Baby boomers will change the look of Colorado Springs’ workforce during the next five years, and that will present a host of challenges for human resource professionals.
Either the workforce will look grayer as boomers opt to stay in their jobs — even after they turn 65 — an age that has been widely accepted as the normal retirement age.
Or, the workforce will look strangely empty if boomers — 82,546 of them in El Paso County by 2015 — say they’ve had enough of the 9 to 5 grind and take off for post-retirement adventures.
Either way, HR directors are beginning to think about how companies — big and small — will structure their workforce for the changes on the horizon.
“Boomers are the hardest working, best educated, most productive class of workers in the economy and when they go they will take with them tribal knowledge and expertise that can’t be replaced,” said Mark Lautman, author of “When the Boomers Bail” and founder of the Lautman Economic Architecture and the Community Economics Lab in Albuquerque.
Companies will have to think about how to fill jobs with an upcoming generation that is smaller in size and less educated. They may need to restructure their work schedule policies to allow boomers to work reduced hours, in an effort to keep their expertise as managers, mentors or project leaders.
“HR will struggle with how (boomers) will fit into the workforce without demoting them, but without upsetting other potential leaders who want to move up,” said Joan Rennekamp, human resources consultant with the law firm Rothgerber Johnson & Lyons in Colorado Springs.
The problem for companies is that it’s tricky to predict just how the boomers will want to spend their golden years. Some surveys suggest that boomers aren’t ready to retire. Other reports say boomers are leaving the workplace in droves.
AARP Public Policy Institute reports that nearly 18 percent of employees 65 and older were working in 2011, compared to 10 percent in 1985. About 20 percent of employees surveyed by Gallup this month said they planned to keep working past age 65 because they wanted to, not because they had to.
In Colorado, employees over age 65 are projected to double from 3.4 percent in 2010 to 6.7 percent by 2020.
Younger workers often see older workers as denying them jobs and clogging their career path, said Tucker Hart Adams, senior partner, Summit Economics and author of the report “Aging in El Paso County.” Ageism in the workplace is about to rear its ugly head, she said.
“Ageism is going to be the defining social issue of the 21st Century,” she said. “Surveys show baby boomers plan to continue working after 65, either because they want to or because they have to. There will be resentment on the part of the younger people who can’t be promoted or get the top jobs.”
The slow economy may be why some boomers are sticking around a few more years in the workforce, said Bob Cope, economist in the office of Colorado Springs Economic Vitality. He’s heard the argument that young professionals could end up resenting their older co-workers.
“I reject that premise completely — the whole idea of economic vitality is to grow jobs,” he said. “There are not a finite number of jobs.”
Lautman sees the other side of the equation. He said communities are facing catastrophe when the boomers bail from the workforce.
“If your community isn’t producing enough qualified new workers — and most aren’t even close — and you are not in one of those cool, hip places that attract talented workers, then you will be out of headroom to grow the economy,” he said.
Companies need to find a way to tap the fast-growing reservoir of retirees, Lautman said.
A survey released this month by MetLife shows that 59 percent of boomers over age 65 are partially retired; 41 percent are completely retired. And, of those still working, 37 percent said they will retire in the next year.
But, the workforce will not be better off without its boomers, said David Lord, Innovations in Aging Collaborative executive director.
Boomers are better educated than generations before them and generations that follow them. In 1965, 24 percent of the senior population had graduated from high school. Today, 34 percent of those people over age 65 have a bachelor’s degree or higher. Meanwhile, 28 percent of the younger generation have a bachelor’s degree or higher.
Boomers, those born between 1946 and 1964, started turning 65 in 2011. On average, they will live another 18 years.
“All of a sudden you have people who are living longer,” Lord said. “But, we are not to the point where we want to sit on the porch.”
German car company BMW saw its aging workforce and panicked. They didn’t want to lose the expertise, but also worried that there were not enough younger employees coming into the workforce. In 2007, the company redesigned one of its manufacturing plants to accommodate its older workers, including physical changes to make work easier on the body and adding part-time work policies to keep older employees longer. Production went up across the board in all age groups.
It’s a business approach that Harvard Business Review said should be thought of as critical capabilities for all global companies.
It may be in companies’ best interest to entice boomers to stay on in reduced work schedules because there just are not enough younger employees to take their place, Rennekamp said. In 2010, in El Paso County there were 6.2 people ages 20 to 64 for every one person over age 65. By 2040, there will be 3.1 people for every one person over age 65.
Already, Rennekamp is hearing from El Paso County firms that boomers are asking to stay on past retirement age, but they want flexible, reduced hours so they can still get on a plane to see the grandkids.
“Companies have to think about how to structure their workforces,” she said. “The organizational structure may become a dilemma.”
There will have to be change in the employment model, said Dave Csintyan, interim CEO of the Greater Colorado Springs Chamber and EDC. There has to be a methodical way of sharing the wisdom, a generational baton pass of sorts.
“Companies are coming to grips with wanting to save their expertise,” he said.
One idea picking up steam among the leaders in the Innovations of Aging Collaborative is a “time bank” — a website that would act as a clearing house to match employees with companies on a project or contracted basis.
“We have done a total reset,” said Csintyan, a boomer who turned 65 last year. “I’m the new 46 — I know very few of my peers who have purposefully taken themselves out of play. If we play our cards right, if we grow jobs, it will dilute (ageism) as an issue.”
The average age of retirement for men is 64
The average age of retirement for women is 62
The number of Americans living beyond age 90 has tripled in the past three decades
37 percent of boomers say they will retire in the next year
Colorado workers over 65 was 3.4 percent in 2010 and projected to be 6.7 percent by 2020
Sources: U.S. Census, Center for Retirement Research, Retirement Project of the Urban Institute, MetLife “Transitioning into Retirement” study.