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Boomer Reality
May 10, 2007
By Holly Dolezalek
For a couple of years, everyone was having a fit about what was billed as the upcoming workforce crisis. "In 2010," we read everywhere, "there will be a shortage of 10 million workers, and the competition for talent will be savage."
Most people have settled down from that hysteria, because it turned out the shortage would be much smaller, and it was difficult to predict what it would even mean since not every industry would be affected the same way. But it is true the baby boom generation is approaching retirement, and the succeeding generation is much smaller. While not everyone will feel the pinch, some companies will feel a monster drought in the years to come as boomers retire and nobody steps up to take their places.
But the real leading edge of that drought will take a while to arrive. There will be an initial retirement wave when the first boomers retire, but the baby boom generation spanned almost 18 years of crazed postwar fertility, and the last people counted in the generation were born in 1964. Those folks aren't likely to leave any time soon. The youngest won't turn 65 until 2029, and that's assuming they even want to retire. The American Association of Retired Persons has been surveying the workforce regularly since 1998 to document the retirement plans of employees, and all indications are that retirement is not necessarily what they're looking forward to. "Consistently, between two-thirds and 80 percent of the respondents to those surveys are planning to work full or part time into their retirement years," says Joe Nathan, spokesman for AARP. "Not all of them specified what year they would retire, but we have members who continue to work into their 80s and some who never plan to retire at all."
The generation that was making a scene on American college campuses in the late 1960s was still technically being born in 1964. The U.S. Bureau of Labor Statistics estimates that 78 million people were born between 1946 and 1964. Given that the U.S. population is a little more than 300 million, and the succeeding generation (Generation X, born between 1965 and 1976) includes only 49 million people, you can see why the boomers long have dominated the national scene and why they will leave a significant gap when they leave the workforce altogether.
As the boomers age, so will the workforce. Although the percentage of people ages 65 and older in the workforce in 1950 was 26.7 percent, by 1985 it was just 10.8 percent. But by 1998, that figure had climbed to nearly 12 percent, and in 2006 it was at 15.4 percent. That figure will keep rising, and this means the workforce will be more and more dominated by people who are older and close to retirement.
Since the baby boom often is described as the postwar generation, many think that most of the births came immediately after World War II. But a glance at the birth numbers year by year shows that the generation as a whole really picked up steam in 1959, 15 years after the war. That year, compared to 1946 (when approximately 3.4 million people were born, the smallest number in any year of the boom), saw the birth of more than 4.3 million people. As you can see in the chart below, the baby boom is actually bigger at the end than at the beginning, which means some of the strongest effects of their retirement are likely to arrive after 2014 and will continue similarly through 2028.
Clearly, the retirement of the baby boomers is going to cause significant shortages of talent in the years to come. The whole workforce won't suffer, but certain industries will feel the pinch, and individual companies may find themselves in the awkward situation of needing people they simply can't find. For example, the manufacturing industry, government at all levels (federal, state, and local), utilities, energy (oil), the chemical industry, and aerospace and defense companies all tend to have a lot of older workers whose retirement isn't far off.
So even if the boomers won't start to retire next year, and many won't for many years, now is the time to start safeguarding your talent pools against retirement, career changes, and just plain labor shortages. By retaining your younger boomers, you can avoid the rush when the demographic shift starts making itself felt.
By having a sense of what these boomers want from their work and their situation, you'll be in a better position to give them what they want and get what you need, and increase your chance of retaining them, to boot.
First, it's important not to assume all boomers will want to retire at age 65. Many will, but some will retire earlier and some will retire later, and some won't retire at all. No generation or even slice of one can be typified broadly, but one assumption seems safe: Most employees, no matter what their age, want to make a difference and contribute something to their workplace. Most boomers grew up in an era of intense competition (with their fellow boomers) and most understand their value is in their contributions, not their age or their rank in the company. "People work for a mix of motives—they enjoy what they're doing, they need the money, they like the social satisfaction—but the important thing to understand about older people is that they work because they want to, and they're not just hanging on until they die," says Richard Fein, author of The Baby Boomer's Guide to the Workplace (Taylor Trade Publishing, 2006).
But partnered with that desire to contribute is an understanding of the workforce as an uncertain place where reverses can come overnight. Fein explains that most people, young and old, understand that the higher their wages are, the more at risk they are of being laid off when times get tight. Boomers, having been in the workforce for quite some time, understand this dynamic all too well, and they want to learn new skills and improve their value to the company just like Gen Xers or Gen Yers, the more so as their salaries increase.
Boomers also may face more significant bottlenecks to moving up through the ranks due to their experience and level within the company. "When they want to progress, these employees won't want to hear, 'Sorry, you'll have to wait until someone retires,'" says Gretchen Alarcon, vice president of human capital management strategy at Redwood Shores, Calif.-based software company Oracle. "Many companies are using their succession planning process to find these people who are blocked this way, and to let them know that although an ordinary promotion isn't possible just yet, there are other opportunities for advancement, such as a rotation through another division or a high-profile project or a parallel move with slightly more team management or complexity. This keeps that employee engaged and feeling like he or she is learning more, becoming more valuable, and preparing for an upcoming advancement."
Along those lines, it's worth knowing that while this won't apply across the board, many boomers may be more willing to relocate for a promotion or a new assignment than younger employees are. For example, a manager with many years of experience and kids who have left for college might be receptive to relocation. "Particularly for companies with widespread networks of local offices, they might think about providing training to a cohort of 50-year-olds who can take those local management positions," explains Tammy Erickson, executive officer and member of the board of directors for The Concours Group, a human capital management consulting firm in Kingwood, Texas. "Many companies complain that Generation Xers don't want to relocate, because they're tribal and more likely to stay in an area where they've formed relationships. But boomers might be on the lookout for something new."
Finally, although many boomers may have learned differently, some members of this generation may have a less-than-impressed view of the generation that follows them (i.e., Generation X, born 1965 to 1976). Especially if you're considering a mentoring program or other methods of knowledge sharing across the generations, it's important to get a sense of whether this is true of the boomers in your company. "My personal pet peeve is when I hear boomers spouting off about the 'negative' characteristics of Generation X," says Erickson. "For example, if an Xer passes up a promotion because it requires relocation, a boomer might think the person is lazy or a slacker or lacks self-confidence. But Xers grew up when layoffs were rampant. They might have seen their parents lose jobs when they were teenagers, and to them the idea of uprooting themselves or allowing the whims of a corporation to move them around sounds crazy."
To get a sense of the specific training needs of the boomers in the workplace, think of the employees who are aging out of the workplace in three separate groups, suggests David DeLong, president of research firm DeLong and Associates in Concord, Mass.:
• Those who are aging but will be relatively easy to replace (i.e., salespeople in less specialized industries, retail store managers, or middle managers in government agencies).
• Higher-skilled employees and managers (i.e., an engineer at a defense contractor or an aerospace company).
• Highly skilled employees and managers (i.e., a world-class expert in chemical engineering or a systems engineer).
DeLong says the second two groups are the most obvious focus for training and development. Both groups, he points out, are difficult to replace and require costly and time-consuming training. Many boomers at a company may fall into these two groups.
"Employees in the second group are likely to get trapped in roles where they aren't given additional training or development opportunities," DeLong says. "They really are adding value to the organization, but that organization is likely to fail to motivate or develop them to ensure their late-career success. Employees in the third group, on the other hand, are extremely costly to replace, and often the leadership of an organization underestimates their importance until after they're gone."
Their very experience may seem to disqualify them from the normal training a company offers, and many employees seem to drop right out of the training budget once they reach a certain age. But it's important not to neglect this group. Their frustrations with blocked careers and frustrated aspirations, described as "middlescence" in a March 2006 article in Harvard Business Review, can cause them to leave when your company needs them the most—or just before it needs them the most.
Mentoring can be a way to solve this problem. It lets the company capture these employees' valuable knowledge before they leave, and it can give boomers that sense of contributing something valuable and encourage them to stick around longer. But don't rely on the feel-good aspect of mentoring to encourage older workers to participate. There needs to be something in it for the mentor.
"Especially if retirement is a long way off, nobody wants to be treated as a lame duck," says Rocky White, vice president of business training and development services for the Rockhurst University Continuing Education Center, a continuing education center affiliated with Rockhurst University in Kansas City, Mo. "If you teach others everything you know how to do, you might feel like you're just asking for an early exit. So without trust and some incentive, the mentoring relationship might not work from the start."
One answer to that, according to DeLong, is to offer in exchange for mentoring the kind of flexible schedule that many who are approaching retirement might covet, such as a three-day-a-week schedule or a six-month hiatus from work. "If they take you up on that, you have to build in a commitment on their part to mentor and pass along knowledge as they scale back their work commitment," he says.
Also, try to avoid thinking of or framing a mentoring program as either succession planning or a brain dump. If it works, it will have both of those effects, but it's really about building a network of relationships among older and younger employees that enriches the entire company. "You don't want to develop a mentoring program for succession planning only," says Susan Enyeart, curriculum manager for the Rockhurst University Continuing Education Center. "It's a valuable benefit of the program, but that goal causes people to go in with a different mind-set. Instead, building a network of relationships makes it possible to tear down the barriers between the generations—boomers, Xers, Yers—and make information flow more freely in your organization."
The brief period of semi-hysteria about 2010 had one good aftereffect—it got companies thinking about what happens when the boomers retire. Not everyone is on the same page, but Oracle's Alarcon says she's hearing more companies talking about succession planning, career development, and flexible offerings as preemptive moves to deal with the consequences of that retirement. "I heard a discussion at a recent user conference about a company that was using a cafeteria plan to offer benefits according to interest level, rather than having the same plan for everyone," says Alarcon. "For example, older employees could take more advantage of flexible schedules or medical benefits, while newer employees might have more interest in vacation time or career growth opportunities."
Alarcon encourages thinking more flexibly about the way employees move through a company. For example, she says, different employees may have different aspirations than you think. The logical progression at a company may be from director, but that doesn't mean all managers automatically want to become directors. One may, while another is happy being a manager or wants to move into a position with less responsibility, not more.
It helps to think less about positions and more about talent pools, or groups of people who could be considered for a given position when it opens up. Through the performance management process, Alarcon says, information can be gathered about employees' career aspirations, contentment with their current role, and desired training opportunities.
"Think about all your boomers who might be retiring in a 15- to 20-year range," she says. "Who would you like to keep around in that range? What do those individuals want? What does that tell you about possible development directions for them?"
DeLong says many companies, despite the demographic realities that are going to make themselves felt beginning in just a few years, are more concerned that they have expensive workers on their payrolls than with future difficulties. "The last 20 years have seen a lot of downsizing, and the result is companies that have many workers in their 50s and 60s and many in their 20s and 30s, but nobody in between," DeLong says. "But in many professions and industries, there will be such a shortage of younger talent and so many leaving that there will be serious competition for replacements, and organizations will have to focus on retaining boomers, or on recruiting them away from other companies. In the long run, it would be easier and smarter to invest in the younger boomers now."
Boomer Bios
Name: Susan Enyeart
Company:Rockhurst University Continuing Education Center
Title: Currently, manager of curriculum. In July 2007, it will be director of curriculum.
Job Description: Manage the curriculum department and supervise the content development and design staff for all of the center's learning materials and products.
Age: 45
Years Working: 29
Retirement Plans: "I haven't begun seriously thinking about it. I'm planning for it financially (I suppose I'll eventually retire), but I plan to continue working as long as I'm able to provide a meaningful contribution to the success of the organization. Besides, my new boss has told me that he's already lost one valuable person to retirement, so I can't even consider it. However, when I do retire, I'll definitely work in some capacity. I'll either contract, work part time, or do volunteer work."
Career Change Before Retirement: "I can't imagine it—I love what I do. I've been working in the training and education industry for nearly 20 years. While during that time my career hasn't changed, the way I do my job, how training is conducted, the training needs of companies and individuals, and the training options available to individuals definitely have changed. If you stay in this industry long enough, you don't need the variety of changing careers."
Training and Development Needs to Feel Like You Are Contributing to Your Company: "I'm fortunate that I work for a training company— and one that is steeped in educational values through our parent company, Rockhurst University. Our organization places a high value on training and education and encourages us to seek out and find not only ways to learn and develop skills but also opportunities to serve on educational committees, consortiums, boards, and other membership organizations."
Name: Rocky White
Rockhurst University Continuing Education Center
Vice president of business development
Serves as part of the organization's leadership team focusing on providing training solutions for organizations throughout North America
55 | 37
"Assuming I have the health and longevity of my ancestors, I intend to work until age 70. When I retire, I probably will be working part time."
"I intend to work in the same career until retirement. To date I have had six career changes over the last 37 years.
"Because we are a training organization, I am provided with all the training I desire. As an example, we recently developed a strategic plan for the business development group, and we were provided with the training and consultation to develop and implement the strategic plan."
Sidebar: How to Teach a Boomer
Boomers are like everyone else, but their needs from training are just a little different than those of Generation X or Y. Here are a few thoughts to keep in mind.
In previous generations, if you were older, you were probably in charge. But in today's upside-down workplace, where layoffs and restructuring often mean age no longer necessarily corresponds to authority, boomers can easily be in the position of learning a new skill from someone who could be their child. Be aware of that age difference and try to mitigate the situations where this is the case.
"Younger workers probably will get excited about new technology, but older workers may find it intimidating, and they may want more information about why they need to know this," says Richard Fein, author of The Baby Boomer's Guide to the Workplace (Taylor Trade Publishing, 2006). "They're not necessarily challenging the usefulness of it, but they will want to know how it helps them."
Older workers may not understand the technology or take to it right away, and they may need more practice to get the hang of it. But older doesn't mean slower; it means older, and you can set them up for success by saying that some people need to practice more and some people need to hear more about it, and you're here for both needs.
Technology is not just technology; there are whole sets of behaviors around it, and someone who can't use it is locked out of understanding those behaviors. "I tell people they should learn how to use TiVo," says Tammy Erickson, executive officer and member of the board of directors for The Concours Group, a human capital management consulting firm headquartered in Kingwood, Texas. "It's not because TiVo is especially important at work, but it's important to understand the time-shifting that is going to become more and more prevalent in today's workplace. I also tell them to learn how to text message. They may not ever need to send one, but they do need to understand how the younger generations use them. A boomer might say, 'Let's meet Friday at 2 p.m.' But an Xer is more likely to say, 'I'll text you, and we'll decide when and where to meet.' That behavior, more than creating the message, is important to understand."
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