The silver lining at Borders

HRM’s Leslie Knudson speaks with Dan Smith, Senior Vice President of Human Resources at Borders Group, about why the retail giant has its eye on staffing its stores with the older demographic category and the unique approaches and benefits involved in employing a ‘silver collar’ workforce.

With the Baby Boomers nearing retirement age, the pending exodus of the whopping generation that accounts for roughly 80 million workers is predicted to drastically impact the composition and productivity of the American workforce.

Not only will the Boomers’ absence produce a shortage of bodies – the U.S. Bureau of Labor and Statistics has estimated that by 2012 there will be demand for 165 million jobs with only 162 million workers available – but it will also lead to an overall skills gap as the older workers will be taking with them a level of skills, knowledge and customer relationship building experience that younger workers haven’t yet acquired.

While most of corporate America is passively bracing for the upcoming shift and sweeping economic impact, Borders has taken a proactive approach to minimize future worker shortage and capitalize on the shifting workforce demographics by driving an initiative to attract and retain workers over the age of 50. With 1200 retail stores and more than 34,4,000 employees worldwide, Borders has strategically positioned itself to reap the benefits of employing this demographic to help ring in store sales.

The aging American workforce

Despite the fact that the first Baby Boomers are celebrating their sixtieth Birthday this year, the generation is poised to challenge the traditional notion of retirement by prolonging their stay in the workforce. What’s driving increased labor force participation today by workers over the age of 50 is a variety of factors including access to healthcare benefits, financial stability, extended life expectancy and personal choice.

The rising trend in aging workforce participation largely comes from weak or lagging medical and pension plans: the lack of stability in traditional employer pension funds and retiree medical benefits, along with the pending rise in age eligibility for social security benefits have led workers to choose to continue working even if only on a part-time basis.

“Most companies don’t offer retiree medical plans or pension plans anymoretoday, and those that do are kind of looking for ways to get outmove away from of them,” says Dan Smith, SVP of Human Resources at Borders. “One of the realities is that when people retire from their first company, they’re not going to be able to truly retire because they’re going to need money or access to healthcare due to the lack of a pension plan or social security. So I think one key element is that people need to work for financial reasons.”

Another key reason the older demographic is choosing to remain actively employed comes from the fact that Americans are living longer and healthier. The average lifespan today is 77 years, which means a longer timetable for retirement. A healthier lifestyle also means older individuals are increasingly demonstrating the desire and ability to stay active and stimulated. Workers are expected to redefine retirement years by actively pursuing their interests and desires rather than idly submitting to the constraints of age as embodied by the traditional definition of retirement.

“People are living much longer these days and starting to retire a little bit earlier so they’ve got a good number of years of retirement. They so people want to stay active,” Smith says. “Part of the Baby Boomer DNA is they want to stay activeremain involved in things, they want to contribute, they have a lot ofmany hobbies and things goalsthey want to do they want to pursue versus what used to be the traditional retirement. When you combine the need to work with the desire to stay active and to keep learning, it’s led to this resulted in a new definition of retirement.”

Benefits of a mature worker

The inherent qualities of a mature worker who has had a great amount of life experience typically translate to a greater amount of knowledge and people skills for a well-rounded employee. With that being said, the older demographic thus offers a level of dependability that is unmatched by younger age groups.

“First it comes down to the knowledge that they have. In addition, and secondly,older employees are typically a lot morevery dependable,” Smith says. “They show up to work everyday. They make good decisions in selecting the job that they selectsuits them as individuals; and they’ve been around the block a couple times, so when they make a career decision, they know what they’re getting into. Overall, better decision-making, stability, customer service and loyalty combined with more knowledge often wraps up into a really great candidate.”

The high level of dependability also translates to reduced turnover rates, which means lower recruitment, training and replacement costs. “Probably the biggest benefit is the turnover of those that are over age 50 is significantly less than those under 30,” Smith says. “You’re six times more likely to lose somebody that’s under 30 than over 50 in a given year and that’s big important because it has training and other cost implications.” involved.”

While the benefits of employing a mature worker based on their personal attributes go apply across most industries, Borders possesses a double-edged advantage as both a retail company and a bookseller. The retail sales environment, with its focus on customer service, has proven to be a strong niche for the older worker who desires a high level of social interaction and community involvement. Combining retail with the universality of bookselling has positioned Borders as an attractive employment option for the mature worker.

“Of all the industries, I think retail makes sense, and within retailing, bookselling makes a lot of sense,” Smith says. “What sells books more so than anything else is somebody’s an employee’s knowledge and willingness to share it. So, , so to have someone that’s well read and experienced a great deal over his or hertheir lifetime, that person is typically is better educatedlikely to be a very valuable to customers and knowledgeable about what it is that we sell in theis available in our stores. The Borders store isOur stores are a type of kind of likea community center and older people tend to enjoy this at community involvement. Other industries don’t have the flexibility that retailers do with schedules that allow an employee to and allowing somebody to work just a couple days a week or odd hours. One of the great things about the retail industry is that stores are open from early in the morning to late at night and they need people all hours and during weekends, so you a job can really fit into somebody’s an employee’s unique schedule better than others.”

Attracting the mature worker

In addition to its natural appeal to the mature worker, Borders has found that its unique variety of benefits have helped attract and retain the older demographic category. The major benefits that appeal to the older worker include flexibility in scheduling, health and welfare coverage, and financial (investment options??)investment optionssecurity. Beyond the three major areas, the older worker is also looking for intellectual stimulation and a connection to the community.

“I’d say the biggest thing is Wwe’ve really consciously shifted our benefits and tried toto appeal to many diverse employee audiences and part-time workers. Older workers in particular often find Borders’ benefits to be of value,” gear our benefits to give something to part-time older workers that they value,” Smith says. “When most companies are walking away from benefits for part-time employeesrs, we’ve added medical, dental and vision benefits for those working as little as one day a week so they have access to a pretty goodan appealing health care plan. Also, the flexibility of the scheduling has been really hugeimportant because it’s okay if somebody wants to be part-time and just work one day a week. And then there is the appeal from of just being a great place to work, offering an environment where people can have fun and just be themselves. Borders is all about openness and diversity. In our stores, people get to be who they areemployees are valued for their individuality and older workers really appreciate that.”

Borders also offers personal access to products through a robust employee discount program and offers a retiree discount policy, which provides lifetime discount to all employees who are over 55 and retire after at least 10 years of service with the company.

Beyond the appeal of its benefits, Borders has engaged in proactive resource planning, active community outreach and targeted mature worker recruitment to get ahead of the worker shortage curve.

One of the most strategic recruitment moves Borders has taken is its affiliation with the AARP National Employer Team program as part of AARP’s Workforce Initiative effort to connect workers aged 50 and over with job opportunities. In 2005, Border was recognized as a featured employer, a designation for companies who offer fair and desirable career opportunities for the older job seekers. AARP has since renamed these companies as national employers.

“The key is getting the word out on the street that you’re interested in those over 50 because not every company is,” Smith says. “Some companies either don’t have the need or don’t see the value. The relationship as one of the featured employersnational employers with AARP has helped greatly. They have a direct link on their website to our site to apply for a job at Borders for those AARP members that are interested in working with us. Those types of things go a long way in helping us to increase the number of applicants that we get that are looking for workattract.”

Boomers at Borders

Borders has witnessed a dramatic shift in their its employee demographics as a result of their its targeted recruitment efforts geared towards workers over the age of 50. In the last six years, Borders’ percentage of employees over 50 has risen from six to 17 percent, with a projection to reach 25 percent over the next three years.

Smith has found that the shifting demographics have fit well with the Borders’ store image and brand personality. “The older demographic matches up with our brand personality really well,” Smith says. “There’s a certain vibrancy to the brand and we have vibrant employees regardless of what age they are. A big part of our brand is to be passionate and knowledgeable which cuts across all ages. Another part is being an individual, which aims at diversity and being who you are and that clearly plays into our higher brand. But a big part of our brand is focused on community and hiring older workers who want to be an active part in their communities clearly fits into that part of our brand as well. So,, so everything about hiring older workers clearly matches up with our mission to be the being the headquarterspreferred place for information and entertainment knowledge and entertainment throughout the world.which is what our vision is.”

Not only does the mature worker naturally fit the Borders brand personality, but it also makes it easier to match customer demographics with employee demographics as more than 50 percent of all book purchases in the retail industrynationwide are made by customers in the over-45 age bracket. Results have proven that Borders stores consistently perform better the more closely the employee base reflects the demographics of the local customer base and the diversity of the surrounding community.

“What we’ve found regardless of age or race or gender, is that if the employees in our stores match reflect the consumer demographics that areof customers shopping those storesin our stores, our sales results are better,” Smith states. “For example, if we have a store in Pico Rivera, California, and 90 percent of the customers coming into that store are is Latino customers, we will see better performance sales-wise if our employee base demographically matches that particular customer base.. If we have an employee base that matches up to that well, our results are better.”

Another key statistic that has been instrumental in Borders’ strategy to tie customer demographics to employee demographics is that the Baby Boomer generation happens to be the most economically powerful segment of consumers in the country with 70 percent of the total economic buying power.

“The Baby Boomers are a force as it relates to buying product in America,” Smith states. “We know that over half of our book purchases in the industry come from those that are over the age of 45 so if we’re going to really cater to that customer – and they are our customer – then we have to have people in the stores that think like them, look like them, act like them and that’s clearly part of our strategy.”