Coping with the Graying Workforce.

• Author: Van Yoder, Steven
• Position: Human Resources

The post-World War II generation has profoundly shaped modern America on many political, social and economic fronts. As the so-called Baby Boom generation enters its golden years, it will continue to wield tremendous impact, this time because of potentially costly workplace issues that need to be addressed by America's employers.

In 1996, the Baby Boom generation (persons between the ages of 32 and 50) totaled 80 million. As this generation leaves the work force through retirement, its numbers will not be replaced by middle-aged workers moving into their positions or by younger workers entering the workforce. This is due to the fact that 11 percent fewer Americans were born in the two decades between 1966 and 1985 than were born in the 20 years following World War II.

The effects of Baby Boomer retirements on the overall economy and on certain occupations and industries could be substantial: namely, a workforce short on workers and long on retirees. According to consultant Watson Wyatt Worldwide, the aging workforce promises to restructure the economy, reshape the family, redefine politics and even rearrange the geopolitical order of the next century. Just some of the challenges businesses face include:

* Higher taxes, rising capital costs, shrinking consumer markets and perhaps falling tangible asset and equity valuations.

* Tight labor markets and difficulty retaining top-quality personnel.

* Overcapacity in real estate, construction, retailing and other key sectors.

* Intensified competition over shrinking sales that will reduce returns on investment and new pressures for capital controls, non-tariff barriers and outright protectionism.

Unlike many predictions, global aging is no mere hypothesis: its approximate timing and magnitude are already locked in. It is a revolution sure to happen -- and when it has run its course, nothing will be the same.

Older Workers: Norm of the Future

If there is any silver lining to this scenario, it's that Boomers may actually choose or be forced to work longer than their parents' generation. A 1998 study by the American Association of Retired Persons (AARP) concluded that fully 80 percent of Baby Boomers believe they will continue to work during retirement, and only 16 percent expect not to work at all.

Future success depends on the ability of employers to attract and retain the best and brightest from the many different groups. This necessitates a radical reconsideration of prevailing early retirement policies dictating that employees between 60 to 65 years old should leave the workforce. Bonne Bell Go., for example, created a separate packing facility at its Lakewood, Ohio, headquarters for older workers. By offering its "senior" employees half shifts and a collegial work environment, the company has built a highly productive and stable operation - with an average age of 72.

Experts predict that a more porous model of retirement will emerge in the coming years, with workers moving among full-time work, new forms of part-time work and outside activities as the needs of both employees and employers change from month to month and year to year.

The Aerospace Corp offers a range of phased retirement options as a way to maintain its long-term experience in the space program. Older workers continue as employees or consultants at reduced schedules, contributing their skills and experience directly to projects, and transferring knowledge to younger workers.

"Older workers are skilled -- it's like hiring a better worker for a lower cost because their...