The Multi-Generational Workforce: How to Best Position Your Business as Baby Boomers Continue to Retire
The youngest Baby Boomers are approaching retirement or retiring early, and it’s significantly impacting the workforce. Baby Boomers make up about a quarter of the working population — many of them in senior- or executive-level roles. To best position your business for the multi-generational workforce of tomorrow, it’s important to understand how the impending “Silver Tsunami” will affect your company and take steps to ensure your approach to hiring and talent management are future-proof.
How will Boomers retiring impact our workforce?
The mass retirement of Baby Boomers is one of the biggest contributors to the current workforce shortage — even more than quitting Millennials.
Companies are struggling to fill the gap as retirees leave big shoes to fill, and the problem will only worsen. The peak of the impact of Baby Boomers’ retirement will be felt in 2030 when the youngest members of the generation reach retirement age.
Many senior and executive-level leadership positions are currently occupied by Baby Boomers. When they retire, they take with them a wealth of knowledge and years of experience.
Who will fill these positions? Can Gen X step up? Yes and no. Gen X is a small generation wedged between the larger Baby Boomers and Millennials. There simply isn’t enough of them to replace retiring Boomers. Plus, their current life stage can make things challenging. Gen Xers are balancing caring for children and aging parents. Many of them – especially women- require flexibility that these high-level jobs don’t offer, or they are choosing to only work part-time to balance the demands of work and home. And Millennials don’t yet have the years of experience needed.
Companies will fill these positions. But those who adapt rather than try to force a Gen X or Millennial peg in a Baby Boomer hole will be better poised for long-term success.
Overview of each generation and motivators
If you’re planning for a multi-generation workforce, it’s important to understand their differences — what motivates them, what they seek in their workplace/career, and how they fit into your organization. When you understand generational differences, you can leverage their strengths and provide more effective communication, management, and leadership.
Here’s a brief overview of each generation currently in the working world.
Born between 1946-1964 (58-77 years old)
Baby Boomers are the oldest members of the workforce and are reaching retirement. This generation is committed to climbing the ladder to success and is largely motivated by status, title, traditional perks (like 401K benefits), and prestige. Setting clear goals and recognizing their accomplishments can go a long way, and they are motivated by promotions and elevated job titles. They tend to be self-sufficient and don’t require handholding, but they can struggle to be flexible and prefer a more rigid, traditional work environment. This generation is more loyal to their employer than the generations that follow them.
Born between 1965-1980 (42-58 years old)
Gen X is known as the “latchkey kids.” Many wore house keys on chains around their necks so that they could let themselves in their house after school until their parents returned from work, making them necessarily independent.
Growing up during a time when the divorce rate was high, there were more women than ever before in the workforce, and hardworking parents were clocking 40+ hours per week, this generation had a childhood with a lot of alone time. They enjoy working independently and figuring things out on their own.
Unlike previous generations, they strive for work-life balance. They’re less motivated by prestige and more interested in perks like flexible schedules and remote working opportunities. Allowing them opportunities to make choices and establish their own way of doing things can help them thrive.
Gen Y (Millennials)
Born between 1981-1994 (29-42 years old)
Millennials are known for being job hoppers. This generation saw or began their career during the Great Recession of 2008, which makes them highly motivated by money. Instead of waiting for opportunities at their current employer, it’s more common to see them move somewhere else. They are less committed to their positions since they saw their parents being laid off during the recession. You’ll rarely see them stay in one place for more than a few years.
Just like Gen X, Millennials seek flexibility. But something else they seek more than prior generations is professional development and growth opportunities. Offering mentorship and training (along with good pay and benefits) can help this generation feel supported and keep them from seeing if the grass is greener on the other side.
Born between 1995-2009 (14-28 years old)
Gen Z is the youngest generation in the working world. Like Millennials, they are motivated by pay and benefits — particularly tuition reimbursement and student loan repayment. But they have their own motivator to add to the list: they seek fulfillment. Gen Z wants to do meaningful work and feel like they are contributing to a bigger purpose. They also want their employer to take a human-centered approach that values their wellbeing.
This means that corporate social responsibility is extremely important to Gen Z. And as the most diverse generation yet, Diversity, Equity, and Inclusion (DEI) efforts are also highly valued. They want to work for companies who take these efforts seriously.
Next: Generation Alpha
The oldest members of Generation Alpha, those born in 2010 and after, are entering their teen years and will soon be looking for their first jobs. We won’t cover this generation since they are not yet in the workforce, but it’s worth mentioning them as it will be important to plan for their entrance into the professional world in the coming years.
Fresh management approaches for multi-generational challenges
It’s not uncommon in today’s business environment to see four generations working side-by-side, and that can be a wonderful thing. There’s value in diversity. Combining tech-savvy and fresh ideas with wisdom and experience can generate outstanding outcomes. However, it also comes with challenges — particularly for managers. How do you effectively manage multiple generations who have different motivators and life experiences?
Flexibility and adaptability are key. Managers need to consider and embrace the differences between generations and be open to managing in different ways. When conflict arises, the best resolution can be found through collaboration. Excellent managers are curious — they ask a lot of questions and receive input from everyone on the team. Those who are willing to try new things can find creative, collaborative solutions that work for everyone.
It’s also important to ensure the office environment and culture is welcoming and accommodating to all ages. This means striving to eliminate age bias, working toward a more inclusive hiring process, and tailoring an office space and policies to reflect the characteristics of different generations in the workplace.
The old way of forcing younger workers to follow “how it’s always been done” doesn’t work anymore — especially in today’s competitive market and ever-evolving technological landscape. As more Baby Boomers retire and age diversity widens, there’s an opportunity for companies to assess how they can adapt and evolve to help ensure that everyone is able to reach their potential.
Succession planning strategy
The mass retirement of Baby Boomers makes succession planning critical. Leaders must have a plan for filling workforce gaps to prevent facing a leadership crisis.
Here are some best practices and strategies we’ve seen clients put in place to prepare for the future.
- Tailor internal training to fill the gaps. When your current leaders retire, what skills/knowledge/strengths will you miss most? Develop and customize professional development and mentorship opportunities to help your current employers grow to fill these gaps.
- Evaluate internal systems. If one person retiring will cause mass chaos, it’s time to make some significant process improvements. Systems should be in place to ensure checks and balances so that everyone is on the same page.
- Make “dual role” hires. We’ve seen success when clients hire a candidate for a position with the intention of training them into a higher role. If you know a senior leader is planning to retire in a year, you can make the most of that time by having them mentor their replacement. This can make for a smooth transition that’s good for everyone involved and is especially beneficial for executive-level roles.
- Identify internal candidates — and the gaps they’ll leave. If you’re considering an internal hire, consider your best candidates. Let them know about the possibility (but that it’s not a guarantee), and how they can best prepare. If a role is filled internally, you’ll also need to consider who will replenish the talent gap they’re leaving by transitioning out of their current role.
- Consider phased retirement plans. The mass retirement of Baby Boomers has companies challenging the norm. We’re seeing more companies offer flexible retirement options that allow senior-level leaders to work part-time until they phase out into full retirement. This allows for a longer transition with a focus on mentorship.
- Maintain a knowledge bank. Retirees walk away with a lot of valuable knowledge. Making it a practice to document institutional knowledge reduces learning curves and helps organizations make more informed decisions.
- Fine-tune your professional development. Proactive succession planning doesn’t only consider the most immediate needs. Continue to evaluate the skills and knowledge desired for the future of the company and update internal professional development opportunities accordingly. Supporting employee career growth at all levels will help everyone reach their potential and future-proof the business.
Need help addressing the retiring Baby Boomer challenge?
Are you prepared for the upcoming wave of retirement among your most seasoned leaders? M&B Search Group can help you navigate today’s workforce challenges and find top talent to fill your specialized needs. We take a personalized, agile approach and are dedicated to meeting the unique needs of our clients.
Ensure the future of your business is in good hands. Let’s connect to explore how M&B Search Group can help you fill your talent pipeline with the right candidates.
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