How can we be worried about sufficient job creation and in the same breath be looking at significant labor shortages? It’s all a matter of timing. Between 2001 and 2010, the number of workers over the age of 55 will jump by nearly 47%, while those between 25 and 54 will increase by only 5%. Over the next 20 years, the number of people older than the retirement age will increase to 140 million from 35 million. Further, the Employment Policy Foundation reports that by 2011 there may be 4.3 million more jobs than workers.

Baby boomers, in other words, are getting older and, as usual for this noisy generation, making waves. As the workforce grays, employment policies will have to change. Otherwise, we won’t be outsourcing just to save money – it will be a necessity.

This was the message sent at a meeting held not long ago by the AARP to kick off its 2020 Vision Series. It is trying to focus the business community on the opportunities and challenges presented by the oncoming demographic tilt. Because, older workers surely will not only be needed, they will also choose, in increasing numbers, to stay on the job. But, they may require some accommodation.

Why are Baby Boomers likely to continue working? For one thing, many can’t afford to retire. As life expectancies have increased, so has the amount of savings required to support a retiree. Ramani Ayer, CEO of the Hartford, a prominent insurance company, points out that a male aged 65 today has a one in four chance of living until the age of 92. How many of us are prepared for that?

The possibility of running out of money is an issue; boredom is another. Many people can’t imagine 30 or 40 years of playing golf or watching daytime TV. (Many others, of course, long for the chance!) Another group is concerned about health benefits. Quite a few, consequently, will choose some sort of work. AARP research shows that 69% of people between 45 and 74 plan to continue working past the age of 65 or already are. However, most will not want to carry a full schedule and will consequently look to employers to create untraditional part-time work opportunities.

For businesses, Mr. Ayer argues, the rationale for accommodating such needs is simple. Corporations will be losing enormous institutional knowledge as their older workers retire, not to mention valuable client relationships. The head of HarperCollins Publishers, Jane Friedman, describes baby boomers as driven and optimistic. Another speaker, Shirley Pippins, the president of Suffolk Community College, describes boomers as the best educated generation in American history. She also cites studies describing older workers as being more motivated than their younger counterparts, and as possessing great loyalty, work ethic, and attention to detail.

So why would a corporation not bend over backwards to retain these aging virtuosos? Because there are some costs associated with an aging work force, especially in terms of health care – and because they may have to make some special efforts to adapt to the changing needs of older workers. For instance, many people have deteriorating eyesight and hearing as they age. Today it is not uncommon to have specialists redesign workspaces to introduce brighter lighting and reduced ambient noise. Some companies are changing font sizes on company communications, and using more sharply contrasting colors to make them easier to read. Others are training managers to slow their speech, so as to let older workers follow more easily.

Also, many companies are introducing training programs to bring older workers up to speed on new technologies; not everyone grew up using a computer. Various studies have demonstrated that people older than 50 are perfectly capable of learning new tricks; they simply tend to learn them in a different way than younger folks.

Certainly, companies have to adopt a different viewpoint towards “flex time,” job sharing, and telecommuting. Few people in their 60s or 70s are going to want to work a full week.

At present, these issues are looming large in professions where large-scale retirement is already taking place. This is the case among nurses and other health care professionals. Not surprisingly, several of the companies cited by AARP for “best practices” in attracting and keeping older workers are in this field. For example, Bon Secours Richmond Health System offers workers a variety of different classes and development programs and a subsidy for elder-care services. Scripps Health offers retiree health insurance and a tax-free health account for retirees to save for medical outlays.

Industrial companies in mature industries may also suffer large-scale retirement in coming years. Over the past 20 years, slow growth periods have caused lay-offs, which have tended to fall heavily on less senior, younger workers. The aerospace and defense industries fall into this category; the average age of defense industry employees is apparently 51. According to the AARP, engineers are in especially short supply, and the industry continues to encourage early retirement.

Other industrial companies have taken stock of the situation. Deere & Company, headquartered in Illinois, reports that more than half the company’s workers are expected to retire over the next 10 years. Is it any wonder that the company has been spotlighted by AARP as senior friendly? The company has instituted programs to abolish age discrimination, and offers health coverage as well as stock options for part-time workers.

Overall, companies facing employment shortages are likely to be the first to try to recruit and keep workers past retirement age. The good news is that as the economy has shifted away from manual labor toward service sector jobs emphasizing communication skills, among others, the graying of the workforce should not be a huge drag on productivity. That said, companies that don’t wise up may find themselves scrambling for help.

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