The oft-cited statistic is stark: 10,000 baby boomers are retiring per day.
It seems inevitable that the boomer generation aging into retirement – an age that has been rising since the 1990s – would have profound effects on the labor force. At face value, it sounds like a problem that could lead to a labor shortage. Instead, though, some see the mass exodus of boomer workers as an opportunity for companies to shift gears, operate leaner, and boost their competitiveness.
"Many of our larger clients have shared … that up to 35 percent of their current workforce is eligible for retirement," said Kenneth L. Johnson, founder and diversity recruiter at East Coast Executives. "This leaves an incredible opportunity for these companies to course-correct and take a strategic look at the future of their business and talent acquisition models."
A declining labor supply and demand
Millennials represent the largest living generation today, according to Pew Research. That means the workers exist to replace the boomers, as evidenced by the ongoing growth of the labor force, even in the wake of large scale retirements. However, it's important to note that the labor force participation rate is declining – it stands at less than 63 percent today, compared with 66 percent 10 years ago. So, while the bodies are there, fewer people are looking for work.
There's also the question of whether employers even need a labor force the size of yesteryear's. With many companies focused on working leaner and more efficient, the number of new full-time hires is lower in many industries. At the same time, companies are relying more and more on contractors and gig economy workers. As a result, the labor force will remain competitive for employees, said Nate Masterson, director of HR for Maple Holistics.
"Fewer workers are now required to fill the dwindling positions that are being vacated by baby boomer retirees," Masterson said. "Companies are becoming less worker-reliant, a reality that will cut costs in the long run but see prospective employees faced with fewer options in terms of available positions."
That means despite the wave of Boomer retirees, younger workers will still face a tough job market in which the leverage is the employers. As a result, the impetus will be on the job seeker to make the case as to why they're a strong candidate, rather than for the employer to court the job seeker with attractive benefits and perks.
"The reality is such that with fewer job openings, the power is being shifted rather dramatically towards the companies and employers, not the employees," Masterson said. "Workers need to become better at selling themselves, rounding out their resumes and targeting positions of need."
The role of automation
As more menial work is automated – especially with the growing sophistication of robotics, data technologies, and artificial intelligence – demand for jobs requiring significant technical expertise will increase. Both employers and employees should recognize the significance of this, Johnson said, and take advantage of it to remain competitive.
"Automation has changed the way we work and the sheer number of new hires won't rival the age when Boomers began their careers, but there will be opportunities for those seeking employment," Johnson said, "and those opportunities should exist at the highest levels."
So, even as Boomers vacate positions with great frequency, there remain more than enough workers coming of age, companies are operating with less overhead, and the employment picture is shifting to incorporate part-time, freelance work in larger quantities.
Taken together, this does paint a new landscape for the future American work force, but fear of finding adequate labor is not part of that picture. Finding adequately educated and skilled labor, on the other hand, will be the question of the day for top employers.