A major challenge for organisations in Australia right now is to work out how to engage and retain their baby boomer workforce. Many organisations are focusing too much on how to attract and retain the X and Y generations, and not focusing enough on how they can retain their senior talent.
In 1969 when I was born, there were 7.5 people working to one person over 65. In 2014 there are five people working to one person over 65 and, based on the current statistics, by 2050 there will only be 2.7 people working to one person over 65. Our workforce ratio is set to halve in the next three decades.
Our baby boomer generation brings essential qualities to the workplace; experience, reliability and a strong work ethic. But due to current demographic trends Boomer retirements are estimated to continue at approximately 10,000 per day until 2030. This presents a significant organisational drain on intellectual property, experience and knowledge, along with labour shortages.
Former Labor Minister for Ageing Mark Butler has previously noted the massive social and financial challenges looming as the Boomer bulge hits pension age, including ‘sandwich women’. “For the first time in history, we are going to have two generations in retirement at the same time. As Boomers are retiring, a significant number of their parents are still alive. We have never had this dynamic before,” he said.
“We are finding people, particularly women, end up with `sandwich’ care responsibility – they are sandwiched between caring for their children and for their ageing parents. This generation is pressed both financially and for time as a result.”
Economically we need Australians to work longer, but we have many more people leaving the workforce, than commencing work. This is going to impact on economic activity and the ability of the government to fund pensions which have increased from $16 billion in 2001 to $48 billion in 2016. With our baby boomers beginning to retire and our workforce ratio reducing, this is going to be a significant financial challenge in coming decades.
In Australia we have added over 25 years of life expectancy in the past century, which means people are beginning to realise that 65 or 70 is no longer old. It is not unusual now for people to be active into their 90s. Retirement today can mean the start of a second career, further education and new goals.
The challenge for employers is to strategically focus on developing new workforce arrangements which allow our baby boomer workforce to achieve the balance they need without having to leave their employment and look somewhere else.
Ageing baby boomers will be looking for work they enjoy as well as the flexibility to have time for study, hobbies and extended holidays, or time to undertake their carers’ duties.
For employers it is about respecting our ageing population, respecting what our mature workers can offer their organisation, a willingness to offer training and flexibility, and to build a workplace culture where diversity of age enriches a company’s capability and culture.
For our baby boomer generation it is about planning for Act 4. Gone are the days of retirement at 65, pension and spending your last years at bowls and bingo. It is now necessary to plan for Act 4, the years 65 to 90. Another 20 to 30 years to plan, and fund! It is about asking what do I want to achieve, experience, learn, where do I want to work, how will I maintain my health, where do I want to live, and how will I make the last quarter of my life fullfilling?
Both employers and baby boomers have some planning to do!