The shape of the workforce is changing quickly. Once the largest part of the labor market, the Baby Boom generation is steadily moving into retirement. How will this impact your team-building process and how can you deal with the evolving situation?
It’s an important question. The process feeds into a larger challenge that will impact all businesses in the years to come. Long-term demographic trends, the aftermath of the pandemic, and skills gaps in several key areas have led to a deepening shortage of workers. This long-term dynamic will likely change the way you think about staffing your firm.
The issue is known as the “sansdemic,” a term that derives from the idea that there won’t be enough workers for open positions. In part as a result of the Baby Boomer retirements, a generational shortfall of millions of workers will increasingly impact your business.
A key driver of the overall sansdemic, the retirement of the Baby Boomer generation creates other problems, specific to that dynamic.
Here are some facts you need to know about the growing number of retiring Baby Boomers:
Why Baby Boomers are Leaving the Workforce
The Baby Boom generation — generally considered those born between 1946 and 1964 — make up a huge chunk of the labor force, about 25% of total workers. At this point, this figure is less than either Generation X or Millenials, which each contribute about a third of all employees. Still, Baby Boomers represent a core chunk of most professions.
Meanwhile, this population is aging. Even those at the tail end of the generation (those born in the early 1960s) are now in their late 50s and early 60s — quickly approaching retirement age.
The pandemic accelerated this process. Yes, Baby Boomers would have left the workforce eventually. But many moved up their retirement plans amid the COVID shutdowns. This put strain on the labor market, making it difficult for businesses to find and keep their best talent. At the same time, this contributed to follow-on workforce disruptions, like the Great Resignation.
How the wave of Baby Boomer retirements affects the overall workforce?
With Baby Boomers moving out of the workforce, companies will feel a host of pressures. Here are some of the issues you’ll need to deal with as the sansdemic becomes more acute:
Labor Shortages
As we’ll see, the challenges related to the sansdemic take many forms. However, these start with a simple, fundamental issue: a lack of warm bodies. You might have problems finding the number of workers you need.
To combat these labor shortages, look for ways to make your operations more efficient. Productivity upgrades can limit the number of employees you need. At the same time, lean on technology. Automation and other tech upgrades can make up for a more limited staff.
Higher Costs
With Baby Boomer retirements draining some of the depth out of the labor market, you’ll need to do more to compete with other companies searching for talent. This will add complications to your recruiting and training processes. Meanwhile, it will also make your operations more expensive.
Competing for a smaller supply of workers will push wages higher. You’ll also need to spend more on benefits. As a result, you’ll need to become more deliberate with your team-building decisions, getting the most out of the talent available.
Knowledge Gap
It takes time to develop certain skills. Years. Decades. As older workers leave the workforce, younger candidates might not have the seasoning required to master certain key aspects of the job.
This creates a steeper learning curve for the next generation of skilled staff and leadership candidates. You’ll need to identify emerging knowledge gaps before they impact your business. From there, create methods for educating your remaining staff.
Loss of Direct Experience
In 2022, inflation reached its highest level in four decades. That means that any workers under 40 have literally no memory of a similar time. Meanwhile, team members under 60 have limited-to-no professional experience dealing with such a sudden rise in prices.
This is just one example of the value experience brings. Baby Boomers can look back over a long career, drawing on an extended history with market conditions that their younger colleagues have no direct understanding of. As they move out of the workforce, you lose this well of knowledge.
Contact PrideStaff Bend Today
As you look to overcome Baby Boomer retirements and other issues related to the sansdemic, turn to a strong recruiting partner, like PrideStaff. You’ll get the insight and support you need to thrive in an economic situation.
Contact PrideStaff Bend today to upgrade your team-building process.
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