The long-awaited retirement of the hordes of 76 million baby boomers born between 1945 and 1964 has begun. But some employees aren’t ready to say goodbye to their cubicles or labs, and some companies don’t want to lose valuable employees. The golf cart, cabanas, and sun tan lotion may just have to wait.
In 1985, 10.8% of people over 65 worked full-time or part-time. By 2011, that figure rose to over 18%, according to the AARP Public Policy Institute.
Baby boomers who decide to leave the workforce offer an opportunity for younger staffers to move up in the ranks. But at pharmaceutical, technology and engineering companies, losing experienced employees can lead to a thinning of human resources, or brain drain.
In a recent AARP survey of 1,000 human resources directors, 69% said that their companies are looking to keep older workers as part-time workers and consultants and 46% are trying to entice older workers to stay as full-time employees.
Keeping baby boomers on staff has its drawbacks as well. This strategy can “delay younger workers from moving up into upper-management level jobs and delay their development as leaders. It creates a bottleneck in these organizations,” explains Peter Rodriguez, an associate professor of economics at University of Virginia’s Darden School of Business.
Abbott Laboratories (ABT), based in Abbott Park, Ill., introduced a “Freedom to Work” program in 2008 with the goal of retaining staff members 55 years and older with 10 years experience to ease the negative effects of a retirement exodus. Every year, 200 Abbott employees, from sales reps to IT staff to research scientists, participate in the program, and they receive full benefits and adjusted pay, explains Lesli Morasco, director of benefits at Abbott.
Abbott staff can opt to work four days a week or managers can return to work on a more relaxed schedule, says Morasco. Employees who participate in the program have the option of mentoring and training other staff members or continuing to work on projects.
Morasco argues that this program doesn’t thwart junior staff from moving up, and in fact, could even help younger employees advance. Being mentored by a senior scientist “helps someone up and coming take on bigger projects.”
Take Dave Stroz, a 63-year-old laboratory manager at Abbott, who could have retired three years ago but opted to stay on and work four days a week. He didn’t feel ready to retire and was concerned about the uncertainty of his 401k.
Now Stroz has a three-day weekend and takes photography classes on Friday. He trained a junior scientist in trace analysis, which involves the monitoring and measurement of very small quantities of materials in the clinical trials of testing drugs. “I used to be the go-to guy for trace analysis; now I’m the number two guy,” Stroz says.
Before he decided to keep working, he talked with his manager and colleagues to make sure there would be no resentment if they had to pick up the slack when he was off on Friday. All encouraged him to stay on. “When I’m ready to retire, I’ll know it,” he says.
Having a researcher who has been at a company 25 years mentor and train a new scientist can often speed up the amount of time it takes for a new employee to get his or her bearings, says Marcie Pitt-Catsouphes, director of Boston College’s Sloan Center on Aging & Work.
Many companies are looking to keep specialists like scientists, researchers and engineers on staff, says Brad Lawson, president of Your Encore, which arranges part-time, project and consulting work for retiring baby boomers at companies like Procter & Gamble (PG), General Mills (GIS), and Boeing (BA). “There just aren’t enough scientists and engineers to go around,” he says.
But hiring baby boomers part-time can also “delay the inevitable, the need to develop new talent. There are benefits to having freshly trained scientists who bring new techniques, energy and creativity to advance organizations,” says Rodriguez, the Darden economics professor.
The MITRE Corporation, a McLean, Va.-based non-profit engineering firm that works with the federal government, has seen positive results from offering their employees the option of easing into retirement. It introduced a phased retirement program in the early 1980s, says Bill Albright, its director of worklife and diversity. Starting at age of 59-and-a-half, MITRE employees can work part-time at least 20 to 30 hours a week and still draw their retirement funds.
Employees stay connected with the firm and yet “not take the leap into full retirement,” Albright says. “We’re an IT high-tech firm, and this provides another way to hold on to this talent.” Most continue in the program for two to three years before deciding to fully retire, though some people in their seventies continue to work at the company.
These programs aren’t only for engineers and researchers. Recently, one airline manufacturer, says Your Encore’s Lawson, brought back several assembly line workers to train younger employees. Retired executives have also been recruited for temporary positions to revive a company’s business. For example, Lawson cites one large pharmaceutical client, which acquired a smaller biotech company and brought in a retired senior exec to provide guidance in meeting regulatory requirements.
But as the stock market dips and rises, money concerns may drive more baby boomers to work longer. And Pitt-Catsouphes says that for many workers “indulgence isn’t satisfying,” and playing golf seven days a week won’t sustain them.