From the October 2009 issue of Ceridian Connection.

For the last 30 years, the baby boomers -- those born in the United States between 1946 and 1964 -- have made up the largest slice of the labor force. But as these boomers get older, business leaders must prepare for a world of change.

As boomers age, employers face new challenges
Employers are beginning to see a large portion of their workforce approach the traditional retirement age of 65. If these boomers retire on schedule, employers will be hard-pressed to replace them -- the numbers of Generation X and younger workers are not sufficient to fill their shoes. Beyond the sheer numbers, the knowledge gap left by a wave of departing boomers could be crippling to an organization. But boomers aren't approaching retirement the way their parents did. Many expect to stay in the work force after age 65 -- some because of underfunded retirement accounts and others to remain engaged in activity they find fulfilling.

Financial need is the primary driver delaying retirement at the moment. According to the Employee Benefit Research Institute's 2008 Retirement Confidence Survey, the number of Americans who are very confident in their ability to afford a comfortable retirement has declined sharply, from 27 percent in 2007 to 18 percent in 2008 -- the largest one-year decline in the survey's 18-year history. But employers can't count on that for the long term. Nor should they aim to retain only those older workers who can't afford to retire. The goal should be to retain workers who add value, while facilitating knowledge transfer and developing all workers to be able to meet changing business needs.

During the period from 2006 to 2016, the number of workers age 65 and older is predicted to soar by more than 80 percent. -- U.S. Bureau of Labor Statistics July 2008

The relationship between aging workers and employers is about to change dramatically -- and it's time to get prepared. "Employers of all kinds will need to rethink their attitudes toward older workers," says Hal Morgan, director of Ceridian LifeWorks Communications and Content. "Organizations are reexamining a range of established practices. Just as employers adapted to the unprecedented entry of women into the workforce in the second half of the 20th century, so they will need to adapt to this equally momentous demographic shift."

Morgan explains that three distinct trends will develop as a result of the aging workforce.

• The number of employees with eldercare responsibilities is rising significantly and will continue to rise.


• Retirement policies and practices will change as employers seek to retain older workers and as baby boomers redefine the nature of retirement.


• Older workers will weigh their options and seek work that is both financially and personally rewarding.

Elder care is a business issue
Estimates of the cost to U.S. businesses in productivity lost to caregiving range from $11.5 to $29 billion a year. And over the next decade, the number of employees caring for older relatives is expected to double. This has serious business implications, because employees who care for older family members take time from work to deal with care issues, pass up promotion and training opportunities, reduce contributions to their own retirement savings and sometimes give up work entirely.

Growth in the number of employees with elder care responsibilities will certainly have an impact on productivity. That's why Ceridian Work-Life solutions deliver industry-leading resources and services that help employers and employees alike.

Policies and practices are sure to change
The days of employees retiring at age 65 and shifting to a life of leisure have all but disappeared. A large majority of baby boomers -- and younger workers as well -- are seeking jobs that offer flexible work hours and work weeks. Boomers also want the ability to take extended breaks from work throughout the year.

There is a gap between these expectations and the reality of corporate policies. Cindy Matalamaki, Ceridian LifeWorks marketing manager, points to a study by Watson Wyatt Worldwide that found only 16 percent of companies currently offer phased retirement programs that encourage continued employment of older workers. "Instead," she says, "it's more common for company policies to penalize workers for cutting back to part-time work or for continuing to work after age 65. The unintended penalties include eliminating benefit coverage for part-time work or reducing pension payouts for workers over age 65."

Matalamaki believes that HR policies and practices will undergo substantial change as employers redesign work to appeal to older people and that those employers who take action now will have a competitive edge. "Change can be difficult," she says. "But Ceridian LifeWorks Change Management solutions are particularly valuable for employers who want to keep productivity high and deliver substantive help to their aging workers."

Rewarding and retaining older workers
"When you're designing benefit and reward packages," says Morgan, "knowing what matters to specific employees is critical to business outcomes. Consider generational differences in employee needs and motivations. You want to be able to provide choices that are aligned to age."

To motivate older workers, show respect for their experience, hard work and perseverance. "Baby boomers want recognition from management that their contributions are valued and unique," Morgan says. "They want to be rewarded for their work ethic and long hours. And they value opportunities to mentor younger workers -- which happens to be one of the best ways for a company to retain organizational knowledge."

Take action to prepare your organization for the changes ahead as the workforce ages. Ceridian Employee Retention and Productivity offers industry-leading solutions that can make a real difference in the face of unprecedented change.