In 2024, an average of 11,000 Americans celebrated their 65th birthday every single day – meaning that approximately 4.1 million Americans reached retirement age during that year alone. Those numbers are expected to hold through 2027, representing the largest surge of retirees in American history.
These retirees are members of the Baby Boomer generation, born between 1946 and 1964. As they exit the labor market, taking their considerable wealth of skills and knowledge with them, they’re precipitating a massive generational shift – a shift that will profoundly impact America’s workforce.
This “Boomer Exodus” is more than a changing of the guard from Boomers to Generations X, Y (Millennials), and Z. Simply put, there aren’t sufficient numbers of the subsequent generations in the labor market to replace the retiring Boomers. While it’s clear that this shift will cause the labor market to tighten, it will also cause knowledge gaps across all sectors.
Knowledge gaps are particularly concerning in the tech and engineering fields since deep technical knowledge and experience take considerable time to develop. Without the thoughtful creation of strategies to attract, retain, and develop talent in this specific labor market model, projects, innovation, and institutional knowledge could be put at serious risk.
To offset the impact of this shift, companies must act quickly and proactively. Suggestions include implementing strategic hiring plans, creating upskilling programs, rolling out apprenticeship programs, working with retirees who transitioned to consultancy roles, shifting to payrolling services, adjusting company culture, and leaning on technology to manage the change.
Develop Strategic Hiring Plans
The last few years have been tumultuous around the globe. The COVID-19 pandemic, worldwide socioeconomic upheaval, and rapid technological advancements have affected how we live and work. And, despite the massive years-long layoff cycle in the tech sector, unemployment remains incredibly low in the tech and engineering fields. Companies have already been struggling to address these issues and fill open roles; the grey tsunami exacerbates these existing issues.
Many strategies already suggested to deal with the shortage of skilled tech and engineering workers could be ramped up to assist with issues caused by Boomers exiting the workforce. For example, your company could consider the following hiring strategies:
- Creating a culture that supports hybrid and remote workers;
- Shifting to global talent acquisition;
- Offering relocation incentives;
- Increasing contract hires;
- Sourcing passive talent; and,
- Focussing on skills-based hiring strategies.
As well, tapping non-traditional talent pools may help locate hidden talent. Workers historically marginalized in the workforce (e.g., BIOPIC workers, women, people with disabilities, veterans, immigrants, and those who have been previously incarcerated) constitute a rich, untapped talent pool.
Invest In Training, Upskilling, And Mentorship Programs
While it’s important to fill open roles, it’s equally important to invest in employee success. Robust onboarding and training programs can assist new hires in orienting themselves, learning the company culture, building confidence, and accessing the tools they need to be successful.
Other programs, such as upskilling and mentorship programs, are valuable for all employees—new hires and long-term, loyal workers alike—and for your company. These programs can improve retention, fill skills gaps, help prepare for pivots, identify future leaders, and ultimately set employees up for success.
Create Apprenticeship Programs
Apprenticeship programs could be a powerful strategy for filling open roles and addressing the skills gap caused by retiring Boomers. Apprenticeships aren’t new in the tech sector, but they’re growing in popularity as their value is recognized.
Like any registered apprenticeship, tech apprenticeships are paid full-time jobs that focus on hands-on learning. Wages are typically modest, and the placements usually last for about one year. If you decide to develop an apprenticeship program, it’s important to follow U.S. Department of Labor guidelines. The guidelines help ensure that the program produces skilled professionals ready to successfully tackle their new roles, whether they are software developers, data scientists, cybersecurity specialists, etc.
In addition to the immediacy of filling open roles, an apprenticeship program can create a skilled, loyal pipeline of talent, which is critical in today’s tight labor market. Additionally, it provides a structured way for knowledge to be transferred from retiring experts to those who have recently entered the field.
Embrace Consultancies
Consultancies may prove to be a boon to both employers and retirees. Retirement can be a big shift, and while many Boomers may want to move away from full-time work and enjoy a slower pace of life, they may be open to part-time or project-based consulting roles.
Working as a consultant allows aging employees to remain intellectually stimulated and continue making valuable contributions while focussing on projects that are of special interest to them. For employers, these types of consultants can easily fill knowledge and experience gaps, provide needed expertise while companies attempt to fill open roles with more traditional hires, and provide leadership and mentoring for younger team members. Employers may find consulting arrangements especially beneficial during major pivots or transitions and while completing complex projects.
Fortunately, the big shifts that have been happening throughout America’s workforce can help both retirees and companies transition to consultancy arrangements. Both parties have likely already experimented with flexible work arrangements and the technology that can help contract workers succeed. Refining your company culture to more fully support hybrid and remote workers can be beneficial when hiring consultants as well.
Contract Payrolling Services
Payrolling services are gaining momentum in the tech and engineering fields and may prove particularly beneficial in retaining retirement-age talent. Under this model, retirees are brought back as part-time or temporary workers. Their payroll is taken off the company’s books and is handled instead by a third-party payroll provider that oversees all aspects of the employees’ pay, including compensation and benefits.
While payrolling can be a helpful strategy any time additional help or expertise is needed, it’s especially effective for facilitating knowledge transfer and assisting with transition during organizational change.
Implement Cultural Change
Integrating or retaining part-time or contract workers of retirement age may require some cultural shifts. Hopefully, your work environment already supports multi-generational teams and values what older workers bring to the table, but those facets of your company culture may need to be refined. Encouraging open communication, offering flexible work arrangements, implementing mentorship programs, and fostering a culture of continuous learning will go a long way to creating a supportive workplace for all and bridging generational divides.
Lean On Technology
Technology can assist with knowledge capture and transfer. Knowledge management systems, documentation protocols, and collaborative platforms can help capture and retain the processes developed by retiring employees. Digitizing their knowledge can help keep it accessible for others long after they’ve left the workforce.
While the “Boomer Exodus” presents a significant challenge, it’s also an opportunity for companies to refine their culture and hiring strategies and, ultimately, build more inclusive and resilient teams. And, with the right approach, the retirees’ knowledge will continue to contribute to the long-term success of their teams and your company for many years to come.
