Baby boomer retirements may leave void
Long-term business practice changes could happen, analysts say.
The growing number of baby boomer retirements nationwide is accelerating, raising concerns locally about losing a large chunk of the workforce sooner than expected.
Data shows nearly 6 million more boomers in the U.S. retired from October 2020 through March of this year than the same period a year prior, creating a larger void than anticipated in an economy seeking to fill jobs across an array of industries and recover from the woes of the coronavirus pandemic.
Dayton-area business analysts and professionals think the increasing departure of a segment that has long been “a very vital part of our workforce” has been sped up by COVID-19. Some say it will spur long-term business practice changes.
“While a lot of attention and resources tend to be focused on attracting and retaining our younger generations, those tend to ignore the important role that our baby boomer generation plays in the success of work,” said Megan Gerhardt, professor at Miami University’s Farmer School of Business.
“This will be very eye-opening to see how fast organizations can transition or adapt to what they need to do to create commitment and engagement and a willingness or interest for our baby boomers to return to the jobs that they had before the pandemic,” she added.
The impact of the rise in baby boomer retirements, Gerhardt said, will be felt for years in different ways.
“I certainly think that the way we look at retaining talent, everyone’s scrambling,” she said. “What we thought we knew before about how we manage people has fundamentality shifted under our feet.
“I absolutely think it’s going to change how we manage the way people forever, across generations,” Gerhardt added. “And I think it’s accelerated our concern about potentially losing our baby boomer generation sooner than we thought we would. At least from the careers they have now.”
About 28.6 million baby boomers — those born between 1946 and 1964 — reported in the third quarter of 2020 that they were out of the labor force due to retirement, according to Richard Fry of the Pew Research Center.
That’s 3.2 million more than the boomers who retired in the same quarter a year prior and much higher than the annual average of about 2 million since 2011, Fry wrote
In the first quarter of this year, 30.3 million boomers reported they were out of the labor force due to retirement, according to Pew’s analysis of government data.
That is 2.7 million more than in the first quarter of 2020. Last year the median age of workers hit a seven-year high, edging up to 42.5 and eclipsing the 42.4 mark of 2013, U.S. Bureau of Labor Statistics data shows.
Will they return?
Baby boomers for decades had been considered the largest segment of the population. That changed in 2019, when the number of millennials was 72.1 million, about 500,000 more than boomers, according to Pew.
While more boomers are technically retiring, many may return to the workforce in a different capacity, said Doug Barry, president Barrystaff, a Dayton and Springfield job placement firm.
“They might find other employment — outside of what they’ve done for their entire career,” he said.
Gerhardt expressed similar thoughts. Boomers are part of “a generation that’s been very driven, on the large part very successful,” that will likely continue to work in a different capacity, she said.
“We’re using the word retirement in a way former generations have used it, which means ‘I’m done,’ ” she said. “And I’m not so sure that’s our baby boomers, particularly with their increased health and well-being. If they’re able to keep working, they’re going to want to do that.”
Among those is Rick Schwartz. The former CEO of Winsupply retired about four years ago but remains active with the business as board chair.
“A lot of people are in my boat and staying active in ( jobs) they’re doing,” said Schwartz, 72, of Kettering.
He wants to keep Winsupply “a growing and important business for the area for years and years to come. And with the younger gen- eration, my goal has been to bring them up through the organization in responsibility as fast as possible and get out of their way so that we have good succession management for the future,” Schwartz said.
“I’m there now as a coach and cheerleader now. … I want to step aside and give historical reference points and answer questions,” he said. “But it’s really important to sustain companies that the younger generation get in the saddles as soon as possible.”
Succession issues
Many baby boomers retiring recently have been small business owners who, when the pandemic hit, didn’t want to wait for an improving economy, Barry said.
“I’ve seen several people in that age bracket — small business (owners) — that they said they have enough to retire and they’ve either sold their business, enacted their succession plan and gotten out of the workforce,” Barry said.
“As well as the stock market has done over the last couple of years, a lot of the folks in that age bracket have been able to get to the point where they can financially retire and they’ve just said ‘to heck with this,’ ” he added.
The upswing in boomer retirements, Gerhardt said, will “cause us to hopefully re-examine what we need to do to keep our talent.”
She added later, “if they decide not to come back at all, I think our organizations are going be in a pretty tough spot figuring out who’s going to take their place.”