Nearly three years ago, the DCR blog explored the role that baby boomers play in the U.S. workforce. The term ‘baby boomers’ refers to those born between 1946 to1964. At that time, as the country slowly emerged from the recession, many baby boomers were struggling to find employment after losing permanent positions. Many indicated that they would delay retirement in order to recoup savings lost during the banking crisis those baby boomers. Industry analysts speculated on the impact that delayed retirement would have on career opportunities for millennials as well as the challenges associated with managing a multi-generational workforce.
In this blog, we’re taking another look at baby boomers in today’s workforce.
The Delayed Retirement Myth
The Department of Social Security estimates that today, there are three working Americans for every one retiree, and that ratio will drop to 2 to 1 by 2035. This is driven by an aging population as the entire Baby Boomer generation reaches retirement age.
But, when does this group plan to retire? Are they, as predicted, opting to continue working, further stressing the unemployment situation but alleviating the demands of the Social Security system? Evidence indicates otherwise. Research conducted by Gallup demonstrates that workers today are electing to retire when they qualify for Social Security at the same rate as the “Traditionalist” generation that preceded the Baby Boomers.
The Rise in Part-Time and Contingent Work
What is emerging as a pattern is the number of Baby Boomers who “retire” while also continuing part-time or temporary work. While in some cases this reflects reduced hours with the same employer, many are finding temporary employment in entirely different fields. Those between ages 62 to 66 – the years in which workers are eligible to begin collecting Social Security – are most likely to take on a part-time or temporary position.
Baby Boomer Engagement
Gallup’s study also found that older workers are the most engaged at work, and engagement increases steadily over time. This can be attributed to a number of factors, including the ability to choose work that is more personally satisfying, work environments that offer greater life-work balance, the irrelevance of office politics, and elimination of the pressures to advance or fear of termination.
Measures of workplace engagement are critical, as studies show that retention of older workers has a direct economic benefit. Studies show that older workers actually have the lowest absentee rates. This directly refutes assumptions that older workers will have higher levels of health issues, driving up costs. Turnover rates are significantly lower than for Millennials and Gen X workers. Because Baby Boomers prefer to work remotely, companies reduce facilities costs. All of these factors contribute to an annual savings of $11,000 per Baby Boomer worker.
The Growth in Contingent Work Options
Technological advancements that have reshaped how work is conducted also serve as enablers for the inclusion of older individuals in the workplace. High speed internet, web services, online collaboration through file sharing and virtual meetings have enabled workers to work remotely. Those who dreamed of downsizing and moving to the retirement location can do so while continuing to work when they want to. Practices such as variable work hours and job sharing also increase the motivation to pursue contingent work assignments.
Companies are using contingent Baby Boomer workers in strategic ways. In addition to flexible options regarding when and where the Baby Boomers work, smart companies recognized that the highest educated tend to stay in the workforce the longest, and are offering flexibility in the choice of responsibilities.
In today’s competitive environment, every advantage counts. DCR encourages companies to assess the potential loss of talent, knowledge and skills that comes with Baby Boomer retirement. Establish transition plans that guide those approaching retirement in directions that will continue to benefit your company. Using Smart Track xCHANGE, DCR helps many clients establish an effective alumni system that sustains relationships with retiring workers, offering them opportunities to return for contingent assignments. Let us know if you would like to learn more.
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