Is your company prepared for retirement? No, I don’t mean that your business is retiring, but many of your key employees just might be ready to take that step.
For decades, economists have foreseen the retirement of the baby boom generation as a looming economic threat. Now it’s here, and every month more than a quarter-million Americans turn 65 years of age. Why is that a problem? Well for you, it might mean a large void in the knowledge base of your company. This is also a greater problem for the U.S. because retirees don’t contribute as much to the economy as workers do.
The labor force participation rate for Americans 55 and older who are working or actively looking for work — has fallen over the past year. Roughly 17 percent of baby boomers now report that they are retired, up from 10 percent in 2010. The Census Bureau has released a pair of reports, An Aging Nation: The Older Population in the United States, and The Baby Boom Cohort in the United States: 2012 to 2060, that show just how dramatic an impact the graying of the population will have in coming decades.
More than 75 million people, nearly a quarter of Americans known as “the baby boom generation,” were born between 1946 and 1964. In their heyday, the boomers were an unprecedented economic force, pushing up rates of homeownership, consumer spending and, most important of all, employment. In the late 1990s, the boomers were at the peak of their working lives, and the U.S. labor force participation rate hit a record high.
But in April of 2014, the participation rate hit a 36-year low, and while the article Missing: Up To 4 Million Workers points to multiple reasons for the decline; the aging of the baby boom generation is a dominant factor. In 2003, 82 percent of boomers were part of the labor force; a decade later, that number has declined to 66 percent, and it will only continue to fall.
However, there is a bright side. Baby boomers are retiring just as their children — sometimes known as the “Echo Boomers” — are entering their prime working years. Today, these Echo Boomers (born in the 1980s and 1990s), make up the largest U.S. population sector. And as the teens and 20-somethings enter the workforce, they will partly offset their parents’ exit. For many of these young people, mom and dad can’t retire soon enough. They are looking for employment openings.
These Echo Boomers will be the key to strengthening the economy and the longevity of your business. How you embrace their ideas could be the difference between the failure and success of your business. Training is the key ingredient and should not be overlooked.
At Business Finance Corporation, we believe in fostering young ideas and would like to hear how your business is preparing for its future. Do you think that the Echo Boomer generation is prepared for the business world? Send your comments to David Cabral at Business Finance Corporation.
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