Author and speaker Ken Dychtwald shares his views on baby boomers' new attitudes about retirement and what businesses should be doing to keep them working.
A Booming Brain Drain
By Sara E. Savage
Author and speaker Ken Dychtwald shares his views on baby boomers' new attitude about retirement and what businesses should be doing to keep them working.
Ken Dychtwald has sounded a wake-up call to the business community, urging employers of all sizes to begin examining the process of retirement, from planning for it to living out a longer retirement, in an age of unprecedented longevity.
Dychtwald, a psychologist, gerontologist and well-recognized authority, speaker and writer on the subject of retirement, says the 80 percent to 90 percent of workers who believed they would enjoy retirement find they feel unhappy and unfulfilled once retired, and often, less prepared financially.
"If you go to Webster's Unabridged Dictionary and look up 'retirement,' it says, 'To disappear.' We saw that model of life, going to the sidelines and being set out to pasture, did not actually create happy retirees," Dychtwald says.
In The New Retirement Mindscape Study, Dychtwald maps out five emotional stages of retirement and explains how and why our view of retirement has been shattered. In the study, as well as in his newest book, Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent, he characterizes the boomer generation as "trying to make the transition from success to significance" long after they are expected to have exited the workforce. HR needs to discover ways to recruit and retain workers of all ages, he says.
Human Resource Executive® writer Sara E. Savage sat down with Dychtwald recently in an exclusive Q&A to better understand what he thinks human resource executives can and should be doing to hold onto pre-retirees and rethink older workers' job structures altogether.
We probably all agree we're facing a whole new landscape when it comes to retirement, especially the "brain drain," as you describe it, which will occur when baby boomers exit the workforce. What was it, more specifically, that you were hoping to learn and accomplish through your latest study?
One thing I know about demographic shifts is they don't occur like lightning bolts. They're more like coral-reef creations. They sort of evolve slowly, but they evolve nonetheless. For decades now, as I've been watching this birth dearth and this baby boom moving [ever so slowly] along with a growth in the number of older adults, I've been quite taken by the fact that these changes are going to have profound and dramatic impacts on the availability of workers, the challenge of recruiting and retaining workers, and the whole notion of when a person should retire, when companies can afford for them to retire and how companies prepare for these demographics.
About four years ago, I formed a collaborative project with the Concours Group, a global HR and IT consultancy based in Kingwood, Texas, and we set out to try and make sense of what the major changes were going to be for the world of HR and the world of business productivity as a result of these changing demographics. We had 35 companies participating with us--including Johnson & Johnson, Fidelity and Hewlett Packard.
What we became aware of, as we began to examine demographics, was, No. 1, there were some enormous shifts taking place in the workforce and, No. 2, most companies were completely oblivious to them. What's more, with the right preparation and the right moves, some of the crises, the problems and the stresses could be easily prevented.
Most people were talking about retirement as though it were a sort of on-off switch -- that you weren't retired and then you were. That seems extremely simple-minded. People were talking about it as if it were an economic event. If you think about it, every other major life event has got a before, during and after map.
What does HR need to know about baby boomers and retirees in order to prepare correctly for the new workforce?
We're about to see changes for which there is no precedent, no track record and, often, no language. My company continually takes on research and think-tank projects in which we try to take some piece of this change and illuminate it, break it down and try and figure it out; create a map of the phenomenon and the future.
That's one of the most interesting and challenging parts of all this, because if we think we understand what 60-year-olds are like and then simply say, "Well, when the boomers come along, they'll be just like that," we make mistake No. 1. Because if there's anything we've learned about this generation, it's that they're very different from the generation before them.
Can you provide an example?
Detroit learned this lesson in the 1960s. They assumed, "Well, we've got these fantastic automobiles; they have a particular look and style. When these boomers start getting their drivers' licenses," they said, "we're going to sell twice as many," and they didn't because the boomers had a completely different point of view and desire for what they wanted an automobile to be.
The medical field had the same experience: "This is what we provide in medicine, and when the boomers come along, this is what they'll consume." And, of course, the boomers had this enormous appetite for alternative medicine, prevention, wellness and health foods. It's transformed not only medicine but the field of nutrition as well.
[Boomers are also watching the group before them.] Half of today's retirees are unhappy, many are bored. They're restless, they feel disoriented; they feel rudderless, without a purpose. They feel that retirement has let them down, and they got sold essentially a bill of goods promising that 20 or 25 years of leisure, watching TV and playing golf would lead to happiness, and it has not.
In your estimation, why should HR, employers and the business community in general care so much about what retirees and pre-retirees are going through?
First of all, if employers think they're going to have an unending stream of young workers, they'd better think again, because the numbers are diminishing. During the 1990s, the number of 18-to-34-year-old Americans shrank by 9 million people.
Second, there's a lot of talent represented by the boomers, and the truth of it is, if they all walk out the door, the impact will be seismic.
Third, many people over the age of 60 feel they need to keep working because they realize they may live 20 or 30 more years and because corporate pensions are becoming less reliable. We've seen in our studies that there are a large number of people in their 60s, and I would say even early 70s, who are healthy, productive, loyal, skilled and talented. Why would you want to throw them out the door just because they had a birthday?
If you're an employer trying to attract and retain the best talent, you've got to be aware of what ingredients are going to be available in your kitchen. People always imagine that growth comes from the next young generation [but that could be changing]. Holding onto that 60-year-old or 70-year-old and maybe even retraining him or her, which runs counter to the way most HR people think about their talent flow, may turn out to be the next revolution in HR.
The idea of reinvesting one's career can be enormously liberating and energizing. The new model of retirement would not only include this sort of point of transition, but the possibility of new skills, connections, people and affiliations, and maybe even the possibility of unpaid work.
How will HR be affected directly by this age wave and by an older workforce?
There's no question that HR managers are going to be . . . trying their best to retain some of the talent in the boomer generation, and maybe even reaching out and bringing in the skills and abilities of people who have already retired, and are seeking to re-career.
There are a variety of ways in which younger workers are far more expensive than older workers and don't give you as much of a return on your investment.
For example, training. There's about three times the amount of training that goes to young workers than to older workers, but you'll get more years back from training a 50-year-old than you will a 23-year-old who will take that skill somewhere else. Companies just don't add it all up.
It's the idea of viewing older workers as ambassadors of your organization's continued learning, new skills and abilities. Medicine is going to be right up there at the top of the list. Doctors and nurses are going to be in short supply with an aging population. Rather than trying to find some nurse just graduating from nursing school in his or her 20s, maybe you could train somebody [in a particular nursing specialty] even though [he or she may be] over the age of 40.
What people want is a new blend, a new balance between work and leisure. Perhaps they'd like phased retirement, or to go down to four days a week, or three.
How can HR go about devising a strategy that can retain the wisdom of the baby boomers, as well as recruit the younger workers coming up?
Having studied retirement for more than 30 years, I'm not sold on it as an institution. My model would be more like this: In this era of greater longevity, the people who seem to be the most turned on, most empowered and most comfortable with their maturity have found a way to reconnect even part-time with something that's productive.
Any degree to which financial-planning courses and seminars can focus on lifestyle and psychological twists and turns, as opposed to just money, [adds value to such benefits].
For some people, the health-care benefit may be the reason they continue working. I've seen examples of companies that bring talented 50- and 60-year-olds into work, maybe only half-time, but by providing that health-care benefit, they can get the best of the best.
It may be a continuance of the same job, but in a more flexible way. Maybe you have a full-time employee, and now she's working on projects as a consultant. For others, it might mean a more radical change. Maybe someone's been the head of marketing, and now he or she teaches high school. Or maybe a hard-driving lawyer decides it's time to join the Peace Corps.
Treat [an older worker] with a certain degree of respect and regard. There is so much age bias in the workplace, in the music that's played in the background and the emphasis on job personnel ads for young blood, new energy--everybody sort of knows these are code words for "young." [HR needs to continually] recognize that in a 50-year-old or 60-year-old, or conceivably even a 70-year-old, there may be an enormous reservoir of skills, talent, capacity, loyalty and commitment.
[With regards to providing sufficient funds for retirement,] one of the advantages of the 401(k) is that it puts less of a burden on the balance sheet of the company [and puts it into employees' hands]. One of the disadvantages is that a lot of workers don't feel tethered any longer, so they might jump [ship] or jump across the street to a competitor.
On the other hand, I would like to see companies not only giving workers the opportunities to fund their own retirements, but also providing a little bit more of the education and motivation to do so. I'm very troubled when I see the low levels of participation in 401(k) programs.
What you're creating is a pretty large chunk of today's retiree population who simply will not be able to retire because of the absence of funds. The more workers are cognizant of that, and the more they are also taking very active responsibility for maxing out their 401(k)s and any other tax-advantage instruments made available to them, the [better for all] in the decades to come.
If our older workers are to stay in bigger and bigger numbers, do you see HR having a problem with age discrimination?
Yes. Boomers are a feisty and ornery group, whereas previous generations have been very self-conscious [and quietly so] about their age. There've been some cases of litigation when members of the latter group have been discriminated against, but usually these older workers just sort of go quietly out the door. The boomers are going to arm themselves for battle.
HR will see a rise in discrimination lawsuits, and there will be a lot more media coverage. We'll [especially] see more and more articles reminding people that it's illegal to discriminate based on age in almost all jobs America.
What do you think is the best way for companies to make the most of the baby boomer generation, particularly in terms of productivity?
Keep them turned on. The boomer generation defines success from the inside out. Our parents defined success from the outside in. For our parents who had been raised in the shadow of the Depression, having a good job, earning a good living and having a nice home and family was really the American dream.
The boomers define success by, "Not only do I have a good job, but how do I feel about my job? Am I earning a good living? How do I feel about my livelihood?" It's a generation for whom psychological satisfaction, engagement and excitement [is profound], along with the feeling that they're really doing something that's utilizing their full potential.
Maybe people would like part-time assignments or working on projects, cycling in and out of the workforce.
When you've got two-thirds of boomers feeling that they're not engaged, that they're not being utilized to their full potential . . . you're also losing out on what could be some of the greatest productivity gains you'll ever envision.