Age 55 no longer means retirement is on the horizon. From the recent downturn in the stock market, which has taken a bite out of many people's 401(k) retirement savings, to the prospect of living longer, people are staying in the workforce beyond the traditional retirement age.

If they have already retired, a decline in their investment portfolios or the desire to be more active may prompt these individuals to return to the workforce. The increase in the number of older workers is not a temporary phenomenon. It is a trend likely to continue into the future.

"Many baby boomers will have no choice but to stay on for two reasons: One, they are going to need the money and, two, too much of their life is ahead of them--physically, emotionally and motivationally," says Bruce Douglas, a consultant on aging workers and an oral and maxillofacial surgeon who recently returned to practice after 14 years in retirement.

Demographic changes will continue to have a major impact on the U.S. workforce. Government statistics show that while there were 18.4 million workers over age 55 in 2000, older individuals in the workforce will jump to 31.9 million by 2015. In addition, older workers will make up an increasing proportion of the overall workforce as there are fewer younger workers entering the job market to fill vacancies from retiring workers.

More older workers on the job is ultimately good news for employers that face a likely "experience shortage" as boomers--the largest demographic in the population--age.

For some companies, in fact, older individuals and retirees represent a pool of potential employees. The Home Depot, the world's largest home improvement retailer, for example, launched a national hiring initiative last year with the American Association of Retired Persons looking to attract and retain older, skilled workers.

Cindy Milburn, staffing director for The Home Depot, calls the partnership a "great opportunity" for the chain to attract talented employees to its stores. In addition, the retailer is looking to establish similar programs with U.S. government agencies, she also says.

TIME TO RE-EXAMINE PROGRAMS

While an older employee population is an important asset to employers preparing for or coping with the experience gap, the aging of the workforce carries some challenges that must be identified and handled from a risk-management perspective.

Companies need to re-examine a range of their policies and programs, from health care benefits and disability management to recruitment and retraining, and employee health and wellness programs.

"Employers and policymakers are being confronted with health care, economic, social and productivity issues when it comes to older workers," says Norman C. Hursh, an associate professor at Sargent College of Health and Rehabilitation Services at Boston University.

"Labor shortages and the potential dearth of experienced workers raise questions about how we can retain, train and address the needs of older workers, how we can better understand the age-related factors related to job performance, and how policies and programs can improve access and opportunities for older workers who desire to work and be productive," he says.

Despite the magnitude of the issue, many employers have not done extensive studies on the impact on their companies. "Those who have been studying the aging workforce would have liked for U.S. businesses to have dealt with this issue five years ago," says David North, CEO of Sedgwick Claims Management Services, a third-party administrator that offers claims administration, managed care, program management and other services to employers. "It is only now that employers are really starting to study this in risk management terms."

Among the age-related risk management issues is the fact that, as people get older, their ability to recover from injuries wanes, North says.

"Older workers who sustain the same injury as younger workers are likely to be off on disability longer," he says. "We know that, and as a result we're developing interventions to allow us to treat the same injuries differently, based on age--not because of any discrimination, but because our bodies respond differently as we age."

This risk may be mitigated, however, by the fact that older workers, in general, tend to experience fewer work-related injuries than their younger counterparts. "Older workers don't sustain the same number of injuries. They simply don't put themselves in as much jeopardy as younger workers," North says. "Older workers who are more experienced and pay more attention to how they perform a task will sustain fewer injuries. That has been proven out in our data."

Keith M. Higdon, vice president and regional manager of business intelligence for Sedgwick Claims Management Services, has also studied the impact of aging on the workforce.

He found that while there was a definite correlation between age and the cost of a worker's comp claim, the impact varies by employer depending on the type of work, the number of employees involved, and their age

"It is the sum of the circumstances that creates the environment specific to each employer," says Higdon. "In some cases the experience an older worker brings to the table mitigates the frequency and severity of the injury."

In other cases, experience may not play as big of a role as other environmental factors or the health of the worker. That is part of the problem of the discussion of the aging workforce. What characteristics or circumstances are specific to the older worker and what risk management approaches can best target their needs versus the needs of the larger employee base of the company?" Higdon's findings highlight the importance--and challenge--of risk management with regard to the aging of the workforce. For one thing, the concept of how "old" someone is reflects everything from attitude to environment.

NO EASY FORMULA

There are, however, some common workplace issues for an older workforce. One is to understand how and when employees "age out" of a position, when the demands--particularly physically--exceed what a person can do.

In an industrial setting this may involve the worker who has been doing a physically demanding job such as heavy metal bending and now has an injury that behaves like a chronic condition. Or, it may be the 55-year-old who no longer wants to endure days, or even weeks, on the road for business travel. With retirement less of an option for older employees, and with companies needing to retain and preserve this experience base, new strategies are called for.

"Even though older workers are less likely to get hurt because of the care that they take in doing their work and the experience that they have ... there are still medical ramifications that are part of getting older," says Douglas, a professor of occupational and environmental medicine at the University of Illinois School of Public Health.

Older workers, for example, may experience chronic medical conditions more frequently, including arthritis, heart disease, high blood pressure and diabetes. There is also the issue of the physiological process of the aging of the tissues, which increases exposure to risks, including injury and disability.

"This happens with aging, even when you have perfectly normal and healthy people," Douglas says, adding that companies must be aware of the "inevitable changes that are both pathological and physiological."

Older workers with disabilities may have special needs--not only from a medical standpoint, but a vocational one as well, in terms of job accommodations and retraining. In addition, employees over 50 may have work-life stresses that have an impact on their productivity. This is particularly true for the ease for the so-called "sandwich generation" that must care for an aged parent while also providing for a dependent child, who may be in college or struggling financially.

These realities facing older workers highlight the importance of taking a risk management approach, seeking to identify potential exposures, controlling them as much as possible and mitigating the negative impact and costs. At the same time, companies cannot expect to roll out a one-size-fits-all solution to identify and manage potential risks in their workforces. It is not, as Higdon says, "something you could plug and play in every employer."