More Minnesota factories convincing employees to work past 65

Roger Klug started talking about retirement as he neared age 65 a few years ago, but his bosses wouldn't hear of it.

Klug had been the 13th employee at the company, Alexandria Industries, when he joined in 1971. He had unique skills from the start, when he was the only one who "corrected" aluminum extrusion molds by grinding away precise slivers — by hand — until the mold met specifications. Over the years he excelled at picking up the newest technologies.

In a tight labor market with accelerating baby boomer retirements, his experience made him too valuable for the company to lose. He eventually agreed to a two-day workweek, with more days filling in for vacationing co-workers.

Staying "was a very good thing to do because I enjoyed my job," he said. "I didn't want to be working full-time on one day and doing nothing the next."

Hanging on to talented older workers steeped in institutional knowledge has become a critical issue for many manufacturing businesses. About 78 million baby boomers are nearing or at retirement, and the National Association of Manufacturers (NAM) estimates that factories will need 3.5 million new factory workers in the next 10 years just to keep production lines and distribution routes going.

The workers, experts say, are not there right now. In fact, factories are struggling to grow because they don't have enough well-trained staffers. The shortages are already acute in manufacturing.

The Society for Human Resources Management (SHRM) found that 19 percent of factory employers like Alexandria Industries, Harmony Enterprises and Dotson Iron Casting now float the idea of phased-in retirements by asking senior employees to stay, work fewer days or adopt more flexible hours. That's up from 12 percent four years ago.

"There has been a definite increase in informal phased retirement programs over the last five years," said SHRM spokeswoman Kate Kennedy.

Lynette Kluver, Alexandria's organizational development director, said the 550-worker company has 56 experienced workers nearing retirement and is trying to steer them into job-sharing or part-time work, even consulting or mentoring.

"Boy, if they are willing, we sure are willing," she said.

The Sloan Center on Aging & Work at Boston College found that other firms go further. Some have started to retrofit production lines with older workers in mind.

They've installed assembly tools that reduce reaching and moved supplies closer to staffers so older machinists and assembly workers can save knees and backs. Some trucking firms have even made ergonomic changes to truck cabs so desperately needed drivers are comfortable and stick around, said Sloan Center co-director Jacquelyn James.

Retaining older workers "is something we have been encouraging for a long time."

A decade ago, BMW realized a fifth of its German employees would be age 65 by 2020. It started a pilot program to retrofit one auto plant in Germany. Managers enlarged type on factory computers, installed ergonomic assembly tools and replaced concrete floors with wooden ones that were kinder to feet. They bought workers better shoes and had physical therapists retrain line workers on safer ways to move. With the changes, pros with seniority stuck with jobs longer. BMW spread the pilot program to other plants.

"BMW is still talked about as the shining example of an employer looking ahead and seeing what was coming down the pike and doing something that was very effective," she said.

The lesson's not lost on Dotson Iron Castings. The Mankato foundry recently had 15 of 140 employees retire and has several more who are approaching age 70. To boost retention, owner Denny Dotson and CEO Jean Bye recently oversaw the installation of robotic lifts so workers no longer have to haul 50-pound castings to de-burring machines. They bought new tools to get workers farther from the 2,400-degree furnace. They also rotate people through jobs every two hours to lessen repetitive injuries.

"We invested in the jobs that are physically hard," Dotson said. "Our goal is to make sure [our staff] can work as long as they want and retire comfortably without being [broken]. We have to invest in this. Obviously, when you have people with talent, you will be accommodating."

Employment pros predict more factories will follow suit. They may not have a choice. NAM estimates that in the next 10 years the country will need 3.5 million more factory workers on top of the 12.3 million that exist today in a labor-stressed industry that generates $2.2 trillion in revenue a year.

In Minnesota, Abbey Hellickson, business growth consultant for the Minneapolis-based manufacturing consulting firm Enterprise Minnesota, said midsize manufacturers are brainstorming to slow the pace of retirements.

"The labor shortage is definitely driving this," she said. "Employers once really had the pick of who came to work for them and didn't struggle to get workers. But today [the tight labor market has] put a strain on employers."

That's why Ultra Machining in Monticello has de-emphasized 65 as a retirement target, said President Eric Gibson. "We have discouraged workers from retiring," he said. "We need more qualified employees. We are short of good help."

Ultra Machining has three employees over 70 and more right behind them in age who run high-powered robots, lathes and drills that convert chunks of steel into implantable spinal cages and knee replacement parts. As long as these workers are happy and productive, Gibson is thrilled to have them, he said.

Enterprise Minnesota CEO Bob Kill said such thinking marks a shift.

"Owners are much more cognizant about having these conversations early. ... It's vital to keep your experienced people longer than you would have historically," he said.

Kill is putting his money where his mouth is. When his top manufacturing consultant, Dick Pedersen, 77, mentioned retirement three years ago, Kill immediately asked him to go part-time instead.

Now Pedersen works 20 hours a week, which allows him to travel and take long weekends with his wife while staying engaged with clients such as Harmony Enterprises, Cardsource and 28 others in Rice and Steele counties.

"I keep telling them about the demographic shifts we have in Minnesota," said Pedersen, a former Cybex engineer. "I ask the owners, 'What are you doing about trying to keep your skilled workers?' … Often the owners say, it's going to create a really big hole."

Dee DePass • 612-673-7725