Abstract

We have researched the retirement lifestyle including leisure and travel activities as well as propensity to re-enter the workforce. We have approached this from the perspective of the individual (retiree), the marketer and the employer.  In addition, we have analyzed how the unique characteristics of the Baby Boomers (e.g. their pursuit of the fountain of youth) will influence their decisions on when to retire and what type of post-retirement lifestyle they'll lead.  We have researched how companies are rewarding and retaining older workers based on the retirement lifestyle which they seek in order to answer the question of how companies can retain and recruit workers when:

1. These workers are aspiring to a different lifestyle than that of a full-time worker.
2. These workers are under social and corporate pressure to retire due to:
   • Universal yet subconscious perspective that people "should" retire at a certain age, that they are less productive and less able to learn as older workers.
   • The social influence that after many years of full-time work, people should be able to reward themselves with an easy lifestyle.

To integrate the perception of retirement and the older worker from these three perspectives, we have evaluated changing concept of retirement and the lifestyle trends of current and incoming retirees.  From this basis, we have assessed and recommended best practices for selling to this group for both the marketer selling products and the employer selling employment opportunities.

Section I: The perspective of the individual

Although the issues surrounding America's aging workforce are complex, there is at least one certainty: the baby boomers are not their parents.  This amorphous population segment has spent its entire lifetime in our nation's spotlight, and retirement will be no different.  Examining their attitudes towards politics, music, and spending habits, baby boomers have rebelled against their parents every chance they've had.  This undeniable progression is the basis for our arguments and recommendations regarding the foreseeable future of the United States labor force.

In this section, we will analyze the various perspectives of retirement for two different generations.  We first look through the lenses of a former investment manager and then a former senior executive of a private manufacturing company.  Then we will discuss current trends in the travel and leisure industry and profile two organizations that have successfully tailored their offerings to older travelers.  Finally, we will take a critical stance on the dynamic lifestyles of America's elders make projections for the future.  In doing this, we will address the influences of an array of factors including employment, health concerns, and living arrangements.

Interviews: Perspectives on Retirement

In his sixteen years of portfolio management in Cleveland, Ohio, Craig Kaufman recognized several attitudinal trends apparent across his client base.  From 1986 to 2001, Kaufman managed over 400 brokerage and retirement accounts for clients ranging in age from 35 to 85 years old.  Among his clients in the baby boomer generation, he noticed a stronger inclination toward materialism, and self-indulgent spending behaviors.  Members of this cohort retired as early as possible so that they could engage in leisure activities like golf.  They frequently attended upscale restaurants and spent a significant amount of their income dining and recreating at country clubs.

Kaufman noted, "The degree to which they traveled was primarily a function of their age and health" (Kaufman, April 7, 2004).  Many of his clients had second homes in the southern and southwestern regions of the United States.  Warmer climates appealed to retirees for lifestyle reasons as well as medical considerations.  Kaufman added, "Many of my clients suffered from arthritis, and the warmer, drier climates provided substantial relief from their symptoms".  This is consistent with the findings of the U.S. Census bureau, where so many southern states like Florida have a disproportionately high percentage of older persons in their population (Ameristat, www.prb.org). However, the same research report predicts that the population of persons aged at least 65 years will double in many western states such as Colorado, Arizona, New Mexico, and Nevada over the next twenty years (U.S. Census Bureau).

Somewhat surprisingly, not even his most geographically dispersed clients attempted communication with him via the Internet.  He estimated that 95 percent of the contact he had with his clients was either over the telephone or in person.  One possible explanation for this is the serious and confidential nature of the content in the conversations taking place between clients and brokers.  Although many service industries follow similar patterns, an exception can be cited in the emergence of online trading in the investment landscape.  Although the population is aging, the retirees of tomorrow will be far more comfortable using the Internet than the retirees of today.

Kaufman sensed an increasing level of trepidation and cautiousness in his clients as they approached traditional retirement age.  Many of them were fearful of having to curb their consumption patterns or being forced to change their standard of living.  Even though a significant portion of his clients' income was derived from their investments, they encouraged Kaufman to put their money in conservative 'blue chip' stocks like IBM and GE.  Consequently, he placed a higher percentage of their money in money market funds and other low-risk, interest bearing securities.

As for himself, Kaufman chose to change careers once he reached the age of 50.  In a non-traditional move, Kaufman suddenly left the investment world and rejoined the education ranks.  Although not ready for retirement, Kaufman no longer needed the level of income that initially drove him to become a stockbroker.  Realizing he only wanted to remain in the workforce for another 15 years at most, it was important to him to focus his energies into something he felt passionate about.  Now enjoying a simpler lifestyle in Vermont's Northeast Kingdom, Kaufman teaches history and serves as the academic director at a high school ski academy.

Once retired, Kaufman looks forward to volunteering in need-based literacy programs and having more time to read for pleasure.  He also envisions himself traveling more often and spending more time outdoors and on the golf course.  Opportunities that could potentially keep him in the workforce past age 65 would "have to provide either exceptional nourishment for the soul or irresistible financial incentives" (Kaufman, April 7, 2004).

Gus McDaniel, Kaufman's father in law, serves as a relevant point of contrast.  McDaniel, another Clevelander, took over management of a manufacturing company shortly after the Second World War.  At age 64, McDaniel sold his company and accepted an early retirement package.  Not wanting to be retrained so that he could work in a different area of the company, McDaniel reluctantly and abruptly exited the labor force.  Over the twenty years that have passed since then, McDaniel has been able to spend a larger portion of his time in his summer home on the coast of Maine.  "Ideally", McDaniel remarked, "I could have eased into retirement with a series of jobs with reduced responsibilities.  That way I could have stayed connected to the company and industry I was a part of for so many years" (McDaniel, April 9, 2004).

As McDaniel neared age 60, he felt strong social pressure to step down from his post.  He insisted, "In those days, if you didn't retire in your early 60's, people either thought there was something wrong with you or you'd run out of money" (McDaniel, April 9, 2004). Now, in reference to the baby boomer generation, retirees are commonly viewed in a negative light and people wonder what they do with their time.

Travel and Leisure

There are an abundance of travel options available to the elderly.  Traditional excursions like pleasure cruises and golf vacations are common, but demand seems to have leveled off in recent years.  The total number of domestic trips taken is expected to increase by 5 percent annually for the next 2 to 3 years (ww.tia.org). Growing areas of interest include more unique, in-depth educational and social experiences.  The relatively new phenomenon of eco-tourism seems to be exploding amongst able-bodied and able-minded elders.  Organizations like AARP and Elder Hostel have recognized these trends.

AARP, the American Association of Retired Persons, is a non-profit organization that has been in existence since 1958.  Any American over age 50 can join for a nominal fee of $12.50.  AARP's stated mission is to improve the quality of life for elders through its various programs that bring about political, social and economic change.  In addition to offering discounts to its 35 million members on various consumer products and services, the AARP Foundation reaches out to educate older Americans in:

1. Health and Wellness
2. Economic Security and Work
3. Long-term Care and Independent Living
4. Personal Enrichment
   (www.aarp.org).

Under the umbrella of 'Personal Enrichment', AARP is constantly adding new travel and leisure programs.  It even offers online courses 24 hours a day to members so that they can review and discuss literature and engage in 'lifelong learning'.  Clearly, AARP is poised to expand its membership base in upcoming years.

Elderhostel is a newer operation that is now the largest education and travel organization in the world for citizens 55 and above.  Based on youth hostels in Europe and beyond, the concept of safe and inexpensive accommodations for travelers was adopted into the not-for-profit Elderhostel model.  About 170,000 older adults took advantage of Elderhostel's all-inclusive programs last year in more than 90 countries.  In addition to the exciting activities and educational offerings, older adults recognize opportunities for social interactions in Elderhostel's 10,000 programs.  As opposed to the confined nature of many of today's senior citizens, Elderhostel provides great value in expanding the horizons for its customers (www.Elderhostel.org).

Independent of health and wealth, it appears that geographic location plays a significant role in the distance that elders travel (Fobker and Grotz).  Those who live in suburban areas tend to travel the longest distances, while those who live in urban and rural areas tend not to travel as far away from home.  This is attributed to the degree to which each of these groups use a car, which is clearly the primary vehicle of choice among elder travelers.  Surprisingly, the study concluded that there are no significant differences in the amount of leisure time spent by elder inhabitants of these three domicile classifications (Fobker and Grotz).

As the baby boomers begin exiting the workforce, the travel and tourism industry expects to experience a significant infusion of business.  Travelers in this large segment are more likely to stay in hotels and fly to their destination than any other cohort.  According to the Travel Industry Association of America (www.tia.org), baby boomers are currently the biggest spending group, totaling over $118 billion in travel expenditures.  One can expect this figure to decline slightly in the future as baby boomers stop traveling as often with their children.  Although independent of transportation expenses, this figure can be attributed to the fact that today's domestic travelers list shopping as their primary travel activity.

Since health and age tend to be drivers and/or limiters of travel frequency, the current demographic trends provide an optimistic forecast for the travel industry.  According to the National Center for Health Statistics, self-reported cases of excellent and good health have risen meaningfully in the past ten years.  In addition, self-reported cases of fair and poor health have slightly declined  (CDC, NCHS. April 9, 2004).  One can deduce that more and more Americans will be traveling and engaging in more active leisure activities.

Elder Lifestyles

Baby boomers gravitate toward different living arrangements than those common for past generations.  Currently, only 4.5 percent of the population aged 65 years or more lives in institutionalized nursing facilities  (AOA).  As nursing homes are improved and modernized, they will become both more widespread and socially accepted.  In turn, we could easily see the percentage of this population in nursing homes triple in the next 10 to 20 years.  At this time, 72 percent of older men still live with their spouse  (AOA). This rate is lower for women, primarily due to their longer life expectancy.  As divorce rates continue to climb, there will be a much higher percentage of single people in the senior population.  One could infer that these people will be less interested in and less capable of living alone and will either move in with their extended family or enter nursing homes.  This shift will have undeniable socio-economic effects, as younger generations will provide personal and financial resources to care for their elders.

The composition of the current aging population is different than the generations before it.  In 2002, only 17 percent of persons aged 65 or more years were minorities  (Census via AOA).  Twenty years from now, this figure will double.  Many of these racial trends can be linked to changing geographic distributions.  For instance, historically ethnically homogeneous states like Kansas, Nebraska, Iowa, North Dakota and Rhode Island have seen a decline in their older person population  (Census via AOA).  In the agricultural states, this migration may have been caused by the industrialization of agriculture and the displacement of farmers.  Senior populations have also declined in post-industrial states like Illinois, Pennsylvania, West Virginia and Missouri (Census via AOA).  States that are associated with recreational activities like golf and/or skiing like South Carolina, Arizona, Nevada, Utah, New Mexico, New Hampshire and Vermont have experienced at least a 20 percent increase in their older population over the last 10 years (Census via AOA).  These ten-year trends are illustrated in the following chart:

(The Administration on Aging - U.S. Department of Health and Human Services).

These trends have numerous business implications.  Not only are elders spending more money on recreation and leisure, they are building their lifestyles around it.  Of course elders want to remain close to their families, but it is seemingly more important to them to spend their last years doing the activities they want to do and socializing with other people their age.  In addition, many of these states have more favorable income tax structures, allowing retirees to keep more of their savings and sustain a more indulgent lifestyle.  As consumers, this cohort will increasingly drive America's economy long after they exit the workforce.

Working Lifestyle

Citizens over the age of 65 account for only three percent of the labor force in the United States (AOA).  As addressed in Section II of this document, this will have to change or the U.S. will face substantial labor shortages.  Healthcare and pension costs will not be able to be absorbed by the private sector alone if workers continue to retire in their early sixties.  Older workers, whether they are financially stable or not, believe they have earned an easier life.  They feel they now deserve the opportunity to indulge themselves and spend their newly found free time participating in activities they truly enjoy (TIA).  Clearly, this early retirement model is no longer sustainable given the current state of economics and demographics.

Baby boomers will not be eager to remain in the workforce when they enter their 60's.  Much of their attitude can be attributed to the set of expectations they developed from watching past generations age.  Although baby boomers will not want to age the same way as their parents' generation, they feel they should be entitled to the same perks.  Baby boomers have been the target of more than their share of marketing campaigns and the result has been predictable: a more materialistic society.  The rampant consumerism in their segment will be difficult to temper as their incomes inevitably decline (Kaufman).  Many of them will face an important decision whether or not to continue consuming at the same rate.

Lifestyle and Health

An uncertain variable in the retirement equation is health.  Even though pharmaceuticals and medical technologies continue to improve, the benefits are being counterbalanced by several lifestyle choices made by baby boomers.  The baby boomers are the first generation to be reared on fast food.  The combination of poor diets and static lifestyles spent in front of televisions and computers has been a leading cause of obesity.  They are the butt of jokes around the world.

Another consideration in the health of this large segment is recreational drug use.  During the late 1960's and early 1970's, as the baby boomers moved through high school and college, drug usage became widespread.  Hallucinogens like marijuana and LSD were commonly used by this generation (NCHS).  Stimulants like cocaine and opiates like heroin were also consumed in mass quantities.  Never before in the country's history had such a large percentage of the population experimented with controlled substances.

The counter-culture mingled with the mainstream.  The ideals of the past generation, good or bad, were dismissed.  Some baby boomers traded in this lifestyle for the accepted routine.  Others did not.  It is unknown what long-term health effects will result in the baby boomers that had varying levels of toxic intakes.  It is also unknown how much of their medical care burden will fall on families relative to the public sector.

In summary, the baby boomers will age differently than their predecessors.  Due to the size of this cohort, it is impossible to examine their behaviors without proper segmentation.  Generally speaking, however, the ramifications caused by the aging baby boomers will be felt throughout the economy.  As discussed in the section above, we have identified trends in the consumer behavior of this cohort with respect to leisure and travel.  In the next section, we will interpret how the lifestyle preferences and needs of this group will impact considerations and decisions made in working environment.

Section II:  The Perspective of the Employer

This section focuses on the employer's perspective.  We have reviewed studies and primary data in order to create a definition of the evolving and changing state of retirement.  Based on the lifestyle preferences of older workers and the type of life after retirement for which they are striving, our goal is to determine the best way to market employment to the segment of the population that is ready for that retirement lifestyle but is needed in the workforce.   We have worked with primary data that indicates that many people retire as soon as they are financially able.  These individuals have little interest in re-entering the workforce in a traditional capacity.  Many people who are planning for retirement are making plans to volunteer full-time or work in a job in which they want to work because they no longer have to work.  Although very few older workers have plans to "take it easy" when they retire, many are ready to leave their fields and move on to different activities.  Among retirees, participation in their full-time, post-retirement activities tends to decline 15-20 years after retirement, depending on physical ability.

Because the priorities of retirees tend to be so different than those of non-retired individuals, we searched for alternate means of compensation for these potential workers but did not find any companies currently utilizing this concept.  Many employers have discovered that flexible schedules and lower-commitment jobs make paid work more attractive to these retired workers.  However, only 59 percent of companies are specifically marketing to this segment of the population (Cohen, Sept. 2003).  Based on primary research and secondary studies, recruiting these older workers is a challenge since they are ready to move on to a different phase of life, whether it's unpaid work or a different career.

The retirement lifestyle has changed significantly over the past several years and will continue to change as the Baby Boomers enter the retirement stage.  "Modern retirement no longer resembles the popular conception" (Foster, April 18, 2004).  People no longer retire in order to relax, but now retire from their career when they are financially able either to:

1. Give back to the community
2. Work the job they've always wanted
3. Pursue a different career entirely

Although many retirees would be willing to reenter the work force, most are not actively pursuing employment.  Because the majority of employers are not specifically recruiting older workers, a disconnect exists between this potentially willing talent pool and the jobs that are available to them.  The labor shortage that is projected to grow over the next decade will force a connection between employers and older or retired workers in order to prevent a labor crisis.  There are many ways that employers can reach and retain this older group of workers including several methods already in use that have been proven successful by various corporations.

This section will discuss research on the following items:

1. Traditional versus new retirement views based on primary and secondary data, noting contradictions between datasets.
2. Projections for future labor shortage along with employers' reactions to these projections.
3. Current recruitment practices for older workers and the implications on the workforce of maintaining the status quo in recruitment programs for older workers.
4. How to best "market" employment to the retired worker age group and look at successful recruiting and retention efforts that are already in place.

Following the presentation of research, this section will conclude with recommendations for managers on how to best sell employment to the baby boomers as they reach retirement age.

The evolving retirement definition:

Possibly due to the obsolescence of the original need for retirement, retirement is evolving into something different from its commonly accepted definition.  Retirement came into place in the 1930's in order to make room for younger workers with the displacement of older workers (Foster, April 18, 2004).  Lifetimes were shorter then and most people who lived to 65 had only a few years to enjoy retirement before dying.  The concept of retirement was readily accepted, and people began to plan to retire as early as possible. People are now living longer and are finding ways to remain active and socially involved throughout their retirement years.   For example, the "Age-ing to Sage-ing" workshops in Atlanta teach older people to find wisdom in their life experiences and to find means of sharing this wisdom with others through writing, teaching and participating in "grandbuddy" programs (Emerson, March 3, 2004).

People are also seeking advanced education in their retirement years.  According to the National Center for Education Statistics, the enrollment of students over 35 in secondary school has exploded from 323,000 in 1970 to 2.79 million in 1999 when one-third of these students were over 65 (Emerson, March 3, 2004).  At DeVry University, the number of students over 40 has more than tripled in the past 10 years.  Similarly, community programs are encouraging older individuals to explore their creativity, which many people are able to express more freely when they are older (Schuster, April 6, 2004).

The incoming retirement demographic differs from current and previous generations of retirees in their use of technology.  "Today's boomers may become seniors, but they won't behave like today's seniors do.  They will have carried [their] history of using the Internet at work and in their past into their senior years" (CBS.com, April 8, 2004).  For example, baby boomer Barbara Sloan, 56, goes to the Internet first when she needs driving directions, to pay bills, or to find patterns to knit mittens for her new grandson.  Their ease of use of technology could help baby boomers stay marketable in a technology-based economy (CBS.com, April 8, 2004).

Retirement choices:

As much as the lifestyle of retirement is changing, so is the time at which people choose to retire.  People are working well beyond the traditional retirement ages of 55-65.  In January 2004, 4.8 million people over the age of 65 were working or seeking work, with 95.7 percent of those still working having never retired.  In addition, 309,000 individuals over the age of 80 were still working at this time (Kleiman, April 1, 2004).  More of those individuals were working out of the need to be productive rather than financial need.  A study of 2000 baby boomers conducted by AARP in 1999 revealed that 80 percent planned to work into their so-called retirement years.  Frequently this was due to their identity being strongly identified with their jobs  (Bracken, August 29, 2003).  "The expectation that Americans will retire at 65 is slowly giving way to the expectation that they'll work until they no longer can" (Bracken, August 29, 2003).

Despite these changing expectations, our primary data indicates that many people do retire as soon as they are financially able, which frequently occurs before age 65.  The premise and results of our survey research are explained in the following sections.

Survey Data:  Primary Research Methodology

• We surveyed individuals aged 50-84 years regarding retirement lifestyles and income, timing of retirement, willingness to re-enter the workforce.
• The majority of participants were working in or retired from white-collar jobs.  See appendix A for full survey.
• Summary of results is as follows:

Response Rate:

• "35 surveys distributed.
• "15 returned with overall response rate of 42 percent.
  • Ten from retired individuals
  • Five from individuals over 55 who are currently planning their retirement..

Distribution of answers for selected questions from completed surveys from retired participants (Note:  Answers from those not yet retired are not shown in this chart but are summarized below):

All ten retired participants retired before age 65.  Half of the respondents retired when they did because they were financially able to do so without changing their standard of living.  Four took early retirement incentives and one retired due to an occupationally based mandatory retirement age.  Retirement did not impose a change in standard of living on any of the ten retirees.  Of these, two are now working part-time and one other person willing to re-enter the workforce.  The two working part-time have spouses who are still in the workforce.  The other seven were unwilling to re-enter the paid workforce although many contribute volunteer work in excess of twenty hours per week. The sources of income for all participants came from a minimum of three sources including Social Security, pensions and retirement funds, 401K plans, personal savings and investments, and spousal income.  Estimates of disposable income ranged from 10 percent to 100 percent.  Not all survey respondents reported their percentage of disposable income. All retired participants participate in volunteer work.  All travel, with four of six traveling internationally.  Some trips for all participants are to visit friends and family.  Eight of ten use the Internet and email regularly, including four of the five individuals in the 75-84 age range.

Survey Data: Patterns of data with older worker participants (not yet retired)

Of the five older workers, four plan to retire when financially able to do so without changing their standard of living.  One will retire when ready and continues to work for the socialization and enjoyment of her current position. This individual started her career later in life after being a stay-at-home mom with her children.  Of the four who will retire when financially able, three have plans to volunteer full-time or to work in a job they have always wanted to do.  One may return to the workforce depending on financial need and the need for "nourishment for the soul".  All of the non-retired participants use the Internet and email.

Survey Data:  Summary of relevant information

The dominant pattern regarding the timing of retirement was that individuals chose to retire or plan to retire when financially able to do so, whether through an early retirement package or through their career-long retirement planning.   The strong majority of participants (eleven of fifteen) are unwilling to return to the workforce after retirement to do paid work in the area of their career although two are willing to do paid work in a different area.

Survey Data:  Contradictions with research from secondary data

In contrast to our findings that the majority of retired individuals are not willing to reenter the workforce, a recent AARP survey shows that many retirees would be willing to go back to work.  The AARP data shows that 37 percent of adults over 50 are working full or part-time, 48 percent of adults over 50 consider themselves to be retired, and 2 percent consider themselves unemployed.  Of those surveyed, a large percentage indicated that they would be interested in continuing to work or rejoining the workforce given the right employment opportunity.  However, very few are actively seeking employment or engaging in job search activities of any kind.  This contrast could be due to the large age range considered in our survey, the relatively homogenous nature of their professions, or the size of our sample.  In summary, this age group is not actively seeking employment and directed recruiting efforts will be required to interest them in rejoining the workforce.

Work preferences during later years:

Data shows that older workers would like more flexible work schedules, and they indicate that access to such schedules would keep them in the workforce longer (Rix, February 2004).  According to a document issued by the AARP Public Policy institute in February of this year, one half of older workers in a 2002 Conference Board Study indicated that flexible hours might keep them from retiring.  One quarter of this group listed contract work or consulting as their preferred employment arrangement.  Although many older workers are interested in working part time in retirement, more than half of those employed at 70 are working full time until age 70.  Also, full time employment has been on the rise with middle-aged and older workers in recent years.  Research has found that most employees work part-time by choice.  Involuntary part-time work, or part-time work for economic reasons, is rare in the older years  (Rix, February 2004).

Labor Force Projections:

Drastic labor shortages are predicted over the next few years.  From 2005 to 2015, Americans aged 65 and older are expected to increase 26 percent while Americans aged 40-54 will decrease five percent.  Workers between the ages of 25 and 54 will increase only five percent between 2001 and 2010.  At the same time, workers over 55 will increase 46.6 percent.  Within the next five to ten years, over 78 million baby boomers are scheduled to retire with only 44 million GenXers joining the workforce.  U.S. Bureau of Labor Statistics projects a shortfall of 10 million workers in the United States in the seven years between 2003 and 2010  (Craig, September 2003).

Many industries and occupations will be adversely affected as more workers reach their age of retirement.  Industries that will be most significantly impacted include public administration, education and health care.  GAO data indicates that more than 50 percent of all Federal workers will be eligible for retirement by the year 2005.  Similarly, 70-80 percent of all airline pilots will retire within the next five years,  (Cohen, September 2003).  Of the 15,400 air traffic controllers, 7100 will retire or quit in the next nine years.  For comparison, only 2100 were replaced over the last eight years  (Wald, March 18, 2004).  "Left unaddressed, these workforce shortages threaten to stifle economic growth while increasing wages in high demand occupations" (Cohen, September 2003).

Despite the labor force shortage projections for the next seven years, only two-thirds of HR professionals surveyed for the SHRM 2003 study were doing anything to prepare for this shortage.  Many indicated that they did not see the situation as one which would necessitate employment practices or internal policies and recruitment efforts.  In fact, one-third indicated that they were doing nothing in preparation.  The chart below shows the various strategies currently in use by organizations:

Recruitment and retention statistics:

Although some companies are investing in recruitment and retention plans directed toward older workers, data collected by the Society for Human Resource Management as presented to the Senate Special Committee on Aging in September 2003 indicates that more are not.  As shown in the chart below, 59 percent of companies are not actively recruiting older workers:

The SHRM survey also shows that although most organizations "tend to make a conscious attempt to consider retention in their mix of human resource practices", many Human Resources professionals take no active steps toward retaining older workers.  The chart below, which shows the aggregated answers regarding retention practices to directly target older workers, indicates that 65 percent of companies are doing "nothing specific" to retain older workers.

This chart also shows examples of practices that are currently in use as retention tools for older workers including:

• Flexible schedules
• Continuous skills training
• Reduction in work hours
• Asking older workers what they want

This SHRM study indicates that traditional retention methods may not be effective in keeping older workers in organizations and that alternate measures such as those listed above need to be utilized to effectively retain an older workforce (Cohen, Sept. 2003).

Implications of current employer trends:

As stated by Senator Larry Craig before the Senate Special Committee on Aging, "Our aging population makes it essential that we find ways to harness the skills, the talents, and the experience of older Americans, what they have to offer to their communities, and what they have to offer to this nation" (Craig, September 2003).  Several factors validate this statement.  First, the projected labor shortage due to the retiring baby boomers in conjunction with insufficient numbers of younger workers to fill positions makes it essential that employers find ways to retain and recruit older workers.  Current recruitment and retention practices are not sufficient to retain older workers to the extent they are needed.  Second, organizations can be adversely affected when employees retire in large numbers, leaving them youth-heavy with too few experienced workers.  Additionally, the majority of HR professionals indicated they did not believe that the aging workforce was forcing changes in recruiting, retention and management policies and practices.

As shown in the chart above, only four percent thought that changes were occurring to a very large extent and 31 percent thought the changing workforce was forcing changes to no extent at all (Cohen, Sept. 2003).  According to the SHRM analysis as presented to the Senate Special Committee on Aging in September 2003, "this may indicate a short-sightedness with regard to addressing the impact of an aging population" (Cohen, Sept.2003).

Current practices within organizations may be influenced by dominant misconceptions about the expense and effectiveness of employing older workers.  Despite commonly held beliefs that older workers are more expensive to employ, the cost of employing older workers is generally only higher than the cost of employing younger workers when measured strictly in terms of salaries and wages, which is due to the practice of increasing wages over the course of an individual's career (Barth, McNaught and Rizzi, 1993).  Health care costs have been found to be slightly lower for the 55-64 cohort than for the 34-44 cohort (Barth, McNaught and Rizzi, 1996).  Many studies and collections of data invalidate the common concerns of employers regarding the costs of training, health insurance and absenteeism.  According to the September 2003 SHRM study, Human Resource professionals indicated that they see many positive qualities in older workers including:

• Less absenteeism
• Greater motivation
• Mentoring abilities for younger workers
• Flexibility
• Willingness to work part-time and temporary assignments

Overall, data shows that older workers prove to be valuable and affordable assets to organizations despite common beliefs otherwise.

It has been shown that older workers or retirees generally do not actively seek employment despite a willingness to work given the right opportunity (Fyock, 2002).  In order to bridge the gap between jobs and this potential workforce, employers need to revise their corporate cultures and recruitment/retention practices to successfully employ and retain older workers.  If these changes are not made, many corporations will face labor and experience shortages as well as workforce imbalances within their organizations.

Marketing to the lifestyle expectations of older workers:

Phased Retirement:

To explore the questions of how to best recruit and/or retain older workers, we must consider their lifestyle expectations.  Older individuals, whether retired or still employed, value productivity and social connections in their lives. However, many are looking for more flexibility in their lifestyles.  In order to effectively recruit older workers, employers must sell employment to them as an opportunity that can fit into their changed lifestyle preferences.  Phased retirement is a means to achieve this fit.  A survey by Watson Wyatt published in April 2004 indicates that one of three older workers would work longer than expected if their employers offered phased employment programs (PRNewswire, April 10, 2004).  This survey of 1000 workers and retirees showed that worker attitudes toward retirement are changing significantly, but there is a significant gap between what older workers are seeking and the opportunities that employers provide.  For example, although the majority of those surveyed would like to work fewer hours late in their careers, less than half expected this chance to be offered by their employer.   Of the workers currently in phased retirement programs, 57 percent entered phased retirement voluntarily to have more leisure time.   This survey also studied the reasons that phased retirement appeals to older workers over full retirement and found that of those in phased retirement programs:

• 42 percent wanted to keep working because they enjoyed their work
• 38 percent continued working for financial reasons
• 10 percent were forced into phased retirement by job elimination

Watson Wyatt also collected information regarding how workers want to phase in retirement and found that:

• 63 percent want part-time hours
• 48 percent want more flexible hours before full retirement
• 63 percent over 50 would like to phase in a different career altogether
• Within current phased retirement programs:
• 80 percent of older workers work flexible hours
• 79 percent work part-time
• 67 percent have less responsibility than they did with their career job

"As the economy recovers and baby boomers reach traditional retirement ages, labor shortages will re-emerge as an important issue," said Valerie Paganelli, senior consultant for Watson Wyatt, "Employers would be wise to consider phased retirement strategies that address older workers' needs and that will help maintain an adequate supply of talent and experience in the years to come"  (PRNewswire, April 10, 2004).

The importance of corporate culture:

In addition to implementing retirement plans that appeal to the lifestyle preferences of older adults, employers also need to examine their internal culture and make changes as necessary to create environments that are supportive to older workers.  To do this, they must examine their existing cultures for any realized or unconscious age-discriminatory behaviors or attitudes.  Although managers tend to hold conscious favorable opinions toward older workers, they unconsciously discriminate against them when making practical decisions (Barth, McNaught and Rizzi, 1996).  One way that organizations can encourage the continued employment of older adults is to provide sensitivity training on the aging dimension of diversity.  Companies such as Honeywell, Inc. have developed internal focus teams to address the concerns of specific groups including older workers (Fyock, 2002).

Communication with older workers:

Since older workers and/or retirees are not actively seeking employment, employers need to consider non-traditional ways of reaching these potential workers.  Newspaper advertising may be effective in sections other than the "help wanted" section.  Instead, ads should be placed in those sections being read by older adults such as the television, food and obituary sections.   Advertisements should communicate an interest in older workers, using words such as "retired", "mature", and "experienced"  (Fyock, 2002).    Testimonials from older employees indicating their satisfaction with employment with a company may help to reach older individuals.  Another method that has been used by companies such as The Travelers in Hartford, Connecticut is to offer "unretirement parties" to entice their own retirees and others to return as part-time or temporary workers (Fyock, 2002).  Because 82 percent of baby boomers are internet-literate (CBS.com, April 8, 2004), employers may reach older workers though online advertising.  Companies should evaluate their literature and update it to include pictures of older adults.  In summary, companies need to ensure that older employees are comfortable working within their organizations and that this is communicated to potential recruits.

Successful recruiting and retention efforts:

Many organizations have already implemented successful recruitment and retention programs targeting older workers.  The following paragraphs explain the specific efforts of Baptist Health South Florida and Home Depot as well as discuss some generally successful methods for reaching older workers.

Baptist Health South Florida, a non-profit organization with 10,000 employees, won an Optimas Award for Innovation in 2004 for ideas used to attract older workers (Mullich, March 2004). The company has succeeded in retaining older workers using several policies including:

1. Capitalizing on changes in the law:  Where old pension laws dictated that full retirement was required in order to take advantage of retirement savings before age 65, new laws allow workers to work part time while withdrawing from pensions starting at age 59 ½., and Baptist Health South Florida offered this option to employees as soon as it became available.
2. "Bridgement of Service" policy:  Baptist Health South allows anyone who quits or retires to come back within five years and pick up where they left off in terms of seniority and benefits.
3. Retirement trial:  Workers can accrue 1000 hours of paid time off and can use these hours for longer vacations try retirement.
4. Internal resources:  The company employs two recruiters designated for internal transfers.  These recruiters spend 25 percent of their time to help move older workers to less physically demanding jobs.
5. Prevention of discriminatory decisions:  Any worker with 15 or more years of service cannot be demoted, fired or receive a pay cut without review by a three-person committee of high-ranking executives including the company's president  (Mullich, 2004).

By implementing these very specific retention practices for the older worker, Baptist Health South has achieved not only a 7 percent turnover rate among workers over 50, but a company-wide turnover rate of half the industry average at 9 percent.

Although Home Depot already had a high rate of employment for older workers with 15 percent of their 300,000 employees over the age of 50, the company formed a partnership with AARP in February 2004 to increase recruiting efforts toward this age group.  Through this partnership, The Home Depot has made it clear that they welcome older employees.  Older workers can apply to positions at The Home Depot and other partners via the AARP's nationwide employment centers and website.  This initiative set an example for other corporations, and within days of its announcement, several major corporations contacted The Home Depot and AARP to find out how they, too, could reach out to older workers (Woog, 2004).

General recommendations for attracting and retaining older workers are offered by such organizations as AARP and SHRM, and are based primarily on offering options and flexibility such as telecommuting, job sharing, phased retirement and other alternative retirement plans.   To retain currently employed older workers, AARP recommends ensuring that older workers receive the same access to employer-provided training as younger colleagues as well as encouraging older workers to stay competitive as the economy becomes more technology based.  (AARP Working Age Vol. 16, No.3, September/October 2000).

Recommendations for managers:

To successfully recruit older workers now and as the baby boomers begin to retire, organizations will need to implement company-wide changes.   In addition to practicing targeted retention and recruitment practices, managers need to carefully monitor the messages that are being sent to employees regarding older workers.  By examining internal perceptions and attitudes toward older workers as well as recruitment policies, companies can begin to make changes that will attract older workers and help meet their labor needs in the face of the impending labor shortage.

First, a supportive and welcoming attitude toward older workers needs to be demonstrated as a corporate value.  Managers' actions should make it clear to all employees that the experience and talent of older workers is valued.  This will instill confidence in employees of all ages as well as demonstrate how older workers are to be regarded within the organization.   Incentives for early employment can send the message that spending more money to send an employee away provides more value than paying the salary and receiving their contribution to the company.  The perception that skills are no longer valued may induce people to retire earlier.  Because of this, organizations need to proactively show that people are still valued.  Employers should work with employees on career planning including retirement as early as 15-20 years prior to retirement age in order to set expectations and find a plan that will benefit both employer and employee.

To retain workers as they near retirement age, employers should offer flexible hours programs including part-time work and phased retirement as well as opportunities such as telecommuting and job sharing.  Also, employers can connect older employees with the younger workers and keep them involved in the changing organization by establishing mentoring programs.

In order to recruit older workers for available positions, employers need to target them in non-traditional ways and offer positions which will enable them to maintain the lifestyle of their choice for their older years.   Communicating with older workers through organizations such as AARP, advertising in newspapers in sections other than the want ads, using posters in community gathering places, and sponsoring events to gather potential older workers are all means of reaching older workers.  By choosing words, pictures and job descriptions conveying that older workers are welcome, companies can appeal to older individuals who may not otherwise apply for positions.  Companies should consider the types of positions that they can offer to older workers.  For example, the large percentage of self-employed workers who are over 50 may indicate a preference for autonomy and decision-making ability within this demographic.  Because of this, employers may have more success in recruiting them if these types of positions are available for this cohort.

According to "Older Workers Wanted", an article recently published on the job-centered website monster.com, there are many industries where the skills of older workers are welcomed.  In addition to retail positions such as those offered by The Home Depot, companies in the industries of healthcare, banking, customer service and technology need candidates for a variety of positions.  Some healthcare positions do not require certification where others may require a short training course.  Retired nurses are in demand and can retrain quickly to be ready for immediate employment.  Banking and other businesses such as call centers that rely heavily on customer service have positions readily available to older workers.  Even with the downturn of technology, there are ongoing needs for workers including computer-illiterate workers who are willing to take a six or eight-week training program.  Companies in such industries with positions open to older workers will benefit from incorporating flexible time options, modifying recruitment strategies to target older workers, partnering with organizations such as AARP, and ensuring that their corporate culture welcomes older workers.

Since many older individuals remain in or reenter the workforce due to the desire to be productive rather than because of financial need, employers should consider alternate means of compensation than money.  Although legal barriers currently prevent this, employers will eventually look to non-monetary rewards which fill other needs in the retirement lifestyle.  For example, travel benefits such as flight coupons could be rewarded to employees with grandchildren in other states.  Bartering-type exchanges are already in place within some companies and types of positions.

In summary, recruitment policies and practices should cater to the lifestyle expectation of retired and older workers, offering more flexibility in terms of scheduling and compensation in order to support their priorities and preferences.  Numerous studies show that workers are willing but not necessarily looking for work.  By and large, employers are not actively marketing employment opportunities to older individuals.  In order to meet the labor needs of corporations as well as the needs of individuals to remain productive and connected, companies need to evaluate their culture and practices in order to bridge the gap between existing opportunities and the potential labor pool within the demographic.  This will become more critical in the face of the upcoming labor shortage of the next several years, and companies need to begin improving practices immediately to alleviate this potential crisis.

Section III: The perspective of the marketer

Marketing to the mature market

As the population ages, successful business managers will need to consider how this aging trend is likely to affect their business.  It will be necessary for companies to understand the consumption needs of this population, and how they respond to various marketing activities.  Additionally, it will be necessary for firms to prepare themselves for an aging workforce.  Some firms are beginning to understand how beneficial it can be to keep older workers on the job.  Other firms are beginning to understand that there is a lucrative market here.

Demographics

Because of the mere size of this group, the aging baby boomers have a considerable amount of economic power in their hands.  In fact, "While mature Americans make up 35 percent of the population, they have more than 75 percent of the discretionary income.  In the marketplace, that makes them the 800-pound gorilla" (Hartford Courant, April 8, 2004).  It is imperative that successful businesses learn more about this group and target their marketing messages carefully, so as not to offend.  "Reluctance to target the older population stems, in part, from lack of information (uncertainty) about the older consumer market.  For several decades the marketplace had been treated as consisting of only younger consumers (usually under the age of 50), so this idea of marketing to older people is very novel" (Journal of Consumer Marketing, 1997, p. 283).  "The boomer market is sophisticated and has big buying power, so every year we see more and more products geared toward this demographic", says Lisa Casey Weiss, lifestyle consultant, "Research shows boomers want items that combine style and function.  They want technology to make their lives easier.  They want to maintain a healthy lifestyle.  And what they want they tend to get" (Hartford Courant, April 8, 2004).

Segmentation

One question for marketers to answer is whether to assume this market as one heterogeneous group of people, or to further segment the mature market.  The fact is that older consumers vary considerably on how they look, think and act.  Basic character traits do not change with age.  Inaccurate generalizations will lead many companies down the wrong path with their marketing efforts.  Although objective criteria such as age are a convenient method of segmentation, research shows that this method is not very effective.  People within the age brackets of 55-64, 65-74, and 75+ do not seem to respond differently to marketer's offerings.  Thus, the segmentation of the mature market must include criteria other than simply chronological age (Journal of Consumer Marketing, 1997).

The best way to market to the mature market will differ depending upon the specific segment targeted and the product or service being marketed.  It is important for marketers to rely on information garnered from responses to specific marketing stimuli, which is relevant to a specific target segment, concerning a specific product or service (Journal of Consumer Marketing, 1997).  A model created by Moschis, Lee & Mathur presents four groups of older adults at different life stages, not necessarily correlated with physical age.

These include:

Healthy indulgers- their main focus is on enjoying life rather than "making it in life".  Most baby boomers are found in this group.

Frail recluses- people with chronic ailments who are pretty much in isolation and are likely to consider themselves 'old persons'

Healthy hermits- those who are healthy, but socially withdrawn; concerned with day to day tasks, and likely to deny their 'old age' status

Ailing outgoers- still active and likely to maintain high self-esteem despite adverse life conditions; pre-occupied with their physical and financial independence and well-being (Journal of Consumer Marketing, 1997).

The model presented is useful in dividing the mature consumer market into target segments, regardless of chronological age.  These groupings can be used to identify potential customers, or to develop specific marketing strategies.  The following charts illustrate this lifestyle model, which focuses more on psychographics than demographics to segment the mature market.  It provides sample marketing strategies for various types of products and services, including suggestions for positioning, promotion, distribution and pricing (Journal of Consumer Marketing, 1997).

Psychographics

According to D.B.Wolfe's book entitled Serving the Ageless Market, "as people mature, their thinking integrates the subjectivity of childhood with the objectivity of young adulthood.  As a result, the mature markets respond to marketing efforts that reflect five key concepts: autonomy, connectedness, altruism, personal growth, and revitalization" (Journal of Consumer Marketing, 1997, p.277).  Marketing efforts that incorporate these key values will most likely be well received by this market.  We will discuss each concept, providing examples of how companies can improve their marketing efforts with the mature market.

Autonomy involves feeling in control.  A feeling of being out of control is terrifying to many people, regardless of age.  Avoiding this feeling of helplessness is even more important to the older consumer, as they may be experiencing physical, psychological or social changes which may be out of their immediate control.  One effective method of marketing to this market is to illustrate how the offering helps the consumer remain in control.  "Kimberly-Clarke has addressed this issue with one of their products-Depends undergarments for the mature, incontinent consumer" (Journal of Consumer Marketing, 1997, p.227).  By using an older, well-respected actress, as the product's spokesperson, the company is using "enhanced autonomy and self-sufficiency to sell this product".  Accordingly, baby boomers especially feel a need to be in control of their lives.  With the uncertainty of the future of Social Security, and corporate pension plans, the aging baby boomers will likely place an even greater value on autonomy and self-sufficiency (Journal of Consumer Marketing, 1997).

Connectedness relates to an established comfort-level with others; informality, neighborliness, customer-friendly companies, meeting new people, and intergenerational connectedness.  Companies such as Quaker Oats have successfully used, grandparents teaching children, to market its products. Associating the satisfaction, one gets from this type of intergenerational connectedness, with the satisfaction one gets from the product, has been an effective method for them (Journal of Consumer Marketing, 1997).

Altruism is 'the desire to give something back to the world', and it strongly influences the lives of many older consumers.  Thrifty car rental did some marketing research which showed that, although "11 percent of its older customers cared about a 10 percent 'senior discount', 41 percent of its older customers would choose an opportunity to donate that discount to help buy vans for senior citizen centers.  This information helped Thrifty launch its highly successful 'give a friend a lift' program (Journal of Consumer Marketing, 1997).

Older consumers respond well when they are portrayed as still developing and learning human beings.  Personal growth is still very important to many of them.  By using tributes to the accomplishments of older people, companies can produce strong, positive images to help position its products in the minds of the mature market.  ElderHostel is the most famous example of personal growth values used in marketing.  It has capitalized on the idea that older adults seek out pursuits that enable them to revitalize themselves through active participation.  By offering travel and educational opportunities, ElderHostel has successfully met the personal growth needs of many older adults (Journal of Consumer Marketing, 1997).

Revitalization is the fifth key value discussed in Wolfe's book.  Teaching and volunteering are the most important aspects of revitalization.  It often can be useful to show older consumers participating in revitalizing activities.  On the other hand, it is very important to avoid creating products or services specifically for the 'senior market'.  This could lead to a complete rejection based on that fact alone.  Many of these consumers do not want to be reminded of their age and are reluctant to purchase anything created especially for 'seniors' (Journal of Consumer Marketing, 1997).

Two additionally important factors to capitalize upon when marketing to aging consumers include 'word of mouth' advertising and relationship marketing.  Word of mouth is the most effective method of reaching the mature market.  If a friend or relative recommends a product, the mature consumer will be more receptive to it.  The idea of relationship marketing has become popular among marketers.  "One of the strongest things you can do with the aging consumer is to create a positive relationship with him/her.  This market almost demands that you create such an atmosphere." Additionally, older individuals tend to consider you trustworthy until proven otherwise.  This tends to make it easier to create relationships (Journal of Consumer Marketing, 1997, p.280).

Shopping Preferences

Perhaps the most dramatic event, which occurs for the mature consumer, is the concept of retirement.  This event, or series of events, often has a dramatic impact on an individual's income, spending habits, and lifestyle.  Some research has shown that "shopping has an important recreational and social dimension for the elderly".  Older consumers tend to shop in the central 'downtown' business district, as well as, department and specialty stores for non-food purchases due to habit and/or convenience. Additionally, older consumers tend to shop less frequently and exhibit a clear preference for specific days and times to undertake shopping trips  (European Journal of Marketing, 1995, p.45).  One plausible explanation is that older consumers remember the days of the past, and prefer to shop at quieter, less crowded times.  Another reason could be that they have always used the central business district, as that was all that existed before shopping malls and suburban sprawl.  Additionally, it may be easier and more convenient to walk or take public transportation to these locations.

Other interesting factors which seem to affect how and where the mature consumer shops include the following:

• Store reputation appears to be more important than product brands
• They tend to exhibit more leisurely shopping behavior
• They have a slight preference for local stores as opposed to national chains
• Quality and relevant product features are highly valued

(European Journal of Marketing, 1995).  Understanding where older consumers prefer to shop, and why, will help companies make intelligent decisions about where to distribute their goods and services.  It also helps companies create a more convenient shopping experience for the mature consumer.

Designing Baby Boomer-friendly Packaging

One benefit that the manufacturers can design to appeal to aging baby boomers is more convenient packaging.  With failing dexterity and hand control, the packaging protecting many products is inconvenient to open.  Dean Foods Co. "has recently upgraded its International Delight coffee creamer container.  The plastic open and pour bottle, which you can manipulate with one hand, has a sleek ergonomic shape.  The bold blue lid features an easy-to-use product-dispensing button" (Dairy Foods, October 1, 2003).  Both large and small manufacturers are getting involved in the easy open trend.  This packaging trend spans categories from canned soup to pet food, and from coffee to tuna.  "Campbell Soup Co. has revamped its entire 75-flavor condensed soup line with easy open lids.  Campbell's said the lids have contributed to the success of its ready-to-serve franchise."  According to Michael Seaboch, corporate buyer, B&R Stores "Easy to open lids are especially important to aging consumers, who may have arthritic hands and other ailments that make it difficult to use manual or even electric can openers.  These lids don't create any sharp edges that can openers create, and they could make a difference to older consumers in terms of what they buy" (Angrisani, October 13, 2003).  Packaging is an important part of marketing any product, and this trend gives companies a unique opportunity to provide packaging benefits to satisfy the aging consumers' need for convenience, thereby improving their own bottom line.

Products currently positioned within the minds of the mature market

Many industries are beginning to understand the importance of the demographic shifts toward an aging economy and are using strategies to target this lucrative market in order to gain competitive advantage.  Examples of industry sectors and their respective products/services being positioned in the minds of the aging consumer are as follows.

The Financial Services Industry:

The financial services industry is a logical one to target this group.  "Because today mature consumers retire earlier and live longer, they often find it necessary to finance a longer post-retirement and thus, while they have money, they do not spend it in the traditional sense", states George Moschis.  "The mature consumers' need to carefully manage his or her assets over the remainder of a lifespan makes the age 55 and older segment of the market extremely lucrative to the financial services provider" (Journal of Services Marketing, 1995, p.62).  One company taking advantage of this trend is American Express Financial Advisors.  "More non-insurance companies are selling more annuities and insurance as they seek new groups of customers", said Bob Hartwig, chief economist for the Insurance Information Institute, a trade group.  "Financial services firms are offering annuities and insurance as part of estate planning or wealth management services as aging consumers look toward retirement", he said.  According to insurance groups, annuities have been the fastest growing financial product for the past five years (Jean, January 10, 2004).  American Express is providing a service to satisfy the growing need for older consumers to control their financial future, and ensure their family's security.

The Auto Industry:

The automobile industry is recognizing the challenge of marketing to this heterogeneous group.  "Carmakers and other industry experts say it's impossible to design a car for today's aging consumers-their tastes vary too widely." Additionally, "dubbing a vehicle an 'old persons car' is considered marketing suicide-a turnoff for younger buyers.  And many graying buyers also bridle at being defined by their age" (Incantalupo, November 15, 2003).  For this reason, most manufacturers are not producing cars specifically for aging baby boomers.  What they are doing is altering their products to be better for everyone, aiding the mature market in the process.  Some examples include:

• Knobs, switches, and door handles that are easier to manipulate
• Wider door openings
• Higher seat heights
• Bigger, more visible numbers and letters on gauges and radio faces

"If an older person can use it easily, the thinking goes, it should be better for everyone" (Incantalupo, November 15, 2003).  Interestingly, the current generation of older drivers tends to gravitate toward the 'Big Three', GM, Ford, and Chrysler.  In fact, three General Motors' Buicks, The Century, Park Avenue, and Le Sabre have drivers with the highest median ages-73, 72, and 71, respectively, according to a recent survey by Strategic Vision".  One perspective that appears to ring true for all firms interested in attracting the mature consumer is that "the carmaker that caters to one elder generation without attracting the next one will, ultimately, find that all of its customers have died" (Incantalupo, November 15, 2003).  Although efforts are kept low profile, carmakers are considering the weaker muscles, stiffer joints, faded hearing and eyesight, shorter stature, and slower reaction times that come with aging (Incantalupo, November 15, 2003).  By designing products which recognize these limitations, automakers are making better products for older consumers as well as consumers of all ages.  Although the industry as a whole has traditionally focused on youth, because it is 'sexy', changes are starting to occur.  "Toyota says 2003 will mark the start of an aggressive effort to study the 50-plus U.S. market" (Lienert, January 26, 2003).  "The Toyota Avalon, a moderately priced extended version of the highly rated Camry, has a median age of 67-the seventh highest on strategic Vision's ranking" (Incantalupo, November 15, 2003).  Automobile manufacturers are starting to understand how they can attract older consumers by offering features that provide convenience and ease of use for all drivers.

The Appliances and Household Products Industry:

According to Anne Long Morris, the chairwoman of the American Society on Aging's Network on Environments, Services and Technologies for Maximizing Independence, "As baby boomers ease into their golden years, they will be seeking user-friendly, yet stylish, appliances and household products."  She also believes that "The idea of universally designing products that can meet the older population is something that will gain in popularity as the number of older people increases" (Gaston, May 8, 2003).  Some product examples include:

• Telephones with larger numbers and bigger digital displays for the visually impaired
• Front-loading, angled baskets, and enlarged doors on washers and dryers to minimize need for bending
• Refrigerators with a freezer compartment on the bottom, to make it easier to retrieve frozen goods
• Stovetop ranges that feature front-end controls for wheelchair-bound consumers.

Other unique products developed with the mature consumer in mind include: La-Z-Boy's lift chair, once a product from the company's healthcare line, now available as a residential product; and Strategix ID's development of a bicycle with a helper motor, to help the rider get started from a stopped position (Gaston, May 8, 2003).

Consumer Products:

For multi-national consumer goods companies, the marketing challenge lies with "a widening gap between the relatively young populations of developing countries and the aging populations of the developed world-and trying to find growth opportunities in both" (Prystay and Ellison, February 27, 2003).  Proctor & Gamble recognizes the clear advantages of selling in developed markets.  In 2002 it launched a toothpaste for aging women called 'Rejuvenating Effects', in the U.S.  One of the company's most recent successful new product launch is its Olay anti-aging cream.  "Motorola makes phones with features that aging consumers like, such as a zoom function to bump up the font size on the tiny screen and even internal speakers that can connect with hearing aids" (Prystay  and Ellison, February 27, 2003).  Consumer products manufacturers are beginning to better understand the mature market, and they are adjusting crucial marketing variables such as product design and distribution to better satisfy their needs.

The Food & Beverage Industry:

While it is widely known that the senses of sight and hearing deteriorate with age, it is also true that the nose and tongue tend to lose their acuity with age.  This leads to the deterioration of smell and taste, which in turn leads to interesting challenges for the food industry.  In response to the changing demographics, companies are beginning to research ways to make food more palatable to aging diners.  "What you need to do is increase the olfactory component of a mixture, says Marcia Pelchat, a food researcher with the Monell Chemical Sensors Center in Philadelphia.  Put more simply, you jack up some of the smell, and to a lesser degree, the taste components in food" (Strauss, September 27, 2003).  A group of upscale American retirement communities owned by the Hyatt hotel chain "Started having issues in the residences, people saying things like, 'the food has no taste.  It looks nice, but there is no taste there', says Cheryl Lucas, assistant vice-president for food and beverages at Classic Residences in Chicago" (Strauss, September 27, 2003).

In response to the needs of its consumers, Hyatt "worked with a supplier to develop what they describe as a proprietary technique that uses high pressure to insert flavor enhancers-which can be as basic as the stock created by boiling a chicken-into the meat" (Strauss, September 27, 2003).  As a result of these changes, the number of complaints has decreased dramatically.  "So why don't food producers sell more flavor-enhanced meats in supermarkets?  Some experts say they would present a marketing dilemma.  'It is hard to advertise food as something you should consume when you are so old and decrepit you can't taste anything,' says Adam Drewnowski, Director of the Nutritional Science Program at the University of Washington" (Strauss, September 27, 2003).

Most food manufacturers are still wary of marketing to older consumers. "Ensure" brand nutritional shakes are one of the few national brands being promoted specifically to people aged 45 to 60.  They are marketed with subtlety, using the tagline, "Complete, Balanced Nutrition to help stay healthy, active and energetic" (Dairy Foods, October 1, 2003).  Because baby boomers are "in pursuit of the 'fountain of youth', they are seeking foods and beverages which promise longevity, as well as, health and wellness".  An enormous opportunity exists for food and beverage manufacturers "to formulate products that meet this groups needs and wants, as baby boomers are ready and willing to spend what it takes to retard any signs of aging" (Dairy Foods, October 1, 2003).

Baby boomers tend to be optimistic economically.  They like to spend, and they like convenience and disposable items (Dairy Foods, October 1, 2003).  It is widely believed that the baby boomers still want to make the world a 'better place to live' as they demonstrated in the '60s and '70s.  In order to continue being part of that 'better place', they are seeking out dietary solutions to slow aging. It is widely believed, amongst baby boomers, that they can control the aging process through diet and lifestyle changes.  "While baby boomers find nutrient-enhanced foods appealing, it is important that these foods not make them feel 'old'" (Dairy Foods, October 1, 2003).  Products introduced in recent years include Lifeline Food Co.'s low-fat cheese line, which contains phytosterols, natural compounds derived from plants, which are recognized for reducing blood cholesterol.  Stonyfield Farms manufacturers organic YoSelf, a low-fat yogurt containing live active cultures and inulin, that promotes good digestive health.  Inulin is a prebiotic, which means it increases the activity of the beneficial bacteria and helps prevent the growth of harmful bacteria in the digestive tract.  Apparently, inulin also significantly increases the absorption of calcium, which is particularly important for women, the consumer segment YoSelf targets.  Food scientists at Pennsylvania State University have shown that adding heart-healthy flavonoids during processing can produce tastier food products.  Additionally, increased consumption of flavonoids, which occur naturally in plant foods, has been associated with reduced risk for cardiovascular disease.

Various cereal manufacturers have managed to enhance grains with healthful ingredients.  Kashi Co. sells a toasted oat cereal containing soluble fiber, vitamins, antioxidants and botanicals.  Golden Temple of Oregon, Inc. markets Yogi Tea's Green Tea Super Anti-oxidant, which is defined as an anti-aging formula.  The tea is formulated to combat the effects of free radicals in the body, at the same time it rejuvenates (Dairy Foods, October 1, 2003).

In the near future, it is likely that more and more companies will begin to develop food products to satisfy the needs of this growing population.  These products demonstrate both the baby boomers desire to stay, feel and look healthy as well as the manufacturers' need to provide products to satisfy this desire.  By creating foods and beverages that provide healthful nourishment for everyone, companies are able to position them strategically in the minds of the mature market.

Effects on the workforce: Conclusions & Recommendations for marketing

The demographic trend of an aging population will affect many aspects of our society including a host of corporate issues.  Most of these corporate issues fall under the categories of 'workforce' and 'marketing'.  Many companies are re-thinking the costs and benefits of hiring and retaining older workers.  At the same time, these companies are thinking about how to capitalize on the spending power of this growing population.  Much of the research indicates that this is a heterogeneous population, with different needs based on life experiences.  For this reason, it would be wise for marketing companies, and marketing departments of manufacturers to retain their older workers.  These folks certainly understand, at least one sub-segment of the market, better than younger folks.  We recommend that companies who plan to market to the mature market retain as much of their aging workforce as possible.  The knowledge and experience these employees can offer to the company are invaluable in terms of understanding how the target market will respond.

It is important for companies to use the same precautions whether hiring or retaining, or marketing to the aging population.  Stereotypes of the past do not fit, and should be strategically removed from all business decisions.  Just as older workers are equally as competent as younger workers to perform most jobs, older consumers expect companies to provide products to satisfy their needs without reminding them of their age.  If companies can understand the benefits provided by older workers, marketers can target products to satisfy their needs.  Perhaps the most useful concept is the development of products that are more utilitarian and more convenient for all consumers, but can be easily targeted to the mature market.  A well-designed product can be marketed to different segments, using different advertising media and distribution channels, while achieving more successful overall market penetration.

Section IV:  Conclusion

Although many workers plan to retire later than age 65, labor projections from the Bureau of Labor Statistics show workforce participation rates for older workers to be less than what might have been expected (Rix, February 2004).  The chart below shows the expected changes as estimated by the BLS:

Though "over the short run, an aging labor force is a certainty" (Rix, 2004), it is imperative that employers make the necessary changes to retain older workers.  As the labor force ages and older workers become sought after, companies need to have practices in place which will keep them in competition with other companies in recruiting these older workers.  According to Barbara Cohen of SHRM as stated to the Senate Special Committee on Aging, "If recruitment or retention or management practices are adjusted to account for the aging workforce in one's organization…an organization may be better prepared to deal with labor shortages and better able to accommodate an older workforce".

There are various forces reshaping the workforce, particularly the older workforce.   Many people plan to and do work past their potential retirement years.  When people do retire, their lifestyles no longer fit the traditional view over retirement.  Many retirees would be willing to reenter the workforce but they are not being recruited.  Despite the numbers of people still working after 65, there is still untapped potential for the workforce with retirees.  The looming labor shortage will reach crisis proportions if companies fail to put recruiting practices in place that reach out to older workers.

Appendix A

Survey used in primary research:  Retirement Research Project:  BSAD 395, Spring 2004

Name:_______________________________  Date:__________________

What is your current age (please circle):
45-55

55-64

65-74

75-84

85-94

95+

Are you retired?

At what age did you retire?

If not yet retired, when do you plan to retire?

If retired, why did you retire?

Would you be willing to re-enter the workforce?

What are your sources of income?  (Pension plan, social security, personal savings, 401k, etc.)

What percentage of your income do you consider to be disposable?

Do you volunteer or contribute non-paid work to any organizations?  If yes, which organizations?
If retired, how often do you travel:

More than 12 trips per year

6-12 trips per year

3-6 trips per year

1-2 trips per year

less than one trip per year

Where do you go?  Do you travel internationally?  How many of your trips annually are to visit friends and family?

Did you have to change your standard of living when you retired?

Do you use the internet?

Do you use email?

If you work, why do you work? (Financial necessity, passion for occupation, second career, etc.)

References:

Administration on Aging, April 9, 2004, www.aoa.gov.

American Association for Retired Persons, April 7, 2004, www.aarp.org.

Angrisani, Carol, October 13, 2003, "Put a (new) lid on it", Supermarket News.

Barth, Michael C., McNaught, William, and Rizzi, Philip 1996, Handbook on Employment and the Elderly (edited by Crown, William H.), "The Costs and Benefits of Older Workers", pp. 324-322.

"Boomers influence home products", April 8, 2004, Hartford Courant.

Bracken, Drew, August 29, 2003, "Financial need and new view of work delay retirement plans", Silicon Valley/San Jose Business Journal.

Burt, Steve and Gabbott, Mark, 1995, European Journal of Marketing, "The elderly consumer and non-food purchase behavior", Vol.29, No.2, pgs.43-57.

Cohen, Debra J., September 3, 2003, "Older Workers", Statement from the Society for Human Resource Management to the Senate Special Committee on Aging Forum on the Older Workforce.

"Dairy foods for today's baby boomers: innovate to meet the needs and wants of baby boomers today, and as they age (Tools for Innovation)", October 1, 2003, Dairy Foods.

Drury, Allan, March 28, 2004, "Busy lives challenge workers, employers", The Journal News.

Elderhostel, April 5, 2004, www.elderhostel.org.

Emerson, Bo, March 3, 2004, "From Aging to sage-ing", The Atlanta Journal-Constitution.

Fobker, Stefanie and Grotz, Reinhold, 2003, "Leisure-related mobility of elderly people: ways to sustainability."  University of Bonn, Department of Geography.

Foster, Abby, April 18, 2004, "Who's retired?", The Decatur Daily.

Fyock, Cathy, 2002, "Finding the Gold in the Graying of America".

Fyock, Cathy, 2002, "Recruiting Wisdom and Maturity:  Strategies for Recruiting Older Workers".

Gaston, Elaine, May 8, 2003, The Myrtle Beach Sun News, "Products designed for aging consumers".

Incantalupo, Tom, November 15, 2003, Newsday, "Automakers Say Aging Consumers' Tastes Vary Widely".

"How to Attract and Retain Older Workers", September/October 2000, AARP Working Age Vol. 16, No. 3.

Jean, Sheryl, January 10, 2004, Saint Paul Pioneer Press,  "American Express Financial Advisors to Focus on Insurance, Annuities".

Jesdanun, Anick, April 8, 2004,"Boomers Closing Digital Divide", CBSNews.com, Associated Press.

Kaufman, Craig, April 7, 2004, Phone Interview.

Kennett, Pamela A., Moschis, George P., and Bellenger, Danny N., 1995, Journal of Services Marketing, Vol.9 No.2, pgs.62-72.

Klieman, Carol, April 1, 2004, "Old view of retirement not working", The Chicago Tribune.

Leventhal, Richard C., 1997, Journal of Consumer Marketing, "Aging consumers and their effects on the marketplace", Vol.14, No.4, pgs.276-281.

Lienert, Anita, January 26, 2003, The Detroit News, "Courting the ages of affluence, designers study needs of aging boomers".

Moschis, George P., Lee, Euehun and Mathur, Anil, 1997, Journal of Consumer Marketing, "Targeting the mature market: opportunities and challenges", Vol.14 No.4, pgs.282-293.

Mullich, Joe, March 2004, "New Ideas Draw Older Workers", Workforce Management, pp. 44-46.

National Center for Health Statistics, April 9, 2004, www.cdc.gov.

"Older Workers Would Delay Retirement if Employers Offered Phasing, Watson Wyatt Survey Finds", April 10, 2004, Silicon Valley BizInk, Financial Services News distributed by PR Newswire.

Craig, Larry (Committee Chair), "Overcoming Obstacles and Crafting Opportunities for Older Workers", September 3, 2003, A Forum before the Special Committee on Aging, United States Senate.

Prystay, Cris and Ellison, Sarah, February 27, 2003, The Wall Street Journal, "Time for Marketers to Grow Up?".

Rix, Sara E., February 2004, "Aging and Work-A View from the United States", Senior Policy Advisor, AARP Public Policy Institute.

Schuster, Janice Lynch, April 6, 2004, "For Seniors, A Healthy Interest In the Arts", The Washington Post, p. C10.

Strauss, Stephen, September 27, 2003, The Globe and Mail, "When tastebuds turn grey; If your steak doesn't have the sizzle it used to, don't blame the cook. The problem could be your aging palate".

Tevis, Cheryl, February 2000, "Prime time for Seniors", Successful Farming, v98, p. 9.

Travel Industry Association of America, April 9, 2004, www.tia.org.

U.S. Census Bureau, April 6, 2004, www.census.gov.

Wald, Matthew L., March 18, 2004, "Retirement of Air Controllers Poses Problem, Official Says";  New York Times.

"Where Are Older Americans Living?", April 8, 2004,  Population Reference Bureau:  www.Ameristat.org.

Wolfe, D.B., 1990, Serving the Ageless Market, New York, NY.

Woog, Dan, April 4, 2004, "Older Workers Wanted", Monster.com.