The aging of the 78 million people who compose the baby boom generation is a big demographic shift that has some observers warning of a labor shortage. By 2014, baby boomers will be between the ages of 50 and 68. Despite this huge part of the population heading into their golden years, the U.S. Department of Labor expects the U.S. workforce to keep growing through 2014.
About 31 percent of those 55 and older were in the workforce in 1984. That number climbed to 36 percent in 2004, and the figure will jump to 41 percent in 2014, according to the Labor Department’s Bureau of Labor Statistics.
The actual number could be higher still, says Norm Saunders, coordinator for research projects in the bureau’s projections program. "We’re going to see a lot of competent older workers who want to work," he says.
By 2014, more than 1 in 5 workers will be 55 or older, according to the BLS. That compares with 16 percent in 2004. AARP research from 2003 found that more than two-thirds of 50- to 70-year-old workers said they plan to work into their retirement years or never retire.
On the other hand, a recent study from consulting firm McKinsey & Co. suggests people may overestimate their staying power. According to the report, 40 percent of retirees were forced to stop working earlier than they had planned, largely because of health problems or job loss. And while almost half of all baby boomers expect to work past age 65, just 13 percent of retirees have actually done so, the study says.
Whether or not they reach their goals, older workers seem driven in part by a desire to make a difference. A study last year from think tank Civic Ventures and the MetLife Foundation found that half of Americans age 50 to 70 want jobs that contribute to the greater good now and in retirement.
Another reason people are working longer is financial need. A 2003 report from the Economic Policy Institute, a Washington, D.C., think tank, said the loss of retirement wealth and the loss of access to retiree health insurance keep older workers in the labor force longer than before.
Boomers may need to rebuild nest eggs lost in the dot-com crash, but to lure them, companies may have to change. A December report from the Families and Work Institute research group concluded that older workers are more likely to continue working when they have more control over their work hours, workplace flexibility, job autonomy and learning opportunities.
If they can win over older workers, employers stand to win, according to an AARP-commissioned report from last year. "Replacing an experienced worker of any age can cost 50 percent or more of the individual’s annual salary in turnover-related costs, with increased costs for jobs requiring specialized skills, advanced training or extensive experience—qualifications often possessed by 50-plus workers," the report says.
Workforce Management, October 9, 2006, p. 26 -- Subscribe Now!