Bye Bye Boomers: Who Will Fill your Workforce Gap?
By: Dona DeZube
With 75 million Baby Boomers marching inexorably toward retirement, it’s clear that employers will need more than one workforce plan for replacing exiting workers.
Filling the workforce gap will be a challenge. The ranks of the Gen X workers are simply not enough, while many Millennials lack the needed work experience. Foreign-born workers often face immigration challenges, while flexible or remote workers aren’t appropriate for every role.
But taken together, those sources can supply a portion of the additional workers your organization will need to fill the skills gap created by departing Boomers, enabling you to improve your employee retention rates.
The Workforce Gap and Departing Baby Boomers
A quick glance at population data shows why Boomer retirements will create recruitment headaches in the years ahead, unless the age mix in your organization heavily tilts toward young workers.
According to Gallup, about a third of today’s workforce comes from the 75 million-strong Baby Boom generation. The oldest Boomers turn 70 next year and the youngest are in their early 50s. More than 44 million of them are still working. Geography and industry greatly influence the likelihood that an employer will face a workforce skills gap sooner and more severely.
Can’t Gen X Pick Up the Slack?
Generation X spans those born between 1965 to 1980 and includes 65 million people. According to Pew Research, Gen X contributes nearly 53 million workers to the U.S. economy. That leaves a gap of 10 million workers to fill the Baby Boomer gap.
Unfortunately, not all Gen Xers will continue to work full time. Many in the “latchkey generation” are at a life stage with children and some must care for aging parents, too. For these workers, workplace flexibility and work/life balance are critical components of the decision to stay in, or step away from, the workforce.
This trend has been reflected in recent headlines, with companies granting unlimited parental leave, unlimited vacation and sabbaticals. Those benefits appeal to Gen Xers in families with two working parents, who have to make difficult decisions about when they work, how much they work and where they work, says Courtney Templin, president, JB Training Solutions, Chicago and author of Manager 3.0: A Millennial's Guide to Rewriting the Rules of Management.
While your company may not be able to match those unlimited offers, you may have a better chance of recruiting Gen X workers by adding telecommuting, part-time hours, compressed workweeks, short sabbaticals, job sharing, shift trading, project-based contracts or temporary jobs to your workforce benefits.
Millennials Are Moving Up
Gen Xers aren’t the only big players in the workforce. The Millennial Generation, born 1981 to 1997, offers an additional 75 million people and contributes another nearly 53 million workers. With the oldest Millennials turning 34 in 2015, you’ll need to account for the growing skills gap if you assume these workers will fill the roles of departing Baby Boomers.
Millennials are also less likely to have college degrees, in part because the youngest members turned 18 in 2015, the age at which most American kids start college. Still, in 2014, only 21 percent of Millennial males and 27 percent of Millennial females had completed a bachelor’s degree, according to Pew Research Center data.
If that trend continues, it could reduce the pool of highly education talent in the years ahead, making it even tougher for you to find the entry-level employees your organization needs.
A focus on employee training (particularly soft skills training) and early management programs may help to groom Millennials employees.
Templin points out that Millennials are drawn to transparent, collaborative organizations. The generation that grew up with technology likes access to information. Open organizations with open-book financial management and open-door hierarchies will be at an advantage when recruiting Millennials.
Are Immigrants in Your Workforce Plan?
Immigrants can help close the employee gap, although it’s hard to predict to what degree, given the changing nature of Federal immigration policy. In 2014, the U.S. workforce included 25.7 million foreign-born workers, the Bureau of Labor Statistics reports.
Companies that rely on foreign-born workers in these industries will most feel the recruiting pinch if immigration slows:
- Service occupations (24.1 percent)
- Production, transportation and material moving occupations (15.6 percent)
- Natural resources, construction and maintenance occupations (13.7 percent
Foreign-born workers have also played a critical role in filling the skills gap already found in many STEM fields in which unemployment is currently near zero, according to Help Wanted:The Role of Foreign Workers in the Innovation Economy.
Can Remote Workers Fill the Skills Gap?
You may be able to fill the skills gap by recruiting remote workers. Not only will you gain access to job applicants in other parts of the country (or the world), you’ll also appeal to workers who simply prefer to work from home.
Adding the ability to work remotely can help you attract new employees and improve retention employee rates. But it will likely require a shift in company culture as well as careful planning for logistical, management and hiring challenges.
Only 42% of managers believe flexibility is an essential element to organizational success, according to a recent World at Work survey. And while 80% of the companies surveyed offer workplace flexibility, only 37% have a formal, written philosophy or policy on flexible work options.
Baby Boomers Who Don’t Retire
Another way to cover the skills gap is to retain your Baby Boomer employees on the job indefinitely. Be warned, however: Baby Boomer employees may say they plan to work into their 70s (or possibly forever), but by age 68, only 16 percent of people actually work full time (17 percent work part time), according to Gallup.
Your best strategy may be to create a Boomer knowledge transfer and replacement program that focuses your senior employees on transferring their knowledge to others over a pre-retirement period of 12 to 18 months.