The prediction of labor deficit is based on the assumption that current retirement trends will be drastic as the large baby boom generation had begun its historic exit from the labor force in 2008. In 2008, the leading edge of the 76 million baby boomers (generation born between 1946 and 1964) turned 62, and in the following decade fully 43 percent of the civilian workforce will be ready for retirement (The Washington Times 2007). Critics claim that the baby boomers will probably not retire at sharply the same age that their previous generation did.
They indicate that most baby boomers will have to put retirement off to a later time to make up for recent stock market losses (Williamson 2002). Unfortunately, general direction toward early retirement seems to be a deeply entrenched model made permanent during the past four decades, and neither bull nor bear markets have made an appreciable effect on it. According to Piktialis and Morgan (2003, p. 30) “the average age of retirement dropped from age 70 in 1950 to age 65 in 1970 to younger than age 63 in 1985”. Since 1985 it has become stable and continues to be at younger than age 63.
Even the Social Security Administration was not able to find data to support the expectation that the retirement age will soon increase. Experts, however, suggest that the average age of retirement will grow when and if the workplace becomes more responsive to older workers' needs and incentives. It is of great importance, therefore, employers move toward making the workplace more appealing for baby boomers. Organizations should recognize that older workers are a valuable resource that posses the skills and experience necessary to fulfill job positions. It is hard to find good replacement for retiring baby boomers. Naturally, it is essential to find ways to keep them.
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Effects of Retiring Baby Boomers on Businesses
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Today’s businesses do need skilled professionals. In a modern world of global interdependencies and technological developments, jobs change and the skills needed to perform them also become different rapidly. That is essentially for technical skills, though. There are other special abilities that businesses need in their employees—management experiences such as decision making, effective communication, customer service, consideration of quality, ability to lead, and so on.
These most essential skills are needed in all of business jobs. Organizations need experienced employees who can apply their skills in a way that helps businesses achieve their objectives. If an organization has a choice between two candidates, one experienced with better technical and management kills and the other with slightly better skills, it will choose the first. Management skills are harder to develop in the replacement workforce.
In the twenty-first century business world companies must look at the foundations of retention through the eyes of baby boomers. They are the customers for their jobs. If companies do not make ready a good foundation, they cannot expect them to stay. Baby boomers will no longer endure what they did not like in their employment position. Keeping employees motivated and happy has always been a difficult task, but it seems much more so this day.
There are motivational problems as organizations become leaner, determined by rivalry. The absence of promotion due to flatter business makes it harder to keep employees motivated and stimulated. When there are fewer promotions on the ladder and less room in the middle, how does the company keep baby boomers motivated, or simply just retain them?
This paper looks at the key issues of managing human resources from the perspective of retention. It starts from the premise that businesses have management or functional responsibilities for baby boomers and businesses need to improve many conditions to retain the ones they want to keep. The paper assumes that businesses want practical information about different methods that affect retention of professional employees.
The paper also assumes that every organization understands that its work environment is different from others. It cannot apply the methods without considering its unique environment. Throughout, the paper looks at environmental factors that affect what businesses do. Perhaps most importantly it looks at what businesses do through the eyes of their employees.
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