Here's Why Boomer Retirements Continues & the Skills Gap Widens [Infographic]
Boomers are the generation born between 1946 and 1964. The generation’s oldest members attained retirement age (65 years old) in 2011, while the youngest members will retire in 2029. By that, roughly one-fifth of the US population will be 65 or older, and around 10,000 baby boomers are predicted to reach retirement age every day between 2011 and 2029.
Every year, millions of baby boomers leave the workforce in the United States. According to a Pew Research Centre review of monthly labor force data, the number of retiring Boomers climbed more in the past year than in previous years. Around 28.6 million Baby Boomers were out of the workforce in the third quarter of 2020 due to retirement.
This represents about 3.2 million increase above the 25.4 million Boomers who retired in the same quarter of 2019. Until this year, the overall number of retiring Boomers had been increasing by roughly two million each year on average since 2011 (the year the oldest Boomers retired), with the biggest jump of 2.5 million between the third and fourth quarters of 2014, this may be due to the COVID-19 recession’s job losses which may be contributing to the increase in Boomer retirements. The number of retiring Baby Boomers has climbed by around 1.1 million since February 2020. Some of the rises could be due to seasonal shifts in employment activity.
However, the number of retiring Boomers increased by only approximately 250,000 from February to September last year. In September, 40% of Baby Boomers had retired, up from 39% in February. Some demographic groups have seen a bigger growth in the number of retirees in years. The percentage of Boomers 65 and older who are retired have grown 2% points since February, while the percentage of Boomers younger than 65 who are retired has remained steady at 18%.
With the number of Baby Boomers leaving the workforce and the number expected to retire in the next few years, employers will need a solid manpower plan to replace existing workers. There are not just enough Generation X workers and Millennials lack the necessary professional experience. Flexible or remote workers aren’t suited for every role, and foreign-born workers frequently encounter immigration issues. These sources, when combined, can provide a part of the additional workers your company will require to address the skills gap caused by retiring Baby Boomers.
There are fewer individuals to replace retirees in professions that need specific practiced skillsets when the baby boomers retire. This is causing a “knowledge gap” in which there is a strong demand for specialist professionals who have yet to enter the workforce and get the requisite training to replace more experienced workers.
Employers will have to consider not only the impact of the skills gap that the mass exit of Baby Boomers will cause but also the wants and expectations of younger Generation X and Y workers who will be replacing them.
One of the options for filling the skills gap is to keep baby boomers staff on the job indefinitely. However, be careful, according to Gallup, only 16% of adults work full time (and 17% work part-time) by the age of 68, although many baby boomers indicate they want to work into their 70s (or possibly forever).
Employers might be able to fill the gap in skills by hiring remote workers. This will help you gain access to job seekers from all over the country (and the world), but will also appeal to employees who choose to work from home.
Adding the flexibility to work from home can help employers recruit new employees and retain existing ones. However, it will almost certainly necessitate a cultural shift as well as meticulous planning for logistical, management, and personnel problems.
Companies can also prepare for the loss of older workers by increasing training and development programs, improving benefit programs, hiring mid-level talent to develop a skills pipeline, increasing mentoring and knowledge transfer, hiring senior-level talent to replace retiring employees, and offering flexible and/or part-time work arrangements to attract and retain older workers.
Employers can also provide phased retirement options that allow Boomers to retire gradually while still have time to train successors. Consulting, part-time work, flexible hours, telecommuting, and specialized project work are examples of these arrangements.
Creating a Baby Boomer knowledge transfer and replacement program that concentrates on senior staff on transmitting their knowledge to others during a 12 to 18-month pre-retirement term may be another solution.
Complete retirement at age 65 is not financially feasible for hundreds of thousands of Baby Boomers, and Social Security benefits will not be accessible until the age of 67 for those born in 1960 or later. As a result, many baby boomers will need to work part-time in order to support themselves and their dependents.
Employers can continue hiring Boomers because of their experience and confidence. They’re engaged, active members of the professional world who can contribute considerable value to companies. It has also been proven that they’re a vital professional group to keep an eye on. Therefore, instead of leaving a skill gap, companies can continue hiring boomers to fill the gap.