In earlier Data Point Tuesday posts (here and here) I’ve recommended the Bureau of Labor Statistics’ website as a treasure trove of talent management related data. Another great source of useful information is SHRM, the Society for Human Resource Management.
SHRM’s research group works tirelessly to bring relevant, actionable trend and survey information to its members. And if you aren’t a member (why aren’t you?), the value of SHRM’s research services alone is more than the cost of membership. *
Workplace Visions is part of SHRM’s Workplace Trends and Forecasting program and is published multiple times each year – as new data become available. The reports are useful signposts for new developments that impact organizations, talent management and HR professionals.
The first such report published this year is “Changes to Retirement Benefits: What HR Professionals Need to Know in 2012” (member protected). It’s full of useful observations about changes coming to 401(k) plan rules, Social Security changes to keep an eye on and great data from EBRI (The Employee Benefits Research Institute).
One of the discussion points piqued my interest: data from EBRI about the reduction in confidence by Baby Boomers that they will have enough money in their retirement years to live comfortably. See the chart below. This has big potential impact for employers.
The aha! is that while a steady stream of Americans still plan to retire in their early to mid-60s, many more workers are unsure when they’ll be able to retire – or if they’ll be able to retire. As you can see from the chart, in 2007 70% of EBRI survey respondents reported some level of confidence in their retirement plans. That number fell to 49% in 2011. SHRM also cites data from Towers Watson surveys with similar outcomes.
What does this mean for talent management professionals? Well, SHRM thinks that providing a stronger hand in retirement planning and financial education for Baby Boomers will help reduce retirement-related anxiety. I absolutely agree.
Additionally, though, SHRM counsels HR professionals to “weigh the positives and negatives of employing an older workforce.” They counsel that “older workers are often costlier to keep on board, due to higher salaries and health benefits costs.” Woah. The thought that employers will have robust options besides Baby Boomers and other older workers to staff their organizations isn’t supported by the demographic trends.
My take is a little different. Here’s what the data say:
- the U.S. population is growing more slowly leading a more slowly growing civilian work force (
- the Baby Boom generation moves entirely into the 55-years-old+ age group by 2020 and will represent 25.2% of the work force (up from 13.1% in 2000)
- the “prime-age” labor cohort (ages 25-54) is projected to drop to 63.7% (from 71.1% in 2000) of the work force
So the engagement, development and retention of Baby Boomers and other older workers will be a very critical part of most organizations’ talent strategies because they’ll make up 25% of the available work force. Providing incentives to stay, financial education for pro-active retirement planning and unique engagement strategies — among others — will all be part of talent strategy in 2020. There won’t be any weighing the positives and negatives of employing an older workforce. But there will be significant effort spent in figuring out how to keep the Baby Boomers’ skills, talents,and organizational knowledge in play in the work force — and in our organizations.
At 25% of the available workforce, there won’t be other options. We won’t be able to succeed without Baby Boomers.
*Full Disclosure: I am SHRM’s former Chief Operating Officer