Re-Inventing Retirement: How Boomers Will Impact Business and Industry

1. Re-Inventing Retirement:How Boomers Will Impact Business and Industry BPW/USA National Conference July 20, 2006 Emily Allen Director, AARP Workforce Programs

2. The Statistics • The Baby Boom generation, now 77.5 million people strong, represents the largest single sustained growth of population in the history of the United States. • A study of the Baby Boom generation suggests that rather than being the homogeneous monolith suggested, one key characteristic of this cohort is its diversity. • This diversity also translates into their visions of working. Most (8 in 10) report they intend on working past traditional retirement age for varying reasons. • However, need (money, benefits, etc) over “engagement” is increasing as a reason for individuals to remain in the workplace. • By 2010, 1 in 3 workers will be over the age of 50.

3. Boomers and Work As the 50+ workforce have wide ranging interests and expansive skills sets, it is not surprising that those who plan to work expect to engage in a broad range of fields and in some cases, eagerly anticipate trying something new. • 1 in 4 who plan to work say they expect to find employment that is entirely different from the work they do now or did in their worklife. What Kind of Work Will They Do? • Professional specialties • Teaching • Retail Sales • Office Support • Consulting • Nursing and other health related services From AARP’s Staying Ahead of the Curve, 2003

4. What Does This Mean For Business? The boomers will reinvent "retirement," working longer either because they want to or they need to. Older workers offer businesses a unique combination of experience, loyalty, enthusiasm and a strong work ethic. As the workforce ages, businesses that know how to recruit and retain mature workers will gain a competitive edge. According to HR Professionals, workers 50+…. • Add diversity of thought / approach • Are loyal to their employer • Take work seriously • Are willing to work different schedules • Have a strong work ethic

5. From Statistics to Action: Building the Business Case for the 50+ Worker • PRODUCTIVITY CAN BE SUSTAINED OR INCREASE WITH AGE: While data on productivity is not complete, there is mounting evidence that 50+ workers can sustain productivity, creativity, and motivation • EVALUATE TOTAL LABOR COST: To build an effective business case, companies need to evaluate labor cost holistically, including costs of turnover • ENHANCING RETENTION OR ATTRACTION HAS ONLY MODEST COSTS: The business case analysis looks at the impact of retaining more 50+ workers or attracting more 50+ workers, and found that cost differences can be 3% or less for retention and only 1% or less for attraction • SOME BRAND NAME COMPANIES ARE LEADING THE WAY: These companies are demonstrating out of the box thinking to leverage the 50+ workforce including attraction, knowledge management, phased retirement or rehiring retirees strategies.

6. EMPLOYEE MOTIVATION TENDS TO INCREASE WITH AGE: • The level of older workers’ motivation to exceed expectations increases with age overall and in three of the four industries reviewed (less clear in retail) • Motivation is correlated with levels of “engagement” (i.e., higher motivation related to willingness to invest discretionary effort in work) • Companies with more highly engaged employees outperform their industry peers on a range of key business and financial measures

8. Key Focus Areas for Recruitment and Retention • Age Diversity and Fairness • Flexibility • Good Benefits • Good Work Environment • Training and On-going Development Opportunities

9. For more information: AARP.org/employerresourcecenter