefit workers of all ages.
That older workers should be more productive than the young 'uns may sound counterintuitive. After all, everyone knows that as people age, they think and move more slowly, and their eyesight, hearing, and muscle strength decline. That's true, but medical researchers, gerontologists, and safety engineers all agree that it's no reason to write off the over-50 crowd in a warehouse setting. In fact, research cited by the American Society of Safety Engineers and federal health agencies shows that workers 55 and older have fewer accidents on the job than do younger people. (When they are injured, though, they often take longer to recover.)
As for why older workers outperform their younger counterparts, there are a number of possible explanations, says Brian R. Sherman, director of ergonomic services for The Ergonomics Center of North Carolina at North Carolina State University. "They have more experience, and they may have moved up in their jobs so that now they're managers, or they may be leveraging support within their group," he suggests.
Another factor in their favor: Mature workers tend to subscribe to the "work smarter, not harder" philosophy. Forty-five percent of productivity increases in warehouses and DCs comes from more effective use of time, says Jeff Boudreau, a partner at workforce productivity specialists XCD Performance Consulting. In his experience, older employees excel in this area. "They are less easily distracted, and they know how to stay on task," he says. "The more senior warehouse associates usually are at the top of the list in terms of productivity, quality, and consistency. I've never found somebody who's not been able to achieve performance incentives due to age."
That's significant, because performance standards are not adjusted for specific groups of employees, says Evan Danner, president of TZA Consulting, which develops engineered performance standards and labor management systems. "You set specific standards for different functions … but in a world of engineered standards, you cannot set different standards based on age," he explains.
What about positions that require working with technology, such as highly automated material handling equipment? Boudreau says that seniors may not always be as tech-savvy as their younger co-workers, but he strongly disputes the notion that they can't be successful in technology-related jobs. "We've tracked all different types of [warehouse] workers on training curves. Even when we have set up moving goals, we have always found that older workers progress up the training curve the same as anyone else," he says.
Sherman agrees that older folks can make the grade when it comes to mastering tasks. "A number of studies on worker performance, including research papers that compare job performance and age, generally have found no correlation—either positive or negative—between the two relative to technical competence," he says.
Hiring mature workers can be an antidote to one of warehousing's most intractable problems: employee turnover. Danner has found that older workers tend to stay in their jobs longer, particularly in a unionized environment with good pay and benefits. They usually care more about benefits than 20- somethings and are more rooted in their communities. As a result, they're less likely to change jobs when something new comes along—like the oil companies that Boudreau says are "literally poaching people in the parking lot" of a West Texas warehouse operated by one of his clients.
Not ready to hang it up
The advantages of hiring mature workers seem clear enough. But do they actually want to work? Apparently, they do. A 2004 survey of 2,300 baby boomers conducted by Merrill Lynch, pollsters Harris Interactive, and the consulting firm Age Wave found that 76 percent of the respondents planned to continue working after retirement. In an earlier study of 1,000 people aged 55 and older, conducted by Age Wave on behalf of insurance giant AIG SunAmerica, about 95 percent of respondents said they expected to work at least part time after they retire, either by choice or by necessity.
Add those findings to current worries about the future of Social Security and the state of the U.S. economy, and you can't help but expect more mature workers to be knocking on your door looking for work. That could well happen, but they won't all be looking for a 40-hour week: Only 6 percent of the respondents to the Merrill Lynch study said they would want full-time work.
Flexible scheduling and good benefits are the biggest lures for mature workers. Adjusting work flows and scheduling to accommodate part-time workers takes some effort, of course, but the benefits often make up for it. Boudreau tells of one retailer who went to high school PTA meetings to recruit middle-aged and older mothers to work in a DC during school hours; the company also gave the part-timers a discount on merchandise and made the work environment as pleasant as possible. That strategy netted the retailer a number of reliable long-term employees, he says.
Another example is that of a company that moved its DC from northern New Jersey to a rural community in the southern part of the state because of the availability of large tracts of land. It soon found that the labor pool in its new location was too small to fully staff the DC with fulltime workers. Instead, Boudreau says, the company found the reliable—mostly part-time—workers it needed among the retirees in the "55-plus" communities that were springing up in the area.
Safe and sound
Although mature workers easily match (or outpace) their younger counterparts when it comes to productivity, there's no denying that their reactions may be a little slower, their eyesight may be a little fuzzier, and they may tire a little sooner than their younger colleagues. There are some basic steps you can take to help older workers consistently perform at high levels in the safest possible environment. For a quick rundown, see the sidebar titled "16 steps to a safer workplace." Here are a few additional recommendations:
Respect for all
Health and safety considerations aside, there are a few other factors that come into play in managing an older workforce. For instance, it's important to keep in mind that boomers and their elders have a very different way of looking at work, authority, and personal development than do the current crop of young professionals. In some DCs, there now are four generations working together— and that creates some managerial challenges.
Danner notes, for example, that friction sometimes occurs between young people with degrees in logistics or supply chain management and the older, more experienced workers they may supervise.
Yet for all their differences, workers from the various generations have this in common: they want respect. Regardless of their age or experience, they want to be treated as individuals with valuable ideas and knowledge that can be tapped for the benefit of all.
That's not something older workers can always take for granted. In some companies, there's still a tacit assumption that older folks are inflexible, uncreative, and generally less capable than younger co-workers. Therein lies an opportunity to make your DC stand out from the crowd. Give older workers what they want and need—including respect—and you could gain some of the most reliable, self-directed, and productive employees you've ever had.
To see what the DC workforce of the future might look like, just go to one of the DCs run by CVS Caremark, the Woonsocket, R.I.-based drugstore chain. In 2007, 10 percent of new hires in the company's distribution centers were over 50 years old. Currently, 25 percent of the DC workforce is over 50, and in 10 years that figure is expected to top 33 percent, says Kevin F. Smith, the company's senior vice president-supply chain and logistics.
Though that wasn't planned, Smith says he's not alarmed by the trend. He believes that having older workers on the job is an asset. "Older workers are more experienced and knowledgeable, and this helps in creating a safe and productive workplace," he says.
Over the past eight or 10 years, CVS has been automating more of its operations and making ergonomic enhancements to its DCs. Smith says the retailer made that decision to improve processes, boost productivity, and lessen the likelihood of repetitive stress-related injuries in the workforce in general, but those measures have proved to be especially helpful to older workers.
The combination of efficiency and more mature workers has produced a steady increase in productivity and improvements in customer service. Smith believes that CVS's distribution centers are safer and more productive than ever. That's a tribute to all of the company's associates, both young and old, he says. But older employees have played a big role in that success. "We believe that our current mature workers add to that productivity, rather than detract from it, because of their experience, knowledge, and expertise," Smith observes. "These are associates who know our business and continually help us to fine-tune processes that help us to serve our customers better. These individuals understand the processes they work with better than anybody else and therefore are more apt to recognize ways to improve those processes."