In 2011, the so-called baby boomer generation of Americans born after World War II will hit 65 and start looking at its options for retirement. While more than 78 million baby boomers are contemplating how to spend their golden years, businesses are bracing themselves for labor shortages and the biggest brain drain in U.S. history. From VOA's New York Bureau, correspondent Barbara Schoetzau has the details in a story written by VOA intern Dominique Soguel.
According to a recent study by the Conference Board, a global research and business group, organizations are not prepared for the retirement of the baby boomers. Diane Piktialis is a baby boomer working with the Mature Workforce Program at the Conference Board.
"The baby boomer population is going to be retiring in record numbers and the number of workers coming up through the labor force behind them is not enough to fill all the positions that are going to be left vacant," she said. "Companies not only don't have enough bodies to replace retiring workers, but most organizations have not formalized any programs to transfer knowledge from those mature workers to others coming up through the organization."
A baby boomer is someone born in the United States between 1946 and 1964. After World War II, the United States experienced an unusual increase in birth rates, now commonly described as the baby boom.
Piktialis says that, instead of worrying about the retirement of the baby boomers, companies should start finding ways of keeping them on board.
"The biggest challenge is going to be how to adjust your organization's policies in a way that older workers who are able and want to continue to work will in fact stay with your organization," she added.
The good news is that while baby boomers may be old enough to retire and cash-in on their benefits, most of them don't want to give up active lives. Many are willing to go on working as long as it's on a part-time or flexible schedule.
"All of the studies show that somewhere between 70 and 80 percent of these baby boomers, when asked, said that they would like to continue working in some capacity," she explained. "Part of the reason is the fact that they are better educated and healthier than in the past. People want to stay engaged. They want to contribute. They want to keep their minds intellectually challenged."
To tap into the potential of the baby boomer generation, according to Piktialis, companies and non-profit groups need to rethink their approach to recruitment and start including older people in their search for talent.
"Companies are very focused on how to recruit younger workers: Which universities do you go to? How do you reach out on the Internet? But very few organizations have any experience or networks to recruit mature workers," she said.
Stephen Kotlikoff, a Boston University economics professor, says that the major impact of the baby boomers' retirement will be financial. He says once they retire and no longer are earning a salary and paying taxes, policy makers will have to find ways to finance government programs in a fiscally responsible way.
"The real issue with the baby boomers retirement is that there are going to be a lot of old people to support relative to the number of workers that are making Social Security contributions. We are currently handing out $30,000 per old person in Social Security, Medicare, Medicaid benefits. And when the baby boomers retire, that number in today's dollar will be about $50,000. You are talking about close to $3 trillion, $4 trillion a year in outlays."
The government and the private sector have been busy for years trying to find solutions to the problems the retirement of baby boomers will cause. They have less than five years to find them.