EmploymentDigest.net

Graying Work Force

Posted on 28. Nov, 2005 by Bill in Employment News

GRAYING WORK FORCE

Joseph Louro might be the picture of what retirement will look like in New Jersey.

A builder for almost 40 years, the 70-year-old Louro continues to work three days a week for Cohen Schatz Associates in Shrewsbury, selling land to developers.

Could he call it quits altogether instead?

“The answer is, yes. But not if I wanted to maintain the lifestyle to which I was accustomed,” Louro, of Freehold Township, said. “It’s expensive in New Jersey. And I would not have been able to clip coupons and live happily ever after.”



Louro’s situation is likely to become more common. Employers are bracing for a labor shortage as the baby boom generation ages and retires. With not enough workers to take their place, experts say employers will have to take steps to keep older employees on the job — at least on a part-time basis.

It comes at a time when many workers find they don’t have enough money — or health insurance benefits — to retire.

One solution: a phased-in retirement in which workers gradually work fewer hours and less demanding jobs rather than quit cold turkey.

“A number of employers are trying to encourage people to stay . . . because the large baby boomer generation is getting ready to retire and a lot are worried about how they will replace them if they stick to traditional (retirement) schedule,” said Robert C. Carlson, author of the book, “The New Rules of Retirement: Strategies for a Secure Future.”

The baby boom generation is the largest in American history. It includes 76 million Americans born between 1946 and 1964. And it begins turning 65 in six years.

The demographic shift could put employers in a bind. The following generation, born between 1965 and 1980, has just 46 million people, which threatens to force employers to scramble to find replacements for retirees.

Some companies are developing programs to address the looming problem. Principal Financial Group, a financial services company based in Des Moines, Iowa, offers several programs to retain older workers, spokeswoman Rhonda Clark-Leyda said.

It offers workers caregiver leave in which employees can work part time up to 12 weeks to care for a family member and still receive full-time benefits. And it offers a program called Happy Returns, in which retired employees can return as consultants. Since workers can’t collect both a salary and a pension at the same time, Principal Financial Group hires the workers back through Manpower, an employment agency, Clark-Leyda said.

“As the work force ages, there will be a continued need for workers, and these workers are experienced, seasoned. They have a lot of prior knowledge and skills,” she said. “And that leads to a second reason: It adds to diversity of the workplace.”

Working past age 65 once was common. In 1950, about half of men 65 and older were in the labor force. But as companies offered pensions and the government offered Social Security benefits, older workers had the financial security to leave the work force altogether, said Robert Clark, an economics professor at North Carolina State University.

By the mid-1980s, just 16 percent of men 65 and older were in the labor force. But that figure has begun to shift. Now, 19 percent of men in that age group work, Clark said.

The reason stems mainly from financial concerns, Carlson said. Many companies, for example, switched from a pension plan in which workers were guaranteed retirement income to defined contribution plans such as 401(k) plans in which workers were expected to save for their own retirement.

The stock market’s collapse in 2001 and its lackluster performance since then have hurt the retirement plans of many workers, Carlson said.

The result: more older workers are amenable to working at least part-time after reaching retirement age.

“What’s starting to evolve with a number of companies are policies that allow people to go from a 40-hour work week to 30-hour to 20-hour work week,” said Bob Wright, principal of Mercer Human Resource Consulting in Philadelphia.

It’s not an easy transition. Companies still need to follow Principal Financial Group’s lead and navigate federal law which prohibits workers from collecting a salary and pension at the same time, Wright said.

But it makes sense for retired workers such as Louro. As he approached retirement, it became clear his savings and Social Security wouldn’t be enough to maintain the standard of living he and his wife, Frances, wanted.

The couple didn’t want to move to a more affordable state; Their five children and 17 grandchildren live within a short drive of their home at the Riviera at Freehold, an adult community for people 55 and older. And Louro still felt young enough to work — aside from a creaky knee that recently was replaced.

“People I know who are active seem to do better than people who are sedentary, and I don’t want to be home watching TV all day,” he said. “I intend to keep working as long as I can.”

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