It was no surprise; we knew it was coming and once it started, we knew we’d have to ride it out.
It’s a natural cycle, after all. Like the ebb and flow of the ocean, our workforce, and our economy, grew when the approximately 77-million babies born out of the post-WWII boom came of age and built careers.
Conversely, we are experiencing a shrinking workforce as these same workers retire. Indeed, it is the end of an era; a long goodbye of sorts. With the first boomers to hit the retirement age of 65 in 2011, boomers will continue their exit for at least 20 more years.
While 10,000 baby boomers are retiring everyday—that’s four million per year—questions linger over the future of business and what the workforce will look like in another 30 years. However, let’s not fast forward to the end. Let’s take a look at what this means here and now. How can we avoid being caught in the current without a life preserver?
The Ebbing Tide
Labeled the “silver tsunami” with dubious distinction, this massive exodus from the workforce carries significant impact:
- A recent study conducted by the nonprofit Project Equity estimates that the jobs of one-sixth of the employed U.S. population—or 25 million jobs—will potentially be lost as 2.3M business owners are ready to ride the tide to retirement.
- As baby boomers reach 70.5 years of age, they are required to liquidate their retirement savings. Retirement distributions are expected to grow exponentially over the next two decades, which means more will be pulled out of investment funds than will be put in.
- As a generation retires, so does its skills, knowledge, experience, and work ethic. Boomers are often considered a walking trust of organizational knowledge.
The studies and stats may paint a dark picture, but it doesn’t have to be so gloomy. With fore-thought and preparation, small businesses and large organizations alike can position themselves for a strong hold as their oldest workers retire.
Managing the Exit
Forward-thinking managers will have a plan for replacing these employees. However, some older employees may not be ready to quit working. It may be possible to retain your older employees by offering them reduced hours, flexible scheduling, and training to upgrade their skills. Is your business culture open to these alternative work scenarios?
For those small business owners looking to retire, they will either have a family member to turn the keys over to, or some other line of succession in place. If that hasn’t been planned for, they will look to sell the business. About a third of business owners currently in this position are having difficulty selling their businesses unless their employees are willing and able to join together in such a purchase, essentially saving their own jobs.
Even with the best planning in place, the only practical solution may be to recruit replacements from the outside. Knowing in advance when an employee will be retiring can be a great asset in managing how the recruitment and transition is handled.
If you have a strong, experienced recruiter on your staff, it’s not too late to start developing a plan to address these situations. Here are a couple of ideas you might implement:
- Build a candidate pool. Your recruiter may already have a strong candidate pool from which to draw. If not, it’s a good time to build that pool in support of your expected retiree turnover.
- Enact a referral program. Your best talent likely knows other high performers, as well as other candidates that you may talk to in your recruiting efforts.
- Hire a recruiting firm. If your staff is overwhelmed with recruiting tasks, hire a professional firm to assist them in seeking and screening candidates. With the right help, you’ll be able to ride the wave in to shore.
As always, we are here to provide you with professional recruitment services to assist your business thrive not just survive the silver tsunami.