The fact is inescapable: our workforce is aging. The implications, for companies of all sizes, are unavoidable. As an IBM survey of HR directors concluded: "When the baby boomer generation retires, many companies will find out too late that a career's worth of experience has walked out the door, leaving insufficient talent to fill the void."
An Aging Global Workforce
EU —Over the next two decades, the 50-64 age group will increase 25%; the 20-29 age group will decrease 20%.
Japan —Nearly 20% of the current population is over 65. The Japanese workforce is expected to shrink 16% over the next 25 years.
US —During this decade, workers aged 55-64 will increase by more than half while the 35-44 age group will decline 10%.
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"The good news for employers and the economy is that most baby boomers would rather not walk out the door," says Terry Ebert, Managing Director of Career Transition Services at The Ayers Group. "As we discussed in the Ayers Report last fall, studies show that a large majority of older workers want to keep working in some capacity and many are actively reinventing themselves for new careers. This is driven in part by the need to supplement retirement income at a time when life expectancy and health care costs are rising but pensions have become less generous. But money is not the whole issue."
"Retirement is abhorrent to this generation," adds Dr. Peter Olsinski, Director of Consulting Services in the firm's New York office. "Climbing the career ladder is no longer important. But they are looking for continued challenge, stimulation, and the opportunity to be part of something meaningful. It's a time for pursuing the passions in their lives. They recognize that may mean making less money and, in our experience, are willing to deal with it pretty honestly."
"...baby boomers fundamentally will reinvent retirement."
2005 Merrill Lynch Report
"...working in retirement, once considered an oxymoron, is the new reality." – Conference Board
"Baby boomers have been changing the world since the 1960s. They're about to do it again by turning the world of work upside down."
The Economist Special Report:
The Aging Workforce, February 18, 2006
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Valuing an asset
Nearly 75 percent of 1,400 global companies participating in a Deloitte survey last year said they expect a shortage of salaried staff over the next three to five years. But studies indicate that few seem to be looking to older workers to fill that shortage.
"Many potential employers tend to undervalue what older workers bring to the table," Ebert says. "But then, so do the workers themselves. We see it quite often."
"The leading edge of the baby boom still has the old hiring mentality, that age is a negative rather than an advantage, " says Ayers' Senior Vice President Doug O'Connor, CFP. "It usually comes out at our first meeting with a 55+ candidate: 'Will I ever be able to find a job again?' As we work with these candidates on positioning, they begin to recognize the depth of the resources they've accumulated over the years."
"They think their skills and expertise are outdated," says Dr. Olsinski. "For some of the larger companies that may be true, but not for startups, growth companies, and companies that have downsized a lot of expertise out the door. That's why so many older executives are succeeding as consultants."
"I worked with a candidate who spent her entire career at one company before losing her job, " says Senior Consultant Shelli Kanet. "Her expertise was in a particular product, and over three decades she came to know every nuance of that product and every vendor. She and a colleague parlayed their network, knowledge, and experience into a consulting business. Another candidate—an operations executive in his late 50s who thought he'd never get another job—is selling his experience and expertise at an hourly rate to companies that want to outsource. There are countless examples."
"As we work with candidates in this age group, we're finding they have so much to offer, not only as consultants, but as employees, " Dr. Olsinski says. "They don't need long training or development processes. It's pretty much plug and play. Studies show they're the most motivated, engaged, and committed workers. Add dependability to that and it translates into a high level of productivity.
"They're typically better at processing complex information and drawing on experience to solve problems, dealing with crises, and engaging in experimental innovation," he continues. "I had a candidate who was a former company president and wanted to do something different. We got him into the federal government's senior executive program and he became one of the chief innovators assigned to improving efficiency at the U.S. Postal Service."
"A former client—executive of a company that was acquired—has found the perfect new role as corporate ombudsman inside the merged organization," Kanet adds. "Because of his long-term loyalty and commitment, his vision, perspective, and wisdom, people from the top down trust him. He has also found an outside career as an author and speaker on the subject of change management."
"The bottom line is that age-advantaged workers offer a high level of value," Ebert concludes. "They can be a bargain because of what they bring to the table. And the AARP is right: 'As a nation, we cannot afford to waste this capital.' "
The Ayers Report will continue this series on the aging workforce over the upcoming 2006 issues.
Terry Ebert