After World War II ended in 1945, millions of American military personnel returned to a country transformed. The United States had pulled itself out of the Great Depression of the 1930s, doubling the size of its gross domestic product in just a decade. In fact, its industrial output comprised close to half of the world total. Along with this newfound peace and prosperity came an extraordinary rise in U.S. birth rates, an eruption that was sustained for the next two decades. Close to 80 million people were brought into this world as a result of that explosion—hence the moniker “baby boomers.”
Now, more than 40 years after the first wave of the baby boomer generation entered the U.S. workforce, they are starting to leave it. Over the next few years, millions of people are expected to retire, which some have suggested will create a massive vacuum of leadership, knowledge and experience across organizations and industries. Just how significant this trend will be—and to what extent learning and development can play a positive role—depends largely on a few demographic factors. A big part of the problem, though, is that much of the conversation around these issues so far has verged on hysteria. Some moderation and restraint is called for to explain exactly what the ramifications of these dynamics might be and how enterprises can cope.
“Discussions have started, but some of the people have started hyping it like it’s Y2K—you know, the world’s going to come to an end,” said Robert Rosen, chief information officer at the National Institute of Arthritis and Muscular, Skeletal and Skin Diseases at the National Institute of Health, which is within the Department of Health and Human Services. “I don’t think that’s the case. In order to remain credible in these discussions, you can’t be that way. You have to talk about what the situation is, what the resources are, what the resources are going to be, and how we fill the gap. You can’t just wave your hands and say, ‘the sky is falling.’ The sky’s not falling.”
The baby boomer generation currently makes up more than a third of the working population within the United States. (Note: For the purposes of this article, boomers are defined as anyone born between 1946 and 1964.) Members of this group are definitely approaching retirement, if they aren’t there already. However, it’s not as though they’re walking out the door tomorrow en masse and taking their collective skills with them. There are a few things to keep in mind before panicking. First of all, the earliest part of the baby boomer period was also the smallest. The “boom” peaked in the late 1950s and early 1960s, meaning the largest segment of this generation is presently between the ages of 45 and 50. It will be more than a decade from now before the bulk of boomers are eligible for retirement. Additionally, as with subsequent generations, a sizeable percentage of the baby boomers have abysmal levels of personal savings. Experts estimate that as many as a quarter of boomers would have to live entirely on some assortment of pension checks, 401(k)s and Social Security payments, the combination of which would not meet the 75 percent standard (that is, they should be able to cover three-quarters of what they currently earn to live comfortably in retirement). “There are some people who have looked at that and said, ‘Well, maybe I’d better work a little bit longer to build up a bigger nest egg before I retire,’” Rosen said.
Many boomers might not even want to retire, though. After all, this is a group that is generally very productive and many genuinely enjoy what they do. They often identify themselves with their occupations, much more so than people from generation X and the millennials. Because they’re so closely tied to their jobs, they might opt to stick around for as long as their physical and mental health permits.
Still, there’s no denying that a significant number of baby boomers will exit the workforce within the next couple of decades. In fact, this phenomenon is already starting to creep in. “I think the ball’s already rolling,” Rosen said. “We have seen some cases. Some friends I’ve talked to have bemoaned the fact that they are losing some critical person to retirement. The snowball has started down the hill, and more and more people are going to be recognizing that this is an issue that they’ll have to deal with. You see companies starting to recognize that this is something they have to start thinking about. Certainly, recruiting companies, headhunters and those kinds of people have been talking this up, and it’s somewhat self-serving, but they are trying to raise people’s awareness of the issue.”
Who will replace them? Well, the younger boomers, for starters. This generation spans nearly 20 years, so many of the experienced professionals from this group will remain in the workforce for a relatively lengthy period. However, taking the long view, one can see that by 2020, the reigns will be firmly in the hands of two other age groups: the generation Xers and millennials, which also is referred to as generation Y. (Although there are significant disagreements as to the exact birth years of these two demographic categories, they’ll be defined, respectively, as 1965 to 1979 and 1980 to 2000 in this article.)
Although boomers largely fueled the technology explosion of the latter half of the 20th century—for example, Apple CEO Steve Jobs and Microsoft founder Bill Gates were each born in 1955—it can’t be said that this generation grew up with the kinds of technology prevalent in corporate environments today. However, most members of generation X came of age with many of these technical tools and solutions, and millennials have never really known a world without them. Therefore, both of these groups tend to grasp technology intuitively, and usually find it more appealing (at least initially) than boomers. Despite this commonality, though, there are very distinct cultural and demographic differences between the two successor generations.
Just as anxiety-inducing as the imminent boomer retirements is the low number of generation Xers available to replace them: The individuals in this group number only between 30 million and 50 million. (The debates over their actual birth years have caused the amounts to fluctuate radically.) U.S. birth rates in the early- to mid-1970s fell to levels lower than even the worst part of the Great Depression years. On the other hand, the millennials were the result of a spike in births, and their span of natal years is at least a full two decades by almost any measure. Not surprisingly, then, they are much closer to the boomers in terms of population, totaling between 70 million and 80 million. Additionally, one out of three millennials is not Caucasian. One of their main characteristics is they disregard authority figures if they believe these superiors are treating them unfairly, said W. Stanton Smith, national director of next-generation initiatives at Deloitte & Touche USA, LLP. “Whereas a baby boomer just might not like having to work on Saturday for a project, a generation Yer will say, ‘Listen, Mr. Manager, did you plan properly so we could have avoided this?’ They’re just not interested in accepting at face value that someone in a position of authority knows what they’re doing. If you try to use your rank over them in any way, they’ll just blow you off. But generation Y people are very willing to be mentored by competent adults. They very much prize people who can really help them.”
For the time being, the main differentiator between these two groups is professional experience. Obviously, the generation Xers have more of it, but it’s the kind of experience they have that makes them the linchpin in this coming demographic transition. Unlike the millennials, the oldest of whom are just starting their careers, most of the generation Xers have been on the economic roller coaster for some time now, and gone through booms, recessions and recoveries. They’ve also witnessed firsthand the rise of technology and how that’s impacted business. In short, they have more experience with change in their organizations and industries, and change is the key to future survival in the marketplace. One shouldn’t overlook the millennials’ latent ability to contribute, though. By all accounts, they’re technically adept, quick learners and hard workers.
The International Angle
So far, this discussion has been limited to the United States. The fact is, though, these trends will have an even greater impact on developed nations such as Japan, France, Germany and the United Kingdom. Birth rates in these countries have continually declined for several decades now, with the result being that more than 20 percent of Western Europe’s population is now age 60 or older. With even more money spent on public entitlement programs for retirees, and fewer and fewer workers to replace them, this demographic shift presents a much greater challenge to organizations in those countries.
For the time being, enterprises in the United States and abroad have relied largely on immigrants and sending work overseas. This strategy will probably continue to be employed to help bridge the gap between job openings and qualified professionals available to fill them, Rosen said. “For the sake of argument, say we do have this tremendous shortfall of people that we need. What will happen? They’ll either increase the H-1B visas to bring in more foreign people to try and fill those positions, or the work will migrate offshore. That’s not a good thing for the U.S., but it doesn’t mean the world’s going to come to an end.”
Although looking to other countries might help alleviate the problem, it’s not an entirely satisfactory solution, particularly where skilled positions are concerned. The shortfall of workers might lead to a talent war that surpasses the one that took place in the late 1990s in both length and intensity, and learning professionals can expect to be on the front lines.
Education: A Weapon in the War for Talent
Organizational learning and development are—or should be—a central component of the strategy in this war for talent. Robust and relevant training can be an effective way to bring in and keep top performers. “These young people have expressed to me that they know there’s going to be fewer of them, and it’s important that they learn as quickly as they can,” Smith said. “Young people want to be able to develop in many different ways within one organization. They want to be able to go deeper in one area, or go into a completely new area. An attitude that says, ‘Come grow with us, and you won’t burn bridges moving from one area to the next,’ is what they’re looking for. That’s what they consider loyalty.”
For companies that want to compete, this will entail an increasing focus on modalities that meet the demands of a new kind of learner, technical whizzes who want from their learning the same qualities they’d find in their entertainment media: portability, on-demand access, excitement and interactivity. This means podcasts, wikis, simulations and other cutting-edge delivery techniques. “Today, we have to recognize the kind of environment that exists,” said Randy Vest, senior director of U.S. training at McDonald’s Hamburger University. “Being able to see how folks are engaged and their interests are stimulated is being able to see a little bit of the future. We’re constantly looking at what’s next. In the training business, it has to be on the cutting edge of that, as opposed to trailing behind and trying to capture the pieces and apply them along the way. It really needs to look forward as much as possible.
“We’ve already turned that corner, especially here,” he added. “We’re very conscious of adult learner concepts. The style we used years ago—where it’s instructor-led—passed long ago. Now it’s very much student-led or participant-led and uses a highly experiential approach. It’s engaging, whether it’s considered fun or just stimulating. I think most companies realize that it’s one thing to propose a concept, but it’s all about the way that folks engage in the exploration of that concept and develop the associated skills with that. The confidence that they need in order to apply and display those skills is very important.”
These new methodologies will represent a departure from previous models of training delivery. “Up to this point, the only difference between the 56-year-old partner and the 26-year-old staff person was the number of years they’d been in the business,” Smith said. “In the last 50 years, they’d generally had the same experience in terms of training—how it was delivered, when it was delivered and what their expectations were.” He added that some boomers might feel a little dislocation as a result. “Where a boomer might see a video game as a diversion, it’s something quite different to a generation X or generation Y person. Where a boomer might see someone with iPod earphones in as just kicking back and not working, the generation Y person would say, ‘This is the way I work.’”
A Graceful Exit for Boomers
Baby boomers don’t have to feel excluded as a result of this new array of learning offerings. “Games and simulations are commonplace, and it doesn’t matter what the ages of the individuals are, as long as they’re able to bridge some of the technological applications that are often necessary,” Vest said. “Something that may be intuitive for someone younger may be a conscious developmental interest for someone older. But they find that once they get over that gap of familiarity, they can have just as much fun. If they leave the workforce with the mindset of, ‘Learning is fun, and this is something that I want to continue to do,’ then they’re not likely to leave the companies altogether. They might just be engaged differently. They’re going to want to spend more time exploring other interests, but they may still be available for service in some other fashion.”
One way in which boomers can be of service is by teaching younger employees about their company, job role, skill set or any other body of knowledge. This can be performed through coaching and mentoring programs, as well as technical delivery methods such as blogs and user groups. For instance, Rosen also serves as the president of SHARE, the oldest user group in the world, which collaborates with IBM to educate people who are new to technology. “SHARE mentors people in IT whether it’s mainframes or other areas of computing,” he said. “One of the interesting things I’ve noticed is that there are people who have retired and are still coming back to SHARE because they get enjoyment out of passing their knowledge to the next generation.” This shouldn’t come as too much of a surprise, though. Passing knowledge down to younger generations is a natural human impulse, and civilization wouldn’t have gotten very far without it.
–Brian Summerfield, email@example.comFiled under: Leadership Development, Technology