Important Workforce Topics: The Boomer Generation
As we discussed in our previous post, Important Topics for the Future of the American Workforce, the boomer generation has had an enormous impact on the workplace, as well as the overall economy. According to research published by Catalyst.org titled Generations in the Workplace in the United States & Canada, there are nearly 60 million boomers in the American workforce as of March 2012, which accounts for approximately one-third of the American workforce. Older members of the boomer generation are now starting to retire from the labor force, making this just the beginning of what will be a long and massive change to the workforce and economy. As boomers exit the workforce, companies must have succession plans in place to avoid a skills gap, plans for retirement must be examined, and we should all be taking a close look at how boomers affect the overall health of the economy.
Boomers & the Retirement Crisis
In the white paper The National Retirement Risk Index: After the Crash, authors from the Center of Retirement Research at Boston College report that “as of 2009, in the wake of the housing and stock market crises, some 51 percent of U.S. households were at risk of being unable to maintain their pre-retirement standard of living at age 65.”
Part of the solution to this retirement financial crisis will be to shorten the years of retirement, reports the LA Times in their article on baby boomer retirement. “Working longer is the key to a secure retirement for the vast majority of older Americans,” notes Alicia Munnell, a Boston College Management Professor and director of the school’s Center of Retirement Research which produced the white paper referenced above.
Adding to the fact that many boomers may need to continue working from a financial perspective, US News reports that “many boomers are far from physically exhausted and often have much more to give. Few of these active seniors have a physical need to retire from the working world.” This situation may keep boomers in the workforce for many years past the standard 65, but it may be in a different capacity. If boomers choose to leave the corporate world, or transition to a role allowing for more flexibility, companies must still have a plan in place to ensure the successful transfer of skills and knowledge crucial to their business.
Boomers & the Unemployment Rate
The number of boomers retiring is currently causing the unemployment rate to appear lower than may be accurate, affecting the overall economy. UPI.com reports that with the oldest segment of the boomer generation reaching retirement age at a rate of 10,000 a day, the Economic Policy Institute estimates that approximately one-third of those dropping out of the workforce are boomers. Whether retirement was a choice or the result of job loss, this affects the way long-term unemployment is reported.
National Employment Law Project Executive Director Christine Owens told the U.S. Senate Special Committee on Aging that “some of the problem can be blamed on age discrimination and industry changes that require older workers to learn new skills,” as it relates to those in the boomer generations dropping out of the workforce as the result of job loss. When judging the health of the overall economy and unemployment rates, this is an issue that should be taken into consideration.
As companies continue to prepare for the boomer generation to exit the workforce, we believe that these topics, Boomers & the Workplace, Boomers & the Retirement Crisis, and Boomers & the Unemployment Rate, are important discussion points.
How is your company handling the impact of the boomer generation on your workforce?