Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus convallis sem tellus, vitae egestas felis vestibule ut.

Error message details.

Reuse Permissions

Request permission to republish or redistribute SHRM content and materials.

Benefits for Older Workers

To attract and retain older workers, employers offer a variety of benefits.

March CoverThe joke at retirement parties at Stanley Consultants is "see you on Monday."

About 60 percent of the Muscatine, Iowa, company's retirees do, in fact, head back into work—as special project leaders or contract workers, or in a part-time capacity.

The engineering company, with 850 employees in the United States and 250 overseas, is getting ahead of a potential tsunami of Baby Boomer retirements. Like officials at other corporations and nonprofits, Stanley's executives are working hard to retain their own older workers and to lure retirees from other businesses by offering schedules and benefits that appeal to people in that age group.

Dale Sweere, Stanley's director of human resources, says older workers are sought out because they "typically hit the ground running much quicker and they fit into the organization well."

When Stanley opened an office in Qatar, for instance, HR leaders went to the retirement rolls and brought back a 30-year employee. He had been retired for five years but didn't mind returning for a stint, bringing with him critical experience from a past assignment in the Middle East.

Companies across the country say older workers are key to preventing a brain drain, filling jobs in highly skilled areas and reflecting an aging clientele.

Yet AARP chief A. Barry Rand says many companies still struggle to embrace older workers. "Most corporate leaders today understand and accept the business advantage of a diverse workforce. But far fewer see older workers as part of that mix. They fail to accept the advantage gained by retaining, retraining and recruiting older workers," he says.

That is likely to change as older workers' ranks grow. From 2006 to 2016, about 93 percent of the growth in the U.S. labor force will be among workers age 55 and older, according to the U.S. Bureau of Labor Statistics. Its latest data shows that the number of workers age 55 and older has risen by 3.1 million, or 12 percent, since the beginning of the recession.

Retirement-age workers are staying in the workforce longer for multiple reasons: Medical advances have left older Americans healthy enough for work, they think they will live a lot longer than previous generations, and the stock market and real estate plunge shrank their nest eggs.

Their decision to keep working has been a boon to government contractors, financial firms and consultants that all rely heavily on older workers, says Cornelia Gamlem, SPHR, president of the consulting firm GEMS Group Ltd. in Herndon, Va.

"Older workers can offer the historical perspective of the organizations; they've got a wealth of information about the customer base … and lessons learned," says Gamlem, who worked for many years in a large company's HR department.

What Works?

For the YMCA of Greater Rochester, an expanded crew of gray-haired employees helps build credibility with a "Silver Sneakers" training program for older patrons.

"Membership satisfaction is very important to us, and older workers are very good at [delivering on] that," says Fernán Cepero, PHR, vice president of human resources.

And for the pharmacy company CVS Caremark, with 200,000 U.S. employees, a "snowbird" program allows pharmacists to migrate south to places such as Florida for the winter, following the business's clientele.

"As a health care company, it's important for CVS Caremark to ensure that we have skilled workers to serve our customers and [who] are reflective of our customer base," says Chief Diversity Officer David Casey.

Other CVS Caremark benefits that appeal to mature workers: health coverage for part-time employees, training and flexible scheduling. These benefits have helped boost the percentage of the company's workforce that is age 50 and older from 7 percent in the early 1990s to more than 18 percent today.

Older employees often express an interest in job sharing, telecommuting, part-time hours and other flexible scheduling models, according to HR leaders.

That's the case at Rochester YMCA, where Cepero conducts focus groups and employee surveys to find out what benefits workers really want. His organization offers a range of benefits geared to older workers, who represent a growing segment of its workforce. One-quarter of its workers are age 50 or older, compared with just 5 percent a few years ago.

Part-time and flexible work schedules help lure older workers to Rochester YMCA. After years of having trouble filling the opening shift that starts at 4:30 a.m., Cepero now has an early-bird crew that includes many older employees. "They like it because it gives them more time to do the rest of the things they want," he says.

At Scripps Health, a large health care system in San Diego, Vic Buzachero, SPHR, corporate senior vice president of innovation, human resources and performance, says about 37 percent of the company's workers are Baby Boomers. Therefore, corporate leaders are concentrating on "making sure we hang on to that very valuable talent."

Buzachero conducts employee focus groups that encompass all ages so he can offer benefits that every age group will find useful. "We don't think one size fits all," he says.

One popular benefit: About 70 percent of Scripps' hospital staff sign on for flexible staffing arrangements, such as 12-hour shifts that mean fewer workdays each week.

Financial and medical benefits can attract and retain older workers, too.

Scripps offers a phased-retirement program that now covers 200 of the health care system's 3,000 workers. Sixty percent of program participants are in hard-to-fill jobs such as those for intensive care nurses, programmers and pharmacists. Under the phased-retirement program, employees work part time and draw some of their retirement money at the same time—a combination that leaves them with the equivalent of a full salary and benefits.

Buzachero pioneered the company's new system—which is based on a 401(a) retirement plan—after a nurse in a focus group mentioned that the old retirement plan was set up to encourage her to retire and then go work for a competitor.

Scripps had to change its entire retirement plan to keep nurses like her, but the effort has worked. "We want them to double dip with us," Buzachero says.

He concedes that HR leaders in a company with a traditional pension program would have a harder time setting up phased retirement under pension law. A 401(a) retirement savings plan allows employers to create multiple plans with different eligibility criteria, vesting schedules and contribution amounts. Scripps' plan allows partial retirement withdrawals for part-time workers.

If a company wants to offer phased retirement, Buzachero suggests:

  • Defining a business reason.
  • Analyzing cost. Scripps Health managers, for instance, save money that would go to employ expensive temporary workers when they retain skilled employees in specialties where skills remain in short supply.
  • Having tax attorneys, benefits experts and retirement plan administrators get involved in the setup.

At Rochester YMCA, Cepero is drawing and retaining older workers by opening up retirement plans to part-time employees. The organization also offers a mini-medical plan for part-time workers.

CVS Caremark offers health coverage to its part-timers.

Marcie Pitt-Catsouphes, director of the Sloan Center on Aging and Work at Boston College, says wellness benefits help older workers to have the energy to work more years.

At Capital One in Richmond, Va., wellness offerings include walking trails, a gym and healthy cafeteria options, according to spokesman Mark Andrews.

Gary Kushner of Kushner & Co., a national human resources and employee benefits firm in Portage, Mich., says that as people's bodies start needing more intervention after age 50, early detection health benefits—like coverage for colonoscopies and other preventive procedures—are popular.

Wait, There's More

Other benefits help lure older employees, too.

Many companies offer annual financial planning visits with experts. Older workers, who likely are sorting out what savings they will need for retirement, may appreciate the advice.

Stanley Consultants offers full credit for prior experience when assigning levels of paid time off to new hires.

At Scripps, long-term-care insurance, a concierge service that helps employees with personal errands, and legal services useful for workers thinking about wills and estate planning prove popular with older workers. Scripps' older workers also like its online discount program because they are at a stage in life where they can travel and eat in restaurants more often. Buzachero is among those who use an elder care benefit that pays for advocates and home care for parents of employees. The benefit allows him to make fewer trips to check on his mother in Alabama.

Benefits specialists at Scripps and other companies find that pet insurance appeals to seasoned workers. Buzachero says he can use his company's volume buying power to get this kind of insurance for workers at a much cheaper rate.

And some companies have benefits unique to their businesses. Cepero offers free YMCA membership to its employees. CVS Caremark offers a 20 percent discount on items purchased at its stores by workers.

Staging an Encore

A 2008 report by the Employee Benefit Research Institute, Recent Retirees Survey: Report of Findings, warned that employers that want to retain older workers by offering the right benefits need to make sure workers know about such incentives in the two years before they announce their retirement. Among the benefits most likely to get employees to delay retirement were:

  • Letting workers get a pension while working.
  • Offering them seasonal or contract work.
  • Providing pay raises.
  • Offering health benefits for part-time work.
  • Locking in pension benefits that already have been earned.

At Rochester YMCA, Cepero hires people who have had successful careers but who want to try something new and meaningful, such as taking care of children. One of his lifeguards was an Olympic swimmer who returned to the pool after another career and already has saved a life.

"This generation wants to continue working, but wants to do things meaningful to them in their encore careers," Cepero says.

And that may be the least expensive benefit of all for employers to provide.

The author is a freelance writer based in the Washington, D.C., area.

Web Extras


​An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.