According to the US Census Bureau, a Baby Boomer is a person who was born during the demographic post-World War II baby boom between the years 1946 and 1964. The issue has been around for many years, but the impact of the Baby Boomer Generation on the workforce is being felt now more than ever. In today’s volatile marketplace, their impact on the current and future workforce has shifted from causing significant skills gaps and knowledge transfer issues, to remaining in the workforce past retirement age due to financial hardships. The previous view of the Baby Boomers was one of subdued panic, with firms thinking that their knowledge through years of experience was walking out the door, leaving a huge skill and experience gap in their wakes. As this is an inevitable eventuality, the concern today is the lack of viable opportunities for the younger IT professional due to older workers remaining in the workforce longer.
Short Term Impact
Taking a look at today’s market snapshot reveals that Baby Boomers need to stay employed longer, past their planned retirement age, for financial reasons. The economic downturn that started in 2008 that included the subprime mortgage crisis and Congress’ global central bank bailout bill, resulted in the Dow falling more than 777.68 points, the most in any single day in history. This resulted in a national panic, followed by rampant unemployment and an unprecedented rate of home foreclosures. Many individuals were forced to dip into savings, including 401k and pension plans, to make ends meet. The impact on the workforce has been tremendous and multi-faceted, and has forced Boomers to remain longer in the workforce. An analysis of recent U.S. Census data revealed that during the past decade the percentage of Americans age 55 and older who are in the labor force increased from 32.4 percent to 40.2 percent.
The impact on the Baby Boomer generation has been significant and has created ripple effects throughout most organizations at all levels. Those who were planning on retiring are finding that they are forced to remain in the workplace for much longer than anticipated – sometimes, years longer. With so many Boomers putting off retirement, there are fewer vacancies for IT positions, therefore fewer opportunities for mid-level management and entry-level personnel. This is impactful in a number of ways, including knowledge management and knowledge transfer. Eventually these individuals will retire, and when they do, it will create a significant knowledge gap that needs to be mitigated.
Long Term Impact
Forward about ten to fifteen years from now, and the workplace dynamic will be greatly changed. With the Baby Boomer generation exiting the workforce, even from much-delayed retirement, there will be significant opportunity for mid and senior level professionals. Given the sheer volume of retirees, there will be fewer specialized workers available to assume their duties. Even if the economic conditions change little over the next few years, the IT field will continue to realize a need for experienced, specialized candidates. According to the Bureau of Labor Statistics, during the next decade, one of highest in-demand fields will be computer services.
When the IT industry does experience this influx of open jobs with too few qualified workers to fill them, the IT professional is positioned to demand increased rates. If this were to become a trend, the expectation is that it will ultimately attract more talent to the IT industry because of the financial reward associated with hard-to-find skills. Additionally, according to a recent About.com article, because companies need workers, and because it can take a long time for new workers to get the skills needed, tech companies will put pressure on the US government to increase the number of new visas approved in a given year; most notably, the H-1B visa, since this is the one most impacted by the IT industry.
The impact that the Baby Boomer generation has, and will continue to have for years to come, both immediate and long term impact on the workplace. This phenomenon will ultimately lead to an increase in jobs, specifically for the IT professional, in the longer term, but delayed retirement may shrink opportunity in the near term. Preparing for this changing dynamic is essential for any corporation to ensure successful knowledge transfer, and succession planning.