The youngest baby boomers are around 55 years old, the oldest are over 70. Most Americans do not remember another workforce, apart from this generation of adults.
However, as boomers reach their final years in the workforce, their retirements are taking companies by surprise.
Over the next five years, nearly three-quarters of the companies surveyed in 2018 by Willis Towers Watson, an insurance and risk management brokerage firm, expect to face significant challenges due to late retirements. But since nothing is predictable, they are also worried about the initials.
Companies said they were more concerned than before about the cost of older employees, and the challenge of replacing the knowledge and skills that these workers will take with them when they retire. The increase in concern about “the blockage in the promotion of young employees by the elderly” was not as strong, although about two-thirds of respondents acknowledged they were a little worried.
The survey included 143 human resources managers in companies that together employ about 2.9 million people, and was analyzed in a working document distributed last February by the National Office of Economic Research.
Managers were asked to compare the business challenges of employee retirements in the last five years with those that will occur in the next five years. In each category, companies considered a major challenge in the coming years.
The respondents were not part of a random sample, and their experiences can not be considered representative. However, they suggest a broad concern in the business world, of dealing with an aging workforce. We did not have this information available otherwise.
Reason 1: It’s hard to plan: the retirement dates of boomers are an elusive and mysterious target
A record number of Americans plan to work for longer. A Gallup poll conducted in April 2018 showed that 41 percent expect to work beyond 65 years of age, a big leap since Gallup began tracking the issue, in 1995, when it averaged 13.5 percent.
The age required to receive full Social Security benefits has also increased. Americans born before 1937 were eligible to receive them at age 65. When the oldest boomers were born, in 1946, the retirement age increased to 66 years. The boomers and others born after 1960 will not receive the full benefits to 67 years.
Workers are not always transparent with their employers about their future plans, said Alan Glickstein, managing director of Willis Towers Watson, who helped oversee the survey. “There is a lack of quite significant relationship, knowledge gaps between what employers and employees think,” he said.
They may not know each other well, or even if they do, they may be reluctant to discuss their financial situation or become vulnerable to being replaced by committing to a retirement date with their employer.
While some people will only retire when forced to do so, Glickstein said, “many of the older employees work mainly because of a financial need and not because they want to be in the workforce until they reach age 70.”
In 2017, Mary Jordan and Kevin Sullivan, of the Washington Post, reported cases of people who had been forced to continue working well beyond the normal retirement age, often until the age of 70.
“Fundamental changes in the US retirement system have shifted the responsibility of saving from employer to worker, resulting in a dividend between rich and poor of the nation,” wrote Jordan and Sullivan. “Two recent recessions devastated personal savings, and at this time 10,000 baby boomers are turning 65 every day, Social Security benefits have lost about a third of their purchasing power since 2000.”
Reason 2: Workers and employers are confused: Nobody knows what ‘retiring’ means
As more workers become consultants or accept temporary or sporadic contracts, their relationship with employers changes. The bonds of the boomers with their employers can be stricter from the start. It is more likely that their ties will disappear little by little, and not in a farewell ceremony, with the delivery of a good gift.
“You wonder what retirement is,” Glickstein said. There is no longer “a magical moment, in which you stop working completely,” he added.
It is expected that the proportion of companies that offer older workers a part-time job and fewer hours will increase considerably.
Approximately two out of five companies surveyed consider offering part-time work or flexible hours by 2020, almost double the current rate.
Others hope to keep older workers with reduced responsibilities on the campus, and a small but growing minority is offering options that combine volunteer work with traditional employment.
Reason 3: In some industries, the boomers will be very difficult to replace
Four out of five manufacturers, and two out of every three employers in the mining and nonprofit sectors included in the survey, were concerned about the loss of talent when it is time for their senior employees to retire. Employers in the retail and service sectors did not show much concern about it.
This tends to show the dependence of each sector on the older workers, but the individual industries within each sector vary considerably. According to our analysis of the American Community Survey of the Census Bureau, funeral homes, religious organizations, bus drivers, florists and real estate agents retain more than a third of their staff above 55 years of age.
At the other extreme are industries that tend to rely on a younger workforce, such as stores, restaurants, electronics stores, movie theaters, and stores. In those fields, less than one in seven employees are about to retire.
In many industries, employers also face great uncertainty about who or what will replace a retired boomer , Glickstein explained.
The respondents reported that the “loss of specific knowledge of the company” would be an increasingly complex challenge, as would be “finding workers with similar knowledge and skills”.
As technology advances, it is possible for a robot or computer program to assume some of the responsibilities of an employee when he or she is ready to retire. That means that the employer replacement strategy will evolve along with the technology.
And because boomers are the first generation to face the task of passing on their knowledge to machines and computer programs – as well as apprentices and junior employees – it is likely that setbacks and tensions will arise
Source LA TIMES, The Washington Post
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