How Will Aging of the U.S. Workforce Affect Your Business?
By Laurie Bradley
Increasing numbers of baby boomers are drawing closer to retirement age, and many industries, especially those that rely on STEM workers, are starting to lose more of their skilled workers as they exit the workforce. These veterans take with them years of experience and knowledge that are not easily replaced.
STEM workers tend to fall between the ages of 25 to 54 years old. There are few STEM workers younger than 25 because most scientific, technology, and engineering positions require a bachelors degree or higher level of education. A 2013 report for the U.S. Census Bureau shows that currently, workers between the ages of 35 and 45 make up the majority of the STEM workforce.
As these workers age, and many begin to consider retirement, a significant number of the current workforce will need to be replaced with new talent. But according to a study by the Society for Human Resource Management (SHRM), only one-third of organizations have strategies in place for responding to this demographic change.
Handling an aging workforce
One way employers are combating this trend is through phased retirement, in which long-time employees who near retirement age withdraw from the company incrementally. This presents a unique opportunity for seniors who no longer want to work 40-hour weeks but are concerned that they will run out of savings during retirement. They can continue to take advantage of employee benefits and additional income while gradually decreasing their hours until they are ready to exit the workforce completely.
This strategy offers several advantages for both existing and incoming employees.
- Long-time, knowledgeable workers are retained for longer periods of time. If they have an option that falls between working full time and quitting cold turkey, older employees may be willing to work more years.
- Younger, incoming employees have the benefit of learning from older mentors before they retire. This gives the company a chance to retain the knowledge and experience of older generations.
- Younger employees may find your company more attractive because they can visualize a career path. Seeing long-time employees who are valued and taken care of by your company may increase the longevity of their employment.
- Your company looks more appealing for the generations that will come after the baby boomers. With rising concerns over social security, the idea of phased-out retirement is very attractive — it is encouraging for employees to know your company will look out for them even in their senior years.
If you are struggling to implement an HR strategy for dealing with changing workforce demographics, or need to find new STEM talent to replace those who are retiring, work with a qualified human capital management provider like ASG Renaissance. We can help you to define phased retirement programs, mentoring programs, and onboarding programs that will help you handle a changing workforce.
Have comments, ideas, or questions? Share them with ASG Renaissance! Contact Laurie Bradley by email or at 800-238-0890.