Sloan Center News
Despite Warnings, U.S. Companies Remain Unprepared for Baby Boomers’ Exodus
17 November 2009—With millions of Baby Boomers poised to age out of the workforce, US companies remain unprepared for the imminent talent desert that promises to alter the productive capacity of business and disrupt the national economic landscape, according to a new report by the Sloan Center on Aging & Work at Boston College.
Overall, nearly 70% of the almost 700 organizations surveyed do not yet know how old their workers are or what proportion is likely to retire. Forty percent stated that the aging of the workforce will have a detrimental impact on their organization in the next three years.
“The out-migration of an entire generation of workers will upset the entire balance of the workplace,” said Marcie Pitt-Catsouphes, Director of the Sloan Center on Aging & Work and report co-author. “Knee-jerk reactions to today’s challenging economic reality aside, US companies need to start planning strategically for workforce sustainability. The current abundance of older worker talent and experience is going to dry up, and businesses will very soon need to fill hundreds, if not thousands, of jobs.”
The report—The Pressures of Talent Management—examined talent management practices at 696 organizations representing the 10 leading sectors of the economy. These types of employers account for 83% of employment and 85% of payrolls in the United States. The companies studied, which range from small enterprises to very large organizations, collectively employed over one million workers.
Additional key findings include:
- 77% of employers surveyed had not analyzed projected employee retirement rates or assessed employee career plans.
- More than half (56%) had not assessed the skills their organizations need today and into the future.
- About one-third of employers reported not having enough programs for recruitment or training of older workers.
Although the aging population will affect companies differently, the long-predicted workforce desolation has generated surprisingly limited responses. In 2000, Baby Boomers (born between 1946-1964) represented the largest portion (48%) of the U.S. labor force. By 2010 this proportion is estimated to decline to 37%, leading some economists to predict labor shortages of 10-15 million in the coming decade.
“Changing age demographics is not necessarily about avoiding pain—it may present new opportunities or competitive advantages,” said Stephen Sweet, co-investigator of the Talent Management Study. “Programs like Abbott’s ‘Freedom to Work,’ for example, are designed to meet the evolving needs of employees nearing retirement, while at the same time meeting business needs by keeping experienced talent longer and ensuring business continuity.”
“Regardless of which factors are driving an organization’s decision-making, workforce planning is simply good business, because this approach helps to ensure that the right people with the right skills are in the right jobs at the right time,” said Sweet.