Exodus of the Boomers
rw-admin | 02/18/2020
BABY BOOMERS RETIRING AT RECORD RATES
Written by Michael Clegg, Managing Partner
We have documented the “Crisis for Talent” several times. Employers seem to be naïve on how tight the labor market has become. The latest Jobs Reports from 2019 and again in January 2020 show that this “Crisis” is accelerating. There are a record number of jobs being created and unfortunately, a record number of workers retiring.
In a previous article (http://qworksgroup.com/2019/06/11/the-crisis-for-talent-has-arrived/) we told the story on this Crisis. We pointed out that “Attracting and Retaining” talent is one of the biggest challenges. More evidence that our Talent Acquisition partners are not effectively communicating these struggles to the decision-makers.
A major point of emphasis that needs to be a focus is the alarming rate that our Baby Boomers are leaving the workforce and the rate that new jobs are being created. 358,000 Baby Boomers retire each month. That is over 4 million experienced employees leaving the labor market annually. Here is where things go south regarding the number of employees available, in 2019 an average of 174,000 new jobs were created each month outside of those that were vacated through retirement. The “brain drain” is causing enough concern with the exodus of a generation, and there are currently more open jobs than people to fill them.
Today, Millennials account for over 1/3 of the workforce and in 2016 became the largest generation of labor. Generation Z is beginning to enter the marketplace. Each generation of workers has different needs and beliefs.
STRATEGIES TO SUPPORT THE LOSS OF TALENT
In 2011, the oldest members of baby boomers reached retirement age and by 2029 the youngest of this great generation will reach retirement age. There are strategies that employers can implement to offset this mass falloff of labor.
- Seek out retired Baby Boomers for “gig” type of employment
- Part-time hours
- Flex work schedule
- Job sharing
- Stagger a reduction of hours over a longer period of time for those seeking to retire
- Structure a formal succession plan or skills transference
Discussing plans with those close to retirement age can be a tricky topic and one that needs to be handled with care. Avoid assumptions and make sure to keep the dialogue open and honest between management and the aging worker. The largest issue that I have found through hours of research is that retiring employees are not open about their retirement plans. They have a fear of being asked to leave sooner than they would like.
The lack of dialogue with older workers stems from low levels of employer engagement with their workforce. There is great evidence when an employee has a trusting relationship, they are very open to communicating their plans. Coaching to create engagement has never been more critical in the workforce. Marshall Goldsmith stated in a Harvard Business Review article in May 2009, “Change the name of the process from Succession Planning to Succession Development”.
How does the retention of all employees fit into the topic of older workers retiring? Retention continues to be a struggle in the workforce. A recent January 2020 Inc. Magazine article (https://www.inc.com/ryan-jenkins/how-to-hire-most-qualified-person-in-future.html?cid=sf01002) states that 46% of new hires fail in their first 18 months costing companies $10k per entry-level workers and $40k per manager. Couple these retention issues with increasing levels of retirement and you have an unstable scenario for companies trying to grow their business.