Our workforce can be divided into distinct groups based on year of birth. Each group is considered a “cultural” generation and these divisions are generally accepted. The Baby Boomer generation consists of people born after World War II from 1946 until 1964. Following the Baby Boomers is Generation X for people born from the late 1960s until the beginning of the 1980s. After them came Generation Y or Millenials, born between the 1980s and the year 2000.
Each generation has its own culture, idiosyncrasies, beliefs and perspectives. Small business owners need to take these differences into account when dealing with many important issues such as work-life balance, approach to structure and reward mechanisms. While the Greatest Generation (those who fought in World War II) are no longer in the workforce to a larger extent, the Baby Boomers, Gen Xers and Gen Yers are coexisting. By all accounts, it looks like this coexistence has just been extended.
Baby Boomers are delaying retirement
According to a recent study by the Bankers Life and Casualty Company Center for a Secure Retirement, many Baby Boomers are delaying retirement by an average of five years. This delay is primarily due to the financial condition of the Boomers and their limited retirement funds. According to the study:
- Only 10 percent of surveyed boomers are “extremely confident or very confident” when asked about the adequacy of their retirement savings.
- 38 percent are somewhat confident.
- 32 percent are not too confident.
- 20 percent are not at all confident.
Baby Boomers are facing a difficult financial situation
Combine this lack of confidence in the amount of retirement savings they hold with the elimination in recent years of defined benefit programs and Baby Boomers are in a bind. Making matters worse is that one in seven boomers has NO retirement savings. Nothing. Nearly one-third that do have savings and investments have not recouped the losses generated during the Great Recession.
Beyond the five-year average delay in retirement, the nature of retirement is also changing. It no longer means spending your days fishing in Florida. In order to supplement inadequate savings, Boomers will need to have income-producing work as part of their retirement lifestyle.
What does this Baby Boomer trend mean for business owners
As a business owner, it’s important to adapt your human resources policies to this demographic reality. Your older workers will be around longer. You may have to invest in accommodations that will take into account having older workers in poorer health. Moving to a building with stairs and no elevator may not be a good idea.
You should consider investing more in health and wellness programs at your company. Helping your older employees stay healthier for longer may reduce the cost of accommodations in the future. As the older workers pass retirement age but want to continue working, you may also need to institute flex time policies that will allow for the part-time work they are seeking.
Finally you have to consider the implications of having younger workers who may need to wait longer before they see a promotion. Will you be able to keep them motivated? Will they leave out of frustration? Can you grow your company in new directions to tap the expertise and experience of all the generations in your workforce?
On the flip side, a key advantage for your company is the fact that these seasoned, experienced employees will be staying. This reduces turnover, hiring costs and training costs.
Have you spoken to your employees about these demographic trends? Have any Baby Boomer employees talked to you about staying longer? Let me know in the comments section.