What's New

  ·   By Greg Ryan, Boston Business Journal   ·  Link to Article

Gray matters: An aging workforce has Mass. companies scrambling to deal with ‘silver tsunami’

Michael Tamasi is so desperate for young workers at his Avon manufacturing plant, he’s resorted to recruiting fourth graders. Seriously.

Usually, it’s high school kids he shows around. But earlier this year, the CEO of the precision-machining company AccuRounds Inc. brought in 150 fourth graders to tour the facility. The goal is the same whatever the age of his guests: To drum up interest in manufacturing among youngsters and prepare the company for a future when the majority of his employee workforce has aged out. The average age of an AccuRounds worker today is 47 years old. Two decades ago, it was 40, Tamasi said. About a fifth of employees are now over the age of 60, he said. Roughly half are over 50.

It’s not just AccuRounds. The state’s entire labor pool is graying — a phenomenon local economists have called a “silver tsunami.” In 2005, 57 percent of Massachusetts adults were 25 to 54 years old, the range considered to be prime working age, according to U.S. Census Bureau data. By 2014, that number had fallen to just under 50 percent.

States nationwide are undergoing similar changes. But that doesn’t ease the pressures felt by Massachusetts businesses.

When companies can’t adequately replace retiring employees, it restricts growth. They have to spend more time and money finding and training new workers, a task made tougher by the state’s low unemployment rate. The Bay State’s manufacturing, technology, health care, retail and hospitality sectors are especially feeling the crunch, according to economists.

The problem is serious enough that, in a worst-case scenario, it threatens to drive away businesses from Massachusetts to places like North Carolina and California, said Northeastern University public policy professor Barry Bluestone.

“What I worry about is that firms may begin to look to relocate to where there is a greater labor force,” he said. “It’s a grim picture if you’re an employer trying to figure out how to replace an aging workforce.”

Millennials to the rescue?

The trend lines aren’t all bleak. Often derided as smartphone-obsessed layabouts, millennials have helped to counteract the stress on the workforce caused by their parents and grandparents. Last year, millenni als — defined as those born between 1981 and 1997 — passed Baby Boomers as the country’s largest living generation. As the youngest millennials enter the labor pool, they are expected to help replace retiring Boomers.

The problem is that the generations that sandwich millennials aren’t particularly large. It’s essentially a wash: In 2030, there will be roughly the same number of working-age people in Greater Boston under the age of 65 as in 2010, according to projections from the Boston-based Metropolitan Area Planning Council.

What’s more, just because more millennials are entering the workforce doesn’t mean they’re ready to fully replace their older peers. At AccuRounds, it’s grown harder for Tamasi to find younger workers who can step into a retired employee’s role without any slippage in productivity. As a result, the company is leaving business on the table today.

“We’re throwing away opportunities because we don’t have people to fill certain roles,” Tamasi said. “If we had experienced people on the night shift, we could have people working longer.”

Companies such as AccuRounds are helped by the fact that people are working longer than they once did. That’s especially true in New England. From 2007 to 2015, the percentage of people 65 or older who were either still working or actively seeking work grew at a faster clip in New England than it did nationwide, the Federal Reserve Bank of Boston’s Mary Burke found last year.

Leaving aside momentarily whether those people actually want to work, their longevity has eased the squeeze for many companies. Still, it’s no panacea. It’s harder for businesses to plan for the long term if a large chunk of their employees could retire at any time. Older workers face greater health issues, and in physically demanding jobs, they may be more at risk of injury, economists say. Either way, it’s missed work time.

No fountain of youth

Economists and policy experts identified two major ways to make the state’s workforce younger: Bring in foreign immigrants, and better educate students so they’re equipped for jobs in those industries that most need workers. Neither will be easy.

Only five states have welcomed more foreign immigrants this decade than Massachusetts, U.S. Census Bureau estimates reveal, and yet the state still grapples with an aging workforce. More than two-thirds of the Bay State’s net population growth since 2010 has come through immigration. The rest is through births. Other states have not been a source of growth. In fact, since 2010, Massachusetts has lost an estimated 72,600 more residents to other states than it’s brought in.

In short, if the state wants to get significantly younger in the short term, it needs more immigrants. However, President Donald Trump’s immigration policies are aimed at barring more immigrants from coming ashore. Last week, the president pushed a plan that would cut legal immigration by half in a decade’s time.

“When I talk with employers, one of the things they’re quite worried about is Trump’s immigration policies,” Bluestone said.

It ‘keeps us up at night’

If Massachusetts can’t grow through immigration, it becomes all the more important for the state to educate its own young people. By some measures, Bay State schools rank among the best in the country. But to truly meet companies’ labor needs, schools in every corner of the state, including economically challenged cities like Fall River or Lawrence, need to improve, experts say.

“In many of our urban communities, K-12 school districts don’t always meet the challenge required by our modern economy,” said Michael Goodman, executive director of the Public Policy Center at UMass Dartmouth. “We need to close that urban achievement gap. It’s quickly becoming an economic imperative.”

That imperative is being addressed in many ways, none of them a magic bullet, experts say. The state has put more of an emphasis on vocational schools. Progressives are looking to increase education funding through higher taxes on millionaires. Massachusetts businesses are getting into schools to foster interest in science, technology, engineering and math (STEM) skills, including through the state’s STEM Advisory Council.

Marcy Reed, president of National Grid in Massachusetts, sits on the council. “I describe our workforce as the one thing that keeps us up at night,” she said.

National Grid faces a glut of retirements in Massachusetts, and considering that an overhead line worker needs about seven years to learn to do the job well, Reed said, it’s essential that National Grid stock its pipeline with young talent now, before that wave of retirements hit.

To that end, the company has gone on a hiring binge, bringing aboard nearly 3,000 people last year even as it lost close to 2,000. The new workers don’t have all of the skills they will need yet, but National Grid is taking its time developing them. Since 2013, National Grid has moved its Massachusetts workforce’s average age from 47 to 45, Reed said.

AccuRounds’ Tamasi has also gotten heavily involved with STEM and other economic development groups, in addition to the tours of his plant. As for those fourth-graders, they seemed excited by what they saw, he said.

“They wouldn’t stop asking questions,” Tamasi marveled. “I got letters from a lot of them saying, ‘I want to be an engineer.’ ”

More News Clips