Entice 'boomer workers' to stay on the job
MONTCLAIR, N.J. — Over the past several weeks the media have been reporting on the rise in jobless claims due to the dislocations caused by hurricanes Katrina and Rita. The resulting upward blip in the unemployment rate has led corporate recruiters as well as some job seekers to speculate that the job market is weakening.
However, the latest figures show that jobless claims are already returning to their pre-hurricane lows. In fact, barring a major economic cataclysm, all indications are that a key demographic trend is creating conditions in which there may be too few, not too many, workers available over the next few decades.
The 78 million baby boomers have made their presence felt at every stage of their lives. They crowded our kindergartens and grade schools in the 1950s and 1960s, overwhelmed college dorms and classrooms throughout the 1960s and 1970s, and then proceeded to supply American businesses with the largest and most educated group of employees in US history.
Now, the boomers might rock our society once again - this time with their absence - as they reach retirement age.
The potential mass exodus of the boomers looms just as US employers are starting to have a harder time finding employees - the jobless rate hit a four-year low of 4.9 percent in August, right before the hurricanes hit. And the American economy is adding more than 2 million new jobs per year. The Bureau of Labor Statistics predicts that there could be as many as 5 million to 6 million more jobs than available workers by 2008, and 7 million to 10 million more jobs by 2010.
If the boomers walk out the door, they will take with them not just their numbers but their unparalleled skills, years of experience and training, plus a work ethic so strong that we had to invent terms like "workaholic" and "yuppie" to describe it.
Simply put, US businesses that wish to remain competitive must find a way to retain as many of these employees as possible. And they must do so in an era in which most workers over 65, about 85 percent at last count, are choosing not to work, even part time.
Why are so many people choosing to retire? The most obvious response is because they can. Social Security benefits, company pensions often accompanied by lifetime health benefits and supplemented by Medicare, as well as the 401(k)s that now total a staggering 1.8 trillion dollars waiting to be claimed and spent are all making it easier for people to retire.
Add to this mix the lure of a very attractive postwork lifestyle. This 21st century "golden age of retirement" offers seniors fun-filled round-the-world cruises and "active adult communities" featuring year-round golf, tennis, and other sports.
Plus, boomers are more likely to see retirement as a normal lifestyle choice as they see their friends, siblings, spouses, and co-workers deciding to pursue the postwork good life.
Another factor pushing employees to retire is dissatisfaction with their jobs and their companies in today's lean and mean corporate climate. According to Gallup surveys, worker morale has never been so low.
Many companies might imagine that they can replace the departing boomers with foreign workers. But don't count on it. In India, supposedly awash with IT and science professionals to replace defecting boomers, only 6 percent of those between the ages of 18 and 24 even enroll in college.
To persuade as many boomers as possible to remain in the workforce, American companies can start by emulating Japanese companies, which are facing worker shortages caused by Japan's rapidly aging population and plummeting birth rates. Those companies encourage older workers to stay by offering them bonuses and flexible time schedules.
Chances are American employers will have to be more creative and proactive to stem boomer defections. Companies should send clear signals to their older workers that they are part of the organizations' future plans. For beginners, strike the terms "retirement" and "early retirement" from the corporate vocabulary. And include older workers in their training programs - surprisingly, recent surveys show that workers 55 and over are receiving only one-third the training hours that those 45 to 54 are receiving.
Employers should offer employees, especially those nearing retirement, the option of taking a "job hiatus" of a few months to a year. Many companies experimented with such sabbaticals during the booming late 1990s, and even today Doubleday, Nike Inc., and Intel offer such an option. A hiatus would be attractive to employees who just need a taste of extended time off - they can pursue personal development activities, enjoy some leisure, or further their education.
The oldest boomers will be eligible to collect Social Security benefits in little more than two years. Companies would be wise to develop strategies to keep their boomer employees now before these workers start walking out the door.
• Michael G. Zey, author of the forthcoming "Ageless Society," is a professor at Montclair State University's school of business.