The aging baby boomers - impact of post-retirement employment on companies

HR Magazine, April, 1997 by Maureen Minehan

Fifteen years from now, the first of the baby boomers will turn 65. By 2025, when most of them will have surpassed the 65-year mark, 62.2 million Americans will be classified as senior citizens, up from 33.6 million in 1995 and a projected 40 million in 2005. The aging of this generation will have serious consequences for employers as the number of older Americans remaining in or returning to the workforce increases.

Workforce planning will become even more difficult for HR professionals if older workers no longer retire at traditional ages. Middle-aged workers could become frustrated as positions normally vacated through attrition remain filled, making advancement difficult. However, creating new positions to accommodate both older and middle-aged workers will be risky - at some point the large number of older employees will retire, and, because the next generation is much smaller, workers with the skills and experience to fill the open positions may be scarce.

A workforce composed of more older workers will also have different benefits needs than one dominated by young or middle-aged employees. Long-term care insurance could become a frequently requested benefit. Employees with diseases common to old age will require adequate insurance coverage for vision care, hearing loss, arthritis and cancers. In addition, because one of the fastest growing segments of the elderly population is the "old old" - those over the age of 85, who are in greatest need of assistance and supervision - many older workers will still have elder care responsibilities, making elder care programs a priority.

Compensation practices also may change as employers seek to reduce costs by linking pay to performance rather than seniority. During the recent era of downsizing, mid-level and senior management positions - typically occupied by employees with longer tenure and generally higher salaries - were eliminated at a greater rate than those occupied by less experienced employees. Switching to a pay-for-performance compensation system is one way to make mid-level and senior management positions less vulnerable to budget cuts.

There are several steps HR professionals and other managers can take now to prepare for the higher percentage of older workers in the future:

* Obtain demographic projections for your organization's area to see if older Americans are expected to make up a significant percentage of the local population in coming decades.

* Establish a strategy to recruit older workers that recognizes their needs. Traditional benefits and enticements may not be appropriate.

* Offer accommodations for older workers. Amplified telephones, large-print documents, orthopedic and ergonomic furniture, and wellness programs, for example, will help older workers perform their jobs well.

* Include age issues in your organization's diversity training. Both older and younger workers worry about intergenerational conflict in the workplace - especially when younger employees have authority over older employees. Appropriate training will help alleviate those concerns.

For more information on these and other emerging issues, please visit the Issues Management Program section of SHRM's Home Page on the World Wide Web (http://www.shrm.org//issues.htm).

Maureen Minehan is issues manager for the Society for Human Resource Management. Her e-mail address is maureen@shrm.org.