To Raise Boomer Retention, Firms May Have To Update Benefits

What do you say if your business-owner client decides that retaining boomer employees will help increase the value of the business he wants to pass on to his heirs?

Increasing wages and salaries may be one obvious solution, but experts say a less expensive strategy may be to focus on improving, or simply maintaining, the quality of group medical insurance and other health benefits, such as dental insurance and vision care insurance, to help a business stand out at a time when other employers are skimping on benefits.

For decades, many private employers have done all that they could to drive older workers away without facing penalties for blatant age discrimination.

Today, the tide may be starting to turn.

Boomers make up more than 40% of the U.S. work force, and years of hiring freezes have weakened the flow of bright young newcomers in many fields.

Because of the aging of the boomers, the number of U.S. workers in the 35-44 age category probably will be 10% lower in 2010 than it was in 2000, while the number of workers in the 45-54 age group will grow 21%, and the number in the 55-64 age group will grow 52%, according to the federal Bureau of Labor Statistics.

Workers over age 60–members of the Silent Generation–are less likely to have college degrees than younger workers, but boomers are about as likely to have college degrees as younger workers, and many have other attributes–such as a proven ability to close sales–that may make them hot commodities even in a cool economy.

For now, “some companies are facing a skill shortage,” says Lorrie Foster, director of research working groups at the Conference Board, New York, a management think tank that recently published a study on the mature worker. “But it depends on the company,” she says. “The situation varies industry by industry, case by case.”

In the future, interest in retaining boomers’ skills and contacts is likely to grow, experts predict.

At Lincoln National Corp., Philadelphia, for example, managers have discovered that many clients feel more comfortable discussing financial issues with mature advisors. Lincoln has responded by setting up a task force to develop ideas for recruiting and retaining older workers.

One indicator of employer interest in the aging of the work force is the performance of the Conference Board’s mature worker. The group is getting many calls about the study and is already planning to develop another report about the work force, according to Foster.

Keeping qualified boomers in hot fields may not necessarily be so much easier for the employer than dealing with gluts of workers in times of slumps: 19% of U.S. workers ages 45 and older say they are likely to look for new jobs in the coming year, according to a survey commissioned by AARP, Washington.

A good benefits package can be critical to efforts to retain boomer employees, because employers can use their access to rich, guaranteed-issue products, such as rich major medical insurance packages and top-quality long-term disability insurance policies that may be available to highly skilled boomers who strike out on their own as self-employed consultants.