This article was updated on July 16, 2018.
It's not uncommon to see baby boomers delaying retirement. According to the ADP Research Institute® Workforce Vitality Report (WVR) for the first quarter of 2017, the age group that's 55 and older continues its climb, distancing itself even further from the other age brackets in the study.
This age group experienced 4.8 percent job growth during the first quarter of 2017, more than any other age group, according to ADP. This signals continued growth in this specific boomer demographic, but what are the implications for employers and the workforce itself? There seems to be key focal points for employers to be aware of relating to this older age group:
- Many of the workers in the top end of this bracket still need to work
- There is greater demand for these workers and their skills
- The key opportunity for employers is to connect this group with millennials
These signal an opportunity for organizations to engage, retain and utilize this demographic to the fullest extent.
Baby Boomers Delaying Retirement Due to Finances
Many baby boomers are working, or are planning to work, for the foreseeable future. The Employee Benefit Research Institute (EBRI) reports that 26 percent of workers plan to work until age 70, and another 6 percent say they will never be able to retire. For comparison purposes, an EBRI study from 1991 showed that 50 percent of workers expected to be able to retire by age 65.
According to Money, more than half of baby boomers have less than $50,000 saved for retirement. That means the dream of retiring and wandering around a golf course could be unattainable for a sizable portion of the population.
Baby Boomers Delaying Retirement Due to Employer Demand
At the same time, baby boomers have incredible value to offer, and many employers have realized this and have responded with targeted retention programs. The critical part of the conversation is this: baby boomers often have valuable tribal information that has not been passed down to their younger peers, and they are retiring every day. According to Pew Research Center, baby boomer representation in the workforce is reducing steadily, with approximately 10 percent reduction forecasted in the next 10 to 12 years.
However, employers can keep these knowledgeable senior workers around with a targeted talent management strategy. For instance, CVS Caremark has a particularly innovative program where older workers that move south during the cold seasons of the year are offered positions that align with their lifestyle choices. The "snowbird" program allows pharmacists and other high-value workers from northern states to transfer each winter to pharmacies in Florida and other warmer states.
Another firm, the Aerospace Corporation, allows employees to enter retirement as early as age 55. Retirees are allowed to work up to 1,000 hours per year at their old pay rate and can continue contributing to the business while phasing into retirement with less financial strain. These are just a few examples of the firms that want to retain their baby boomer populations.
The Implications for Younger Workers
Of key concern for the rest of the workforce is how this impacts them. You can't turn around today without hearing a conversation about generations in the workplace. Baby boomers, Gen Xers and millennials have a varied mix of needs and personalities that organizations need to prepare for.
The latest WVR indicates continued growth in every age group, not just baby boomers. At the same time, there are challenges that younger workers have to overcome, such as the stigma of job hopping or not having loyalty to their employer. The exciting opportunity, as discussed in the ADP Research Institute® report, Strategic Drift: How HR Plans for Change, is in providing learning opportunities for millennials and other workers to help them become more engaged.
Bringing Out the Best in Each Generation
By connecting seasoned baby boomers with eager millennials, organizations can reap the benefits of both sides of the equation. Baby boomers have value and purpose, continuing to contribute to the workforce in a positive way. In addition, millennials have mentors with the experience and knowledge to challenge and develop them in the critical early days of their careers.
Time will tell how we see this shift in baby boomers delaying retirement, but it's clear that there is an opportunity to continue making use of the appreciating value this demographic brings to the table. The best employers, those that are focused on engaging their workers and enabling their best performance, will seek out ways to leverage their boomer populations in the years to come.