Not Quite Ready to Retire

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CVS learned in the early 1990s that less than 7% of its staff consisted of workers over age 50--a problem for a business with many older customers. Executives turned to networks of seniors, including local church groups, to spread the word about senior-friendly jobs with flexible hours and health benefits. It worked: CVS has raised its proportion of over-50 staff to nearly 18%. "For us, it was a business decision," says Stephen Wing, director of government programs. "We want our staff to look like our customers. Besides, older people have better customer-service skills."

Attracting and keeping older workers take some creativity. John Johns, 65, recently tried to retire from his job as a CVS pharmacist in Sea Isle City, N.J., so he and his wife Patricia could spend winters in Cocoa Beach, Fla. CVS persuaded him to keep working--by creating seasonal jobs for him in both locations. He enjoys the work, and the health plan covers his wife, who is not yet eligible for Medicare. "At this point in my life, I want to have more freedom, and they've accommodated me."

But while older workers are often eager to cross such a bridge, many companies haven't built it yet. Antiquated pension rules continue to push older workers out the door by penalizing or just not rewarding service beyond a given date. Some younger workers assume seniors can't keep pace with fast-changing technology and business pressures. Many also believe older workers strain payroll and benefits packages, although a recent AARP/Towers Perrin study showed that keeping older workers costs employers just 1% to 3% more than the cost of replacing them. Half of employers make no attempt at all to retain older workers--even those who are key to the business, according to the Society for Human Resource Management.

At IBM, the aging workforce represents both a business opportunity and an internal dilemma. Over the past year, the technology giant, based in Armonk, N.Y., has launched a business initiative focused on the aging workforce, with consulting packages, software and other tools to serve older employees and the companies that employ them. But like many of its clients, the company is encountering issues presented by its own aging workers. Facing narrowing profit margins and changed employment norms, IBM announced in January that it would freeze its pension plan.

At the same time, IBM launched a $2 million program that will pay for tuition, licensing and interim salaries for employees who want a bridge to new careers as math and science teachers. Kathy Kelly, 58, plans to cross over. In her 36 years with IBM, she has stuck with the company through 18 different job titles and assignments in China and Chicago. As the single mother of two school-age children, Kelly isn't ready to retire but needs to dial back the 24/7 demands of her job as a global-strategies director. Teaching middle-school math will better match her schedule to her children's, she says, while "fulfilling an old dream and giving me new challenges."