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If your small business has not started preparing for the mushrooming “retirement boom” that has been building since the first baby boomers left the workforce in 2010, don’t waste another minute. This expanding outflow of workers is shrinking the labor pool at the very time when companies are facing a labor deficit.
Just look at the math. Some 10,000 people turn 65 years old every day. These baby boomers, often leaders and mentors, make up 25% of the workforce. And, while they aren’t all retiring at 65 – 49% say they plan to keep working – 30 million have already stepped away, making this boom the primary cause of the current labor shortage.
The retirement surge will peak in 2030 when the youngest boomers reach retirement age. Meanwhile, a late 2021 survey showed that, on average, Gen Y and Gen Z workers both plan to retire five or six years before they reach age 65.
Add to this a number of other workforce challenges, and a perfect storm faces employers:
With strategic workforce planning, smaller companies can thrive in this increasingly volatile labor market. Here are the essential pieces to a strategy that can help businesses guard against baby boomers’ leadership losses becoming disruptive:
America’s workforce is comprised of five generations, each with its own priorities, motivations and skills. Understanding your employees’ mindsets and expectations will help you to better communicate with them, leverage their strengths and keep productivity high in the midst of unprecedented workplace exits.
While it’s important to avoid stereotypes, studies show that each of the five generations at work generally have distinct characteristics:
seek flexibility but value professional development, growth opportunities and mentorship even more.
Exiting boomers deplete more than staffing numbers. These experienced workers have likely built solutions and operations that should not leave the building when they do.
Document processes and procedures, customer data (e.g., customer relationship management), supplier histories and other vital operational information and practices so you don’t have to recreate the wheel and can minimize disruptions.
Turnover does not necessarily have to trigger costly job searches and time-consuming training. Take inventory to identify what expertise will need to be replaced and what is already on staff. Engage experienced boomers in creating training programs that prepare future leaders to step up when the boomers step away. Continue to assess skills and gaps over time and update training accordingly.
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Create a mentorship program and other initiatives that help grow and retain potential up-and-coming leaders. This demonstrates the company’s commitment to employee career advancement, morale and loyalty – a win-win-win.
Consider offering flexible retirement options, such as part-time roles or dual positions, where the retiring employee stays on to work alongside and train the replacement for a time.
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Because retiring boomers are often leaders at their companies, succession planning is the best strategy when changes to ownership, management or governance of any kind are forthcoming. Partner with experts to lay the groundwork.
Contact Axcet's HR consultants to learn more about how to set your company up to succeed through this historic workforce evolution.
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