This presentation reviews the evolution of the labor force with the retirement of the Baby Boomers.

1. The Flight of the Baby Boomers
Retirement Costs and Labor Shortages
Presented By
Jack Szczepaniuk
July 29, 2008

2. Summary
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What is a Baby Boomer?
It’s a matter of Generation
The Baby Boomer Exodus
The Gap
Labor Shortages
Bridging the Gap
Retirement Costs for the employer
Baby Boomer Plans
Retirement Costs
Conclusion

3. What is a Baby Boomer?
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Someone who was born between 1946 and 1964
Sudden rise in birthrate following World War II
Shared Events
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Vietnam War
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Civil Rights Movement
Idealistic personality
Not a homogeneous group (Gerosimplification)
Two distinct Baby Boomer Groups
77 Million born during the generation

4. It’s a matter of Generation
The Silent Generation (GI) [1925-1945]
Slow progress, step-by-step, low risk, trust government, work hard
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“children are to be seen and not heard”
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The Great Depression
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Social Security and the GI Bill were enacted
Generation X [1965-1981]
Reactive, values tangible rewards, skill
development, crave feedback
• Cold War era
• Fall of the Soviet Union
• Ronald Reagan era
Generation Y (Millennials) [1982-present]
Civic, technologically saavy, inexperienced in
dealing with difficult social issues
• the internet
•9/11 and the War on Terror

5. Year-to-Year Births in the U.S. [1946-1994]
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Baby Boomers
Generation X
Generation Y

6. The Baby Boomer Exodus
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A person may begin collecting Social Security at age 62
First Baby Boomers are turning 62 this year (2008);
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7,918 people turn 62 each day, or 330 every hour <
http://www.census.gov/ipc/www/usinterimproj/>

7. Situation
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About 40% of U.S. workers will be over 55
y/o by 2010
About 75% of Baby Boomers plan to work
beyond retirement age
Many are choosing to gradually leave the
workforce, rather than in one step
A third of workers will be forced to retire early
due to lay-offs, downsizing or illness
60% of new jobs in this century will require
skills that are today possessed by only 20%
of workers

8. Workforce Make-up

9. The Gap
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Significant generational differences between Baby
Boomers and X/Y workforce
Technological differences
Cultural and Political differences

10. Generational Gap (Online Use)

11. Labor Shortages
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Five Industries face acute shortages of skilled
workers
 aerospace and defense
 health care
 insurance and financial services
 public education
There will be “wars” for attracting labor within the
next 5 to 6 years
Labor shortages may occur in specific
geographic areas
Age discrimination may prevent older people
from re-entering the labor market

12. Labor Shortages (cont)
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The future workforce will need to:
 Make up for the knowledge and skills that
were lost through the retirement of the Baby
Boomers
 Be able to succeed in a more globalized
environment, full of technology
Little is taught about Foreign economies to
children and teens
Math and Science levels of American students
are a step behind

13. Future Labor Shortage
The shortage of skilled and unskilled labor will be
setting in within the next couple years

14. Labor Growth Rate
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The labor force grew 1.6% per year from
1950 to 2000
Growth in the labor force has slowed to 1.1%
this decade
Overall growth in the labor force from 20002050 is expected to be 0.6%

15. Bridging the Gap
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Companies (HR departments) must
plan for an approach on two fronts
 Relations between soon-to-be
retirees and new Gen X/Y
employees
 Rising immigrant workforce
Companies must support older
worker employment
Companies must recruit highly
skilled immigrant workers in order
to be competitive
Must uphold diversity programs in
order to retain highly skilled
immigrant workers

16. The Elderly Proportion
Growth in the proportion is due to:
 Retirement of the Baby Boomers
 An increase in health and life expectancy
 Changing fertility patterns

17. Possible Plans for Baby Boomers
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Extension of employment beyond retirement
age
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Gradual Retirement
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Voluntarily
Official change in retirement age
Phased Retirement – Reduced commitment to
work before full retirement
Cyclical Life Plan – periods of work/leisure over
long period
Functional and Schedule Flexibility

18. Retirement Costs for the Employer
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Legacy Costs – costs handed down from
predecessor or past
Legacy Costs may include retirement packages,
which threaten older, established companies
Newer, smaller companies won’t feel as much of
the brunt
Costs incurred to replace a retired worker’s
knowledge and skills

19. Strain on Public Employers
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The longer Baby Boomers live, the costlier
retirement benefits become
Taxpayers will not be able to cover the increasing
cost of retiree benefits
State governments signed a 30-year bill in promise
of spending $2.73 Trillion on retiree benefits
Governmental plans are lightly regulated
As of 2006, $370 Billion has been left unfunded

20. Retirement Cost Woes
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Social Security is the largest source of income for about 50% of
retirees
Today, there are 3.3 workers paying into the system for every 1
receiving benefits
Within the next few years, the ratio will be 2:1
By 2017, taxes will not be enough to pay for Social Security
Benefits for all retirees

21. The Future of Medicare
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Baby Boomer account for the surge in enrollment beyond 2010

22. Conclusion
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Over 77 Million people were born in the Baby Boom
generation
The first Baby Boomers are retiring this year
Exit of the Baby Boomers leaves a void in
experience and knowledge
Companies must “bridge the gap” between Gen X/Y
and Baby Boomers, and recruit highly-skilled
immigrant workers
Some alternative options for Boomers
Costs for companies and the government will be
unavoidable

23. The Flight of the Baby Boomers
Presentation by Jack Szczepaniuk
Information, data and graphs are referred from the following sources:
Baker, James P., Lui, Elwood, Poirier-Whitley, Kirstin, Griffin, Sarah Heck (Summer 2008) Everything
You Always Wanted to Know About a Public Employer’s Ability to Modify Retiree Benefits but Were
Too Afraid to Ask. Benefits Law Journal, 21(2), 83-98
Giancola, Frank (Summer 2008) Should Generation Profiles Influence Rewards Strategy? Employee
Relations Law Journal, 34(1), 56-66
Hines, Andy (July-August 2008) Consumer Trends in the Three Different “Worlds”. The Futurist, 18-23
Lee, Shelley A. (May 2008) Sandra Timmermann on Boomers Ready to Launch—and What That Means
for the Rest of Us. Journal of Financial Planning, 16-20
Nguyen, Bao Q. (Summer 2008) Tomorrow’s Workforce: The Needs for Immigrant Workers and
Strategies to Retain Them. Public Personnel Management, 37(2), 175-184
Rappaport, Anna (Third Quarter 2008) The Future of Retirement: An Exploration and Comparison of
Different Scenarios. Benefits Quarterly, 40-61
Walker, Lewis J. (June 2008) Capturing the Boomer-Care Flag: The Misalignment of Compensation
and Consumer Need. Journal of Financial Planning, 28-31.
Year-to-year births (1946-1994) and Future Labor Shortage from the Bureau of Labor Statistics
Pre-retirement and Retirement Population (2002-2020), and General Labor force Composition from the
U.S. Census Bureau