Retirement Age, What Retirement Age?

Friday, October 29, 2010

Most western industrialized nations are facing an aging workforce. In Germany it is estimated that by 2020 the proportion of the workforce over 65 will represent almost 22% of that nation's workforce. In the US, it is expected that Americans 65 and older will account for approximately 16% of the nation’s population within the next 10 years.  Forbes.com reports that by 2010, US workers aged 55 to 64 will account for 52%, half, of the US’s workforce. Furthermore, Forbes reports that many of these workers are not ready or planning to retire anytime soon. Which is both good and bad news for US employers.

The good news is that many of the highly trained, skilled and hard working “baby boomers” will remain in the workforce and with increased longevity will continue to make significant contributions over the next decade.  The bad news is that as those same “boomer” do exit the workforce organizations will be forced to find large numbers of replacements. It is estimated that over the next decade some 76 million baby boomers could potentially retire. This will place an increasing strain on employers as they struggle to find replacements for every level of employee from the factory floor to the C-Suite.

One challenge for organizations will be the management and integration of several generations of workers. As baby boomers remain in the workforce, due to either desire or necessity, employers will find that workers from up to four generational segments will interact with each other on an increasing frequency.  While this interaction has the potential for conflict, it also has the potential for significant synergies if these mutli-generational segments are properly managed and incented.  What incented my father, my older brother or my younger sister may not be what motivates me. To understand how each generational segment integrates and interacts, managers will need to be trained on their differences and similarities.

Consider that each generation has been shaped by their social, political, economic, and technological surroundings as they matured and entered the workforce. While there is often a tendency to focus on the differences between generations, they all share several common threads:

Benefits: what is considered “good” or “important” benefits may differ.

Wages: how each is rewarded may vary but each expects to be rewarded.

Security: what constitutes “job security” will depend on who the worker is.