According to demographic data, by 2029 all of the baby boomers will be 65 years old or older, which will cause one of the largest brain drains that the U.S. workforce has ever seen. Over the next two decades, organizations will face an increasing shortage of experienced workers and a significant talent gap.
Impact of Aging Baby Boomers on the Workforce
In order to ease the pain of this talent migration and fill future leadership gaps, companies across the country need to actively prepare by installing programs that encourage baby boomers in the workforce to transfer their skills to younger workers.
Where Brain Drain Will Have Most Impact
What Companies are Doing to Prepare
According to a recent survey by MBA@UNC, the online MBA from University of North Carolina – Chapel Hill, 62 percent of employers at Fortune 1000 companies believe that future retirements will result in skilled labor shortages over the next five years.
However, few employers are actually taking steps to reduce the impact that brain drain will have on their organizations. The survey reveals that 68 percent of employers have not analyzed the demographics of their workforce, and 77 percent have not analyzed the retirement rates of current workers. And only approximately 37 percent of employers have taken some action to prevent baby boomer brain drain.
Experts agree that senior leaders can and should pass on the critical knowledge and skills they possess that are difficult to replace. Multiple surveys find that many senior workers are willing to help train the next generation of leadership.
In order to avoid brain drain, companies should first conduct a strategic workforce analysis. Based upon this, they should refine their retention strategy. This involves identifying, prioritizing, and engaging potential retirees to prepare senior and emerging leaders. It is also vital that organizations create both formal and informal knowledge transfer opportunities.
As baby boomers continue to retire, more millennials are entering the workforce. According to Forbes, millennials will make up 50 percent of the U.S. workforce by 2020.
Millennials Want to Learn from Baby Boomers
Source: HBR, MBA@UNC
New Retirement Age?
A recent study finds that while there will be an upcoming exodus of baby boomers from the workforce, a large number of them plan to keep working at least part-time in retirement. According to the 16th annual retirement survey of 4,550 full-time and part-time workers by the Transamerica Center for Retirement Studies, 51 percent of respondents plan to keep working in some capacity past the age of 65.
Do You Plan to Work After You Retire?
Source: Transamerica Center for Retirement Studies
Older workers (those in their sixties) are more likely to say that thy will not retire at or before age 65, and 18 percent plan not to retire at all. The major motivation to continue working include income and health benefits, and because they enjoy what they do.
“The 60-somethings and older are literally transforming retirement as they retire. They’re blazing new trails for younger workers, but they have their own areas of risk. Their greatest risk is not having a backup plan if they’re forced into retirement sooner than expected due to job loss or family expectation. Only one in three have a backup plan.” ~Catherine Collinson, President of the Transamerica Institute