Baby-boomer retirement: Demographic crisis or not

Introduction

This blog will be devoted to all four areas of our consulting practice, human resources, coaching, executive search, and plastics packaging manufacturing. You can obtain more detail regarding those functions by visiting our website at www.collectiveknowledgeadvisors.com or more simply, www.ckallc.com.

The topics will be diverse in substance. Many of our upcoming blogs will focus on what some are calling the demographic crisis associated with the baby-boomer retirement wave, which has already begun. We will be discussing such topics as how and why employers should recruit more senior employees, what binds employees to their organization, and what employers can do to obtain their employees' commitment. We will also discuss the fundamentals of coaching and career development, and to a lesser extent plastic manufacturing as it relates to pharmaceutical packaging. Guest authors will also be invited to post essays. {Note: in order to give credit to authors who have been referenced, footnotes will be added in the following manner [1]. All cited references will be listed at the end of the blog}.

Demographic Facts

The current U.S. baby-boomer population, those born between the years 1946 and 1964, is estimated to be between 76 and 78 million[1]. In the year 2000 the baby-boomer population represented 55 % of people between the ages of 25 and 54 in the U.S. At that time the oldest of the baby-boomers was 54 years of age. The 2000 U.S. census reported “a 28-percent increase in the number (of people) aged 35 to 64. As the large generation of baby boomers began passing their 45th. birthday, the population aged 45 to 54 swelled 49 percent during the decade (1990 – 1999), (p. 3)[2].” While the civilian labor force is projected to increase 10% between 2004 and 2014 to approximately 160 million workers, workers in the 55 and over age group is projected to grow by five times the overall growth[3].

According to a 2004 AARP/SHRM survey, approximately 80 percent of the baby-boomer population expects to work after quitting their current full time job at age 66. That statistic is essentially unchanged from a prior survey completed in 1998. According to the 2004 survey, half of the boomer population is over 47 years of age, but a full two-thirds of those surveyed feel younger. That is a 13% swing in the positive direction from the 1998 survey[4].

Will the Role of Older Workers be Reinvented?

The question I pose to our readers is why do the baby-boomers feel the need to quit their current full time job? The next question is will employers let them go without a fight, since according to some researchers virtually all sectors of the economy are on the verge of a serious labor shortage that presents an opportunity for organizations to “reinvent the role of older workers” (p. 243)[5]. They warned that the old age dependency ratio, the ratio of individuals 65 years of age and older to individuals of conventional working age, 18 to 64 years of age would double from 20:100 in 1985 to 41:100 in 2035. They wrote, “just over the horizon looms a demographic time bomb for the nation’s employers and no one has figured out yet how to defuse it"(p. 243) [5]. That notwithstanding, has anyone even thought about diffusing it?

The U.S. economy is not immune to business decision makers ignoring reality until they are literally at death's door as the U.S. automakers were when they did not respond to the threat of higher quality, and more efficient automobiles brought to this country from abroad. Will a similar situation develop when talented and experienced senior employees are permitted to walk away from their organization and into retirement or to another employer whose business, culture and history are unknown to them? In what is certain to be a tight labor market, why would any business executive run the risk of losing decades of talent by not responding to the possible demographic problem posed by the potential retirement of their baby-boomer employees? A subject we will discuss in our next blog.

Glenn J. Forte, President
Collective Knowledge Advisors, LLC
517 E. Lancaster Avenue, Suite 402
Downingtown, PA 19335
phone: 610.269.7851
mobile: 484.880.8862
fax: 610.269.7852
email: gjforte@ckallc.com
http://www.collectiveknowledgeadvisors.com
http://www.ckallc.com

Footnotes

[1] Cramton, S., Hodge, J., & Mishra, J. (1996). Transition - ready or not: The aging of America's work force. Public Personnel Management, 25(2), 243-253.
Quigley, M., & Kaufman, L. E. (2005). Hire calling. Retrieved August 31, 2005, from www.aarp.com.
Shactman, D. I., & Altman, S. H. (2002). Overview: Issues and options for an aging population. In S. H. Altman & D. L. Shactman (Eds.), Policies for an aging society. Baltimore: The Johns Hopkins University Press.

[2] Census Bureau, U. S. (2000, March 2005). All across the USA: Population distribution and composition 2000. Retrieved Dec. 31, 2005, from
www.census.gov/population/pop-profile/2000/profile2000.pdf.

[3] Department of Labor, U. S. (2005). BLS release: 2004-14 employment projections. Retrieved Dec. 31, 2005, from http://www.bls.gov/bls/newsrels.htm
Roper-ASW. (2004). Baby boomers envision retirement ii: Survey of baby boomers' expectations for retirement. Washington, DC: AARP Knowledge Management.
Staff. (1998). Older workers survey (Survey). Alexandria, VA: Society for Human Resource Management.

[4] Quigley, M., & Kaufman, L. E. (2005). Hire calling. Retrieved August 31, 2005, from www.aarp.com.

[5] Cramton, S., Hodge, J., & Mishra, J. (1996). Transition - ready or not: The aging of America's work force. Public Personnel Management, 25(2), 243-253.
p. 243.