The Nearly New Workforce: Boomers Are Reinventing Retirement
In the Western world, the baby boomer, as the largest demographic group, has for the past five decades dominated societal preferences in all major sectors – public, private and not for profit. Today, their dominance continues to be felt as the first wave of boomers (born in the late 1940’s and early 1950’s) begins to enter the world of retirement.
At present, boomers control over 80% of personal financial assets and have 50% of the discretionary spending power. They represent over one-half of the consumer spending group. Seventy-eight percent of boomers are now online and spend more money and time online than any other demographic group. Boomers spend, on average, 40 hours per month and $650 per three month period online. This compares to $581 and $429 for Generation X and Generation Y, respectively. This is not surprising given that the boomers have the largest portion of discretionary funds. It tells us that this demographic group plays a large part as consumers.
So how do we continue to access this discretionary wealth and keep it growing? By encouraging boomers to stay in the workforce.
These ‘nearly new’ members of the workforce will have a beneficial effect on income growth, pension plan payment levels and, at the business level, the pending skills gap.
In Canada, the 55-plus population exceeds 8.5 million and is growing at more than twice the rate of the total population. In the United States, sixty-four million boomers (40% of the labour force) are poised to retire within the next few years. (In Europe and Australia, the situations are similar).
Aging of boomers, and if they choose retirement at the age of 60 – 65, will slow the income growth in these countries which will result in slower GDP growth. With fewer people working, there is a reduction in labour force participation rates – a factor critical to GDP growth. With higher labour participation rates, through longer careers, members of the workforce accummulate more assets, tapping into them later in life. This raises the overall GDP level.
So work longer, save and spend more money, pay more taxes, access less retirement monies – everyone wins. (See McKinsey & Company, “Why Baby Boomers Will Need to Work Longer” Economic Studies, November 2008 and Moses Znaimer, “Dust Off Those Resumes and Reset the Alarm”, Zoomer Magazine, March 2011 and Lino Ko, “Baby Boomers, Still an Important Luxury Customer” in eMarketer, April 2011 for more information and discussion of these issues).
There are also collateral benefits to all employers, no matter what their sector, encouraging boomers to stay longer in the workforce. The pending skills gap is predicted to affect all lines of business by the year 2012. Most industries will face labour shortages at all levels of the organization. Boomers are the most highly skilled demographic group and dominate management levels. There is an opportunity now to be proactive and prepare by utilizing the knowledge, skills and experience of boomers.
Boomers are well educated, resourceful, and willing to change.[nbsp] (Note the online activity of boomers mentioned earlier in this article). They like trying new products and services and believe they are able to withstand just about any challenge thrown at them. They welcome challenge, integrate easily into any type of work environment, and enjoy sharing their knowledge and expertise.
By 2015, more than one-third of the labour force will be over 50 years of age. Whether boomers want to continue to work for financial or self-fulfillment reasons, they are desirable candidates for any business. They are ready-made coaches and mentors for the next generation of leaders.
Organizations must take advantage of this expertise and establish the right enviroment conducive to attracting, and retaining, boomers in the workforce.
At some point, soon, the ‘perfect storm’ will arise and businesses will find themselves struggling to find the skills and leadership they need to continuously grow and generate the next level of revenue. Without a plan to attract and retain boomers, the skills gap will be untenable.
Steps to take to attract or retain boomers:
1. Create alternative models of work. Boomers appreciate flexibility. Open your mind and your work environment to part time, short-term contract, telecommuting opportunities.
2. Create new boomer benefit packages. The aging boomer is seeking more health care support. Consider redesigning benefit plans aligned with their needs and interests. Additional areas to consider are those that relieve physical ailments – physiotherapy, chiropractic and massage therapy.
3. Take advantage of the expertise and recruit boomers as advisors, coaches, mentors or hands-on support to meet the various short-term needs of your business. Why not hire a boomer to build your marketing plans and products rather than paying to support an in-house marketing team? Why not hire a boomer to address inventory management or scheduling issues? Why not hire a boomer to mentor your junior employees? They want to continue to work contributing to the growth of business.
Boomers are a demographic group, not a specific function or discipline. Their dominance is felt across all lines of business and aspects of our society. Welcoming this ‘nearly new’ workforce into the nex two decades of work will foster continued income growth and reduce the strain on our health care and pension systems, as well as contribute to the ongoing success of all areas of our society.
Article by: Donna Stevenson is the owner of Boomer Match to Business (BM2B). She is an expert in employee engagement, working effectively with all three generations. Donna and her partner’s business is a matching service, matching boomer experts to the short term needs of business owners and managers. BM2B’s portfolio of boomers include experts in business expansion and growth, sales and marketing, communications, training and development, finance, process improvement, inventory management, human resources, mergers and acquisitions, and; many more. Their experts have the characteristics and experience necessary to step into any business environment, take on any business challenge, and create bottom line success quickly. BM2B provides expertise to grow your future.
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