The baby boomer generation, those born from 1946 to 1964, has reached retirement age.
Until recently, the boomer generation made up the largest employee group now that they are retiring, leaving a gap in the workforce. Millennials aged 18 to 34 will outnumber the boomers starting this year, but they can’t replace the experience that boomers take with them into retirement.
Insurance Journal reports that the share of Americans in the workforce is at its lowest in four decades. For the two years ending in 2013, 80 percent of the drop in the labor force was due to retirement. Even with the rebound in the economy the number of boomers exiting the workforce has remain unchanged since 2011.
Many older workers have stopped looking for jobs and others are finding new work opportunities in other areas. According to the AARP, one in three boomers is still in the workforce, but 35 percent have turned to a different career.
So why are boomers leaving the workforce, and what can businesses do to stop the knowledge drain.
The Factors Behind the Boomer Exodus
Baby boomers don’t necessarily want to retire. In fact, research shows that fewer boomers are retiring because of economic uncertainty and changes in the workplace. The recession forced many to delay retirement to rebuild savings, and more jobs are knowledge-based so older workers can stay on the job longer.
However, boomers also look at their jobs differently. Millennials are entering the workforce in droves, and many of them are assuming management roles alongside Generation X. Boomers now find themselves reporting to managers the same age as their children. In addition, some boomers have trouble keeping pace with the latest technology; the same technology that Millennials have been weaned on.
Baby boomers often find themselves at odds with younger employees in the workplace. Boomers have a different sense of corporate loyalty, a different style of communication and a different perspective on the workplace. Where Millennials expect total transparency and rapid advancement, boomers still expect to be rewarded for hard work and promoted based on corporate commitment and personal achievement. When these corporate generations clash, older workers often start looking for the exit.
Boomers Departure Impacts Business
The baby boomer exodus is having a profound effect on American business. When they retire, the knowledge they have accumulated walks out the door with them, and the new generation of workers have to start from scratch, without learning from older mentors.
Businesses can apply a number of strategies to offset the brain drain and keep the boomers around as useful contributors to the business:
- Be more flexible – Give older workers flexible hours, better health benefits, and other incentives to get them to stay.
- Create a new role for older workers – Give older workers responsibility to act as mentors and train new employees. Acknowledge their contribution and ask them to pass on their expertise.
- Offer consulting work – Many older workers don’t want to retire but they do want more time to spend with their family. Consider offering older workers part-time or consulting work so you can retain their expertise without paying a full-time salary.
Businesses have to find ways to now accommodate the aging workforce. Keeping experienced employees on the job longer lets you take advantage of their experience, pass that expertise along, and eliminate the challenge of filling the gaps with less experienced employees.
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