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By CYRIL TUOHY, managing editor of Risk & Insurance®

The Great Recession brought on skyrocketing unemployment rates, big corporate layoffs and wholesale bankruptcies. In the economic mayhem, no one gave much thought to retaining workers. Almost three years on, though, and now the tables are beginning to turn. The economy, though weak, has revived, and the unemployment rate has recently dipped below 9 percent.

That means highly skilled men and women are going to progressively be leaving the workforce, once their 401(k)s bounce back and they feel comfortable enough to retire.

How are companies coping? Some are hiring employees back after they have retired.

These true stories come courtesy of Brian Roberts, risk control director with CNA, who recently was visiting a sheet-metal manufacturing client in Long Island, N.Y.

"I was going through a workflow analysis, and I was asking those that remained a couple of questions and they didn't have a clue of how to operate the machine dyes," Roberts said. "They said the guy retired 30 days ago. I brought it up with the president of the company, and he called me back two months later and said, 'You know what? I hired the buy back part time with full benefits and more money.' "

Hiring former employees back after they've retired is one way to do it. The sheet-metal client got lucky. His veteran was willing to come back, with a slightly sweetened offer.

What if retirees want to relax poolside in the Cayman Islands? To whom are company managers going to turn? Why, an apprenticeship program, of course.

Again, Roberts: "I was at a jobsite with the head of the company, and we drove out and I met two new apprentices: They were both 73 years old, first-year apprentices. So, that's an example of finding people with the skill sets."

It is, as long as the apprentices themselves don't opt for retirement. How long are 73-year-old apprentices going to stick around? And apprentice programs are not cranking out enough skilled workers to replace the coming wave of retirement, he said.

The generation coming up behind the 78 million-strong baby boomer generation, the so-called Generation X, born between 1964 and 1980 and with 46 million people, is far smaller. Even if industries can find ways to train workers, there won't be enough of them.

"Everybody is going to be fighting over the next group of people coming up after the baby boomers," Roberts said.

Which leads to Example No. 3. Roberts, once more, recounted the lament of the president of a midsize electrical contractor in the South:

"(He) said, 'We've been in the market for 52 years and we get our fair share of contracts, and now I can't bid on that because I don't have the skill set to bid on them,' " Roberts said.

"He won't go out of business, but where he had 20 jobs going at one time, he's now got only 10 jobs going at one time," Roberts said. "Some people say, 'We can just go to Canada for labor.' Go to Canada? They are just as old. Mexico? They are also old."

Management at all levels is going to have to start to prepare. "The brain power that the boomers have supplied over the past 40 years is draining away," Roberts said. "We're trying to educate our clients on this issue."

The larger companies tend to be better prepared for this big change, but even they are not as prepared as they should be, risk control experts said.

Roberts, yet again, visited a client impacting by its graying workforce, but in this case the client didn't even know how many of its people would be retiring in the next five years. Roberts told his client he would need this information to be able to make informed decisions about the future of his labor pool.

"I got a call back 60 days later from the CFO, who shared that 50 percent of that company's workforce was scheduled to retire in the next five years," Roberts said. "He told me, 'Brian, we have got skill sets which take longer than two years to develop.' "

Risk control and ergonomics experts said that companies are going to have to retool their workplace to fit the needs of an aging workforce. Companies can't keep designing a workplace for a 25 year old. It's the 55-year-olds companies need to be designing for, or else employers are going to find workers suffering from injury more often.

"Once you get to the 45-years-old range, days away from work for a disabling injury are almost double that they are in the 25-to-34 range," said Wayne Clifton, associate vice president of ESIS Health, Safety and Environmental.

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Profits margins of the employer and the insurance companies that cover those workers are likely to suffer as a consequence, Roberts said.

"In some cases, employers are not prepared," he said. "In other cases, it hasn't come up on their radars. Especially with the economy the way it's been; people are struggling to stay alive."

May 1, 2011

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