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Will Boomers Really Have to Retire, or Be Able to in this Economy?
Marty Johnson asked some very good questions in his comments to me on my last Blog. I thought it would be worth expounding on the issues he raised in that I was headed in this direction anyway. I recommend that you take a quick look at Marty’s questions but to sum up:
1. Is everyone of retirement age actually going to retire? Are we seeing droves of people leaving the work force? (Answer: NO)
2. If there is a shortage or one coming why aren’t salaries “spiking” up? (His example was “You want to keep me increase my salary 15%") (Answer: THIS IS INEVITABLE)
3. Are retirement plans and other investments (401k ect…) going to be enough to allow people to retire or will they be forced to work because of the economic environment? (Answer: ABSOLUTELY NOT)
These are all good questions. Many Boomers feel the same way that Marty does about income and this addresses what I want to label “Top Grading” which is based on the theory that 80% of any given employee roster just shows up for work. They just have a “job” and that is all they do. The remaining 20% are driven to be the best and accomplish more because of it. It is a career to them; they are competitive and desire to make a difference.
Much of my time is invested in just getting to know people. My long term goal is to know everyone in my industry. I never know when I will have a client that needs someone with a specific skill or background so understanding who people are, where they are and where they want to go is important to me as a recruiter.
Smart employers need to invest time and resources now and in the future BEFORE there is a critical need for talent.
This is called Talent Mapping and I will be Blogging on this later.
They also need to consider ways of assuring that their employees are reasonably content and develop methods to retain them for the long haul. As well as have a solid succession plan in place.
Replacing a top ranked/ upper 20% employee in the coming market will cost an employer a lot more than the 15% increase Marty mentioned.
Briefly on 401ks: these were never meant to be a retirement plan. A 401k was meant to be a supplemental income stream, offered as a golden handcuff for employees. The matching was vested over time and people would stay for the money but it was not to be considered as a sole source of income for retirement.
Pensions and other investments were encouraged but even this is proving to be far short of what is needed to survive retirement without working.
Example: Benefits like what GM offered their employees (Life time Health Insurance for one) have proven to be hollow promises (yesterday's news: "Effective Jan. 1, GM will end health benefits for 97,400 salaried retirees 65 or older, their spouses and dependents. Retirees will receive an extra $300 a month in their pension checks that could be used to buy health care.")
The smartest people are the ones who invested in a 401k knowing it was supplemental but never counted on this for retirement, and these people are most likely to be members of the top 20% of employer rosters. They will cash out and retire/ maybe consult/ when they get bored, but they will not need to work financially.
Most of the folks who didn’t think this through and didn’t take the time, energy and resources to plan for their retirement; who trust the social security funds to be there are the folks who will have to keep working. Unfortunately most of these people will have been and continue to perform in the bottom 80 percentile of the roster. Do not get me wrong, we need everyone of those employees to function. What I ask everyone to consider is that as an employer I would prefer to have more of my competitor’s top people making up the majority of my work force. It will most certainly give me an advantage in the marketplace. I also would like to inspire the complacent/ “I have a job” worker to consider that if they were to apply a strong work ethic and engage their ‘job’ as a career / take it seriously, they might have a profound impact on their company/ peers and their income. We should all strive to do our very best.
The storm I describe in my last Blog is the literal “war for talent” that HR circles are discussing all over the internet and in the media. It is not that there will be a lack of bodies to do specific work, it is that there will be a raging war for top talent and the best will be in a position to earn more and will be sought after by companies and recruiting firms internationally.
In my humble opinion: now is the time for people on the backside of the Boomer retirement timeline to position themselves with a good recruiter who understands them and their desires; who can keep an eye on the market for golden opportunity/ and represent them to companies who are investing in, attracting and retaining the top talent in the industry.
In my humble opinion: now is the time for C level management to invest their resources and time to partner with employment consultants to map the talent in the industry, develop a talent acquisition strategy and implement it. They need to develop strategies and programs that effectively keep employees long term. There needs to be an aggressive university recruitment push, to draw the brightest to the industry and it most likely should begin before college, even as early as high school, with scholarships and internships.
To sum up:
People will be forced to stay in their jobs longer and so the older employee will still remain a percentage of the workforce because of the economy and the lack of quality retirement planning, but the real war for talent will be fought over the top 20%ers out there. So NOW is the time to prepare for what the numbers tell me is inevitable.
More later... work hard and prosper!
1. Is everyone of retirement age actually going to retire? Are we seeing droves of people leaving the work force? (Answer: NO)
2. If there is a shortage or one coming why aren’t salaries “spiking” up? (His example was “You want to keep me increase my salary 15%") (Answer: THIS IS INEVITABLE)
3. Are retirement plans and other investments (401k ect…) going to be enough to allow people to retire or will they be forced to work because of the economic environment? (Answer: ABSOLUTELY NOT)
These are all good questions. Many Boomers feel the same way that Marty does about income and this addresses what I want to label “Top Grading” which is based on the theory that 80% of any given employee roster just shows up for work. They just have a “job” and that is all they do. The remaining 20% are driven to be the best and accomplish more because of it. It is a career to them; they are competitive and desire to make a difference.
Much of my time is invested in just getting to know people. My long term goal is to know everyone in my industry. I never know when I will have a client that needs someone with a specific skill or background so understanding who people are, where they are and where they want to go is important to me as a recruiter.
Smart employers need to invest time and resources now and in the future BEFORE there is a critical need for talent.
This is called Talent Mapping and I will be Blogging on this later.
They also need to consider ways of assuring that their employees are reasonably content and develop methods to retain them for the long haul. As well as have a solid succession plan in place.
Replacing a top ranked/ upper 20% employee in the coming market will cost an employer a lot more than the 15% increase Marty mentioned.
Briefly on 401ks: these were never meant to be a retirement plan. A 401k was meant to be a supplemental income stream, offered as a golden handcuff for employees. The matching was vested over time and people would stay for the money but it was not to be considered as a sole source of income for retirement.
Pensions and other investments were encouraged but even this is proving to be far short of what is needed to survive retirement without working.
Example: Benefits like what GM offered their employees (Life time Health Insurance for one) have proven to be hollow promises (yesterday's news: "Effective Jan. 1, GM will end health benefits for 97,400 salaried retirees 65 or older, their spouses and dependents. Retirees will receive an extra $300 a month in their pension checks that could be used to buy health care.")
The smartest people are the ones who invested in a 401k knowing it was supplemental but never counted on this for retirement, and these people are most likely to be members of the top 20% of employer rosters. They will cash out and retire/ maybe consult/ when they get bored, but they will not need to work financially.
Most of the folks who didn’t think this through and didn’t take the time, energy and resources to plan for their retirement; who trust the social security funds to be there are the folks who will have to keep working. Unfortunately most of these people will have been and continue to perform in the bottom 80 percentile of the roster. Do not get me wrong, we need everyone of those employees to function. What I ask everyone to consider is that as an employer I would prefer to have more of my competitor’s top people making up the majority of my work force. It will most certainly give me an advantage in the marketplace. I also would like to inspire the complacent/ “I have a job” worker to consider that if they were to apply a strong work ethic and engage their ‘job’ as a career / take it seriously, they might have a profound impact on their company/ peers and their income. We should all strive to do our very best.
The storm I describe in my last Blog is the literal “war for talent” that HR circles are discussing all over the internet and in the media. It is not that there will be a lack of bodies to do specific work, it is that there will be a raging war for top talent and the best will be in a position to earn more and will be sought after by companies and recruiting firms internationally.
In my humble opinion: now is the time for people on the backside of the Boomer retirement timeline to position themselves with a good recruiter who understands them and their desires; who can keep an eye on the market for golden opportunity/ and represent them to companies who are investing in, attracting and retaining the top talent in the industry.
In my humble opinion: now is the time for C level management to invest their resources and time to partner with employment consultants to map the talent in the industry, develop a talent acquisition strategy and implement it. They need to develop strategies and programs that effectively keep employees long term. There needs to be an aggressive university recruitment push, to draw the brightest to the industry and it most likely should begin before college, even as early as high school, with scholarships and internships.
To sum up:
People will be forced to stay in their jobs longer and so the older employee will still remain a percentage of the workforce because of the economy and the lack of quality retirement planning, but the real war for talent will be fought over the top 20%ers out there. So NOW is the time to prepare for what the numbers tell me is inevitable.
More later... work hard and prosper!
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