3 Ways to Prepare for the Retirement Boom
This is the second post in a series about how to thrive amid shifting workplace demographics.
The United States workforce is being shaken up. Within the next decade, as key office demographics change, corporate America will look and function very differently than it does today.
Last month, I explored how women are leaving the corporate world and starting their own businesses — finding more career opportunity and fulfillment in the process. Today, I'll explore a topic leaders have been hearing for a while, but not yet heeded: Baby boomers are reaching retirement age. And just like women, retirees are primed to become competition for the very organizations they decide to leave.
Companies need to do some major prep work to get ready for the huge demographic shifts headed their way. At the same time, there's a lot of uncertainty around when — and how quickly — boomers will leave the workforce.
The Silver Tsunami — or a Light Drizzle
Baby boomer retirement means over 40 percent of the 9-to-5 corporate workforce will be gone in the next decade.
However, the "Silver Tsunami" many economists predicted has not come to total fruition — boomers may or may not retire on time, due to the economy and their pension funds. If they do retire, organizations will lose a lot of talent. Retiring baby boomers are going to be hard to replace, because Generation X is relatively small and millennials have a different concept of how they want to work.
If the baby boomers don't retire? Organizations are still not in the clear. Healthcare and pension costs are going to skyrocket and organizations will have personnel challenges that range from keeping an older workforce up-to-date to figuring out protocol when a boomer reports to someone who's young enough to be his granddaughter.
Goodbye — or See You Later
Some retirees will say sayonara to the workforce for good. One of my manufacturing clients is facing the traditional retirement challenge: The company has plants where more than half of its workers are at least 58 years old. If it doesn't replace the work pool very soon, it risks having to shut down the plants.
But other clients are facing a more modern challenge of the retirement boom: For white-collar companies, the likely risk is that "retiring" boomers will walk out, start their own companies or consulting projects and come back as competition. Recent studies show nearly two-thirds of workers ages 16 to 64 prefer a gradual transition to retirement, and a report from the Kauffman Foundation found that baby boomers are twice as likely to launch a new business this year as millennials.
Whether boomers retire full-time or continue their career as their own boss, companies need to prepare for how departing talent will impact their workforce
So, how can a company prepare for the loss of baby boomers? Start with these three tips.
How to Prepare for the Retirement Boom
1) Start an intergenerational mentoring program, often called reverse mentoring. Match a baby boomer employee to a millennial or Generation X employee, and set aside time for the pair to teach one another new skills. Baby boomers are extremely skilled at in-person relationships and office politics. They've learned how to navigate a huge number of personalities in school, on teams and at work.
Gen X can teach something that both the boomers and millennials often lack: focus. This comes from their ability to look at things unsentimentally. Additionally, Generation X's perceived cynicism makes them great Devil's Advocates — a skill that can be very helpful for the other generations to master.
So what can millennials teach boomers and Gen X? You guessed it: technology. They are the digital natives. If you're Gen X, you're a digital immigrant. If you're a boomer, you're the parent of the digital immigrant, still living in the old country. But that's not all millennials have to offer — they can also teach how to improve innovation, and give a global perspective to solving problems.
2) To bridge the knowledge gap, institute flexible work options for baby boomers, making it possible for them to continue to work part-time or part-year on their own schedule. An AARP study found that what baby boomers wanted most at age 65 was financial security, better health, travel, and time with family and friends.
A flexible work arrangement can help baby boomer employees reach their goals, while also helping your organization with efficient and progressive knowledge transferring. For instance, you can institute a job-sharing program where a baby boomer shares his or her job with a member of a different generation to mentor throughout the process.
3) Invest in education and training programs for younger employees or prospective talent. From internships to shadow days for local high school students, you can initiate training programs to prepare younger people with the skills they need to enter the workforce, potentially in your industry and organization.
The mass departure of the baby boomer generation is certainly a shake-up that requires strategic preparation, but the changes won't end there. Preparing for the loss of the boomers also means preparing for the entrance of their replacements — younger generations and minorities — including their skills, their workstyles and their career expectations.
Stay tuned for another post in this series on changing workplace demographics next month!
Photo: Creative Commons