Gray Is Good

Employers Make Efforts to Retain Older Employees

Excerpts by Sue Shellenbarger
From The Wall Street Journal Online

Traditionally, many employers have viewed older workers as inflexible, less productive than their younger colleagues, and more expensive because of higher salaries and health-care costs. When hard times force layoffs, older workers are often the first to get the ax. But now, many employers are at least giving lip service to retaining older workers. And a few are taking concrete steps to actually do so -- seeking out older workers and retirees with needed skills, rooting out age bias, and setting up complex flexible work arrangements tailored to their needs.

For employers, the writing on the wall is hard to miss.

•  Workers 55 and over are growing four times faster than the work force as a whole.

• By 2012, this age group will account for more than 19% of the labor force, up from less current 16%.

• Bureau of Labor Statistics data show. In the same period, people in the prime working years, ages 25 to 44 will shrink to 43% of the work force from the current 46%.

Companies are recognizing that older workers are repositories of hard-to-replace knowledge critical to their businesses, says Eric Lesser, an associate partner in Cambridge, Mass., with IBM Business Consulting Services. As workers retire, companies worry about losing relationships with suppliers and distributors, as well as the ability to maintain aging equipment, such as plants, machinery or other gear built to past standards, he says.

As the work force ages, so do the customers, who often prefer to deal with older workers. At Home Depot, older employees serve as a powerful draw to baby-boomer shoppers by mirroring their knowledge and perspective, says Dennis Donovan, executive vice president, human resources, for the 2,000-store retailer. Similarly, Westpac Banking Corp., a big Australian financial-services concern, recruited 950 over-45 workers as financial planners, among other roles. Older clients, a spokeswoman says, prefer advisers with experience.

The new attitudes come as age-discrimination complaints are falling. Although some serious cases do remain, preliminary Equal Employment Opportunity Commission data show age-discrimination complaints to the commission decreased 7.1% in the year ended 2005 to 16,577. That would constitute a 13% drop in the two-year period since 2003, likely reflecting, at least in part, a tightening of the labor market.

At Stanley Consultants, an 1,100-employee firm where more than one-fourth of employees are over 50, older workers are encouraged to continue part-time. Some run brown-bag training lunches for co-workers, says CEO Gregs Thomopulos. The company keeps in touch with its pool of retirees; seven were recruited recently to help out with an Iowa project.

Some companies are plying new tools to stamp out age discrimination. At Baptist Health South Florida, a six-hospital concern with 11,000 employees, a three-member "long-service review committee" oversees any layoff or restructuring that affects a worker with more than 15 years' tenure, says Brian Keeley, president and CEO. In one case, a 60-year-old manager was at risk of losing his job when his unit was restructured. Committee members stepped in and delayed outside recruiting for any vacancies until the manager found a new position.

Deere & Co., Moline, Ill., where 35% of 46,000 employees are over 50, has developed its own mandatory manager-training program in-house, specifically to combat age discrimination, says Rick McAnally, Deere's director, global diversity and talent management. Some 1,200 managers at the agricultural-equipment maker took the course last year.

Other companies are offering the extreme flexibility prized by older workers. ASDA, a British unit of Wal-Mart Stores, allows employees to take "Benidorm Leave" -- up to three months' unpaid time off, named for a Spanish resort popular with older people in the winter, says spokesman Nick Agarwal. Baptist Health allows employees to take leaves of as long as five years without losing seniority. While such benefits are available to all workers, older workers tend to use them more often.

Home Depot, Atlanta, caters to "snowbirds" -- older workers who migrate between North and South with the seasons -- by allowing them to transfer from store to store without re-applying, Mr. Donovan says. The company also provides full benefits to part-timers, another way to ease into retirement.

Other companies are making phased retirement more-broadly available; this allows workers to slowly shift out of the work force, cutting their hours for a while before retiring. Principal Financial Group, Des Moines, offers a "Happy Returns" program through a temporary-help agency, enabling employees to retire, begin drawing on pensions, and return to work as temps, says Mindy Moss, second vice president, human resources. Baptist Health permits workers over 59½ years of age to tap their retirement accounts while still working for the company.

A few employers are creating a culture where workers feel safe volunteering information about retirement plans in advance -- a step that makes it far easier to transfer and retain older workers' knowledge, says Deborah Russell, director of work force issues for AARP, Washington, D.C.

John Peterschmidt, 66, a former graphics chief at Stanley, started talking about retiring six years ago -- even though he didn't retire until earlier this year. In the interim, he worked full-time for a while, then part-time. Although his bosses knew he was on the way out, "I didn't experience any different treatment," he says. "I've grown to trust our management."