Are Businesses Prepared for Boomer Retirements?

The pig in the python is coming out the other end.

There are two sets of issues. Both affect business but in very different ways. The first is that companies are losing an asset known as 'tacit knowledge,' the ability of long-time employees to enhance their productivity and effectiveness because they know how to get things done. Whether it is maneuvering around the system's quirks, knowing the people who make things happen in order to reduce time wasted or understanding how to coax optimal performance out of recalcitrant tools - or bureaucracies - experience is hard won and not easily replaced.

The second set of factors has to do with the changing demands of customers as they age, move and adjust to reduced incomes. Which requires business to rethink its product and service mix, sales propositions, competitive landscape and ultimate value.

All too often, businesses assume that buying new technologies will address both sets of needs. But as experience has demonstrated, technology is only as good as the training, satisfaction and commitment of the employees hired to manage it. JL

The Huffington Post reports on an AARP Study:

As baby boomers reach retirement age and leave the workforce, their exit may cause problems for unprepared businesses, according to a recent study conducted by AARP and the Society for Human Resource Management.

The study, which looked at how businesses plan to move forward when boomers retire, found that 72 percent of HR professionals saw the loss of expertise as a "problem" or a "potential problem." Yet only 5 percent of organizations have implemented policies and practices to adjust to their potential losses -- and 27 percent said they were just beginning to be aware of the issue.
When asked about gaps in basic skills between older and younger workers, 51 percent of respondents cited "writing in English (grammar, spelling, etc.)" as an area in which older workers had an advantage. In terms of applied skills, 52 percent said older workers had an advantage for "professionalism/work ethic."

By 2018, almost all baby boomers will be age 55 or older, affecting the labor force significantly, according to the Bureau of Labor Statistics. The population is projected to age rapidly, bringing the median age of the labor force over 40.5, the median age in 1962, the highest before baby boomers entered the work force.

The issue that retirement could create for businesses is daunting, considering a rise in boomers retiring since 2008. Some 45 percent of 65-year-old boomers in 2011 were fully retired, up from 19 percent in 2008, according to a MetLife study.

As younger workers enter and begin sharing the workforce with post 50s, their attitudes on the workplace have been shown to be radically different, according to "No Collar Workers," a study conducted by MTV. Half of millennials studied claimed they would rather be unemployed than work at a job they hate. Seventy percent of younger workers also said they needed “me time” at work, compared to just 39 percent of boomers.

Additionally, when asked what was needed to produce their best work, boomers responded: “Give me my objectives and get out of my way,” where younger workers responded: “I need flexibility, respect … and snacks."