Boomers in Recline
Conventional wisdom is that baby boomers won't leave their jobs unless it's in a hearse, but a new survey indicates that more than half of the oldest among them have put pleasure before business. And that poses both challenges and opportunities for HR leaders.
By Larry Keller
In the MetLife Mature Market Institute's latest survey of baby boomers born in 1946 and turning 67 this year, more than half -- 52 percent -- say they are now fully retired. It's a surprisingly large number in a cohort that includes such very active people as Bill Clinton, Donald Trump and Susan Sarandon. Another 21 percent reported being employed full-time, and 12 percent were retired but working part-time or seasonally. Two percent said they work part-time but don't consider themselves retired.
"People seem to be doing OK, which stands in contrast to some of what we've seen here at the center," says Matt Rutledge, a research economist at the Center for Retirement Research at Boston College in Chestnut Hill, Mass. "I think it seems credible. It could be the [economic] recovery is going pretty well for many of these older people."
Some past surveys, however, have presented a different picture. One in four boomers -- the generation born between 1946 and 1964 -- said they will never retire according to an Associated Press-LifeGoesStrong.com poll conducted in 2011.
"There's a big discrepancy in what people say they are going to do and what they're actually doing," says Sara Rix, strategic policy adviser at the Washington-based AARP Public Policy Institute.
One of many reasons it was thought that boomers would work late into life was financial need. But more than half of MetLife survey respondents said they have reached or are on track to attain their retirement savings goals, and two-thirds feel very good or somewhat confident that Social Security will provide them adequate benefits for their lifetime.
Rutledge is surprised more people didn't report working part-time, because many boomers are doing so out of necessity -- as it is the only work they can find.
More than half of the oldest retired boomers in the MetLife survey said they left the workforce earlier than planned, citing health issues and job loss as the two top reasons for doing so.
"If a high proportion of boomers continue to retire," Rix says, "HR executives ought to think about what it means for their workforces."
Some of them already have. In a joint poll released last year by the Society for Human Resource Management and AARP, 72 percent of HR professionals said the loss of talented older workers is "a problem" or "a potential problem" for their organizations. More than half of them said that older workers have stronger writing, grammar and spelling skills in English and have a stronger sense of professionalism and work ethic. Yet seven in 10 of those polled still hadn't conducted a strategic workforce planning assessment to analyze the impact of workers 50 and older who will be leaving their organizations.
This points to the need for workforce planning, which few organizations actually do, says Steve Coco, principal and northeast region leader at Buck Consultants. HR leaders must become adept at scenario planning, he says, to better prepare for boomers leaving earlier or later than anticipated, as well as better predicting what types of workers in what sorts of positions are likely to do either.
In theory, at least, a larger-than-expected number of retirements by boomers could create opportunities for other older workers who lost their jobs during the recession and have had a tough time finding another job. (According to government data, workers 55 and older were out of work an average of 50 weeks in April, compared to less than 37 weeks for job seekers under the age of 55.)
Rutledge says employers send a mixed message in saying they value older workers' skills, while seldom hiring them.
"In general, [employers] don't seem to be rewarding these older workers for what they perceive they bring to the table," he says. "These are productive workers. There's going to be a really smart employer out there who is going to hire a lot of older workers and make a lot of money."
Rix adds that employers "ought to be thinking about lifelong training. The longer you're out of work, the more your skills atrophy. I think there's more hope for those older workers who want to remain in the workforce longer" than those who have left.
The boomer migration can both hurt and help employers, says Jean Phillips, associate professor of human resource management at the Rutgers University School of Management and Labor Relations in New Brunswick, N.J. It will create more opportunities for career advancement for younger workers, who sometimes feel thwarted by their older colleagues. That, Phillips says, can help retention efforts.
But, she adds, "it is difficult to transfer knowledge without a mentor or person with experience" to help do so. Older workers can help their successors in matters such as learning a company's culture and history, diagnosing problems and continuing good customer relationships, she says. Some fields, such as engineering and the sciences, require deep knowledge that a younger worker can't acquire immediately. "It takes time to sort of apprentice with somebody and learn the nuances of a field," Phillips says.
Coco agrees. Take the politics and culture of an organization, for example. "That's something you can't really train up," he says. "You just know it. The things that are ingrained are harder to transfer over."
Phillips says employers need to create formal programs to help older workers transition to retirement and to ensure a smooth knowledge transfer. "I think organizations are really late in doing this," she says.
They should also be proactive in trying to keep workers nearing retirement age on board part-time, Phillips says. "That buys some time."
Employers can do so by being flexible about older workers' hours, responsibilities and time off, Rutledge says. "I think employers are more flexible about that than they used to be," he says. "I definitely think there is room for more flexibility" without upsetting younger workers not afforded the same options.
"If employers experience greater [worker] shortages ... they will respond," Rix says. "Right now, we don't seem to be experiencing those shortages."
As boomers leave the workforce, HR professionals will also have to adapt more than ever to the different expectations that younger workers have, such as making an impact quickly and achieving work/life balance. Younger workers also seem more inclined to change jobs often, so as they become a larger segment of the workforce, this too will be a growing challenge for HR leaders.
"It increases the volatility in the workforce," Coco says.
That's not necessarily bad, according to Phillips: "I think change is part of organizational growth."