OK – the recession is officially over. Glad that’s past us. So why such high unemployment? One reason is that the earnings that have partially restored the stock values have been based on cost cutting, furloughed employees, and aggressive financial restructuring. Maybe the bleeding has stopped, but we don’t have lift-off yet. Based on the stubborn reluctance of the financial industry to reinvest in their customers and businesses to shed the fiscal conservatism that saved their skins, this recovery may be a long slow ride.
The impact on those Boomers facing retirement will be profound. We know that the financial crisis took a bite out of retirement savings. While some losses have been recouped, this was still a generation with the lowest savings rate in history. In short, a great many people were really unprepared for retirement and will have to work longer than planned.
The good news is that the economy will need them. Because the Bureau of Labor Statistics predicts a shortage of prime aged workers (25 to 54 years), companies will have to find ways to retain these workers. For some companies, the impact will be profound. It is estimated that 65% of Boeing’s workers are eligible for retirement in five years!
The options to keep aging Boomers productively engaged will be many. The migration to free-agency, the reduced need to be physically present, the outsourcing of rote labor, and the adoption of technology will create a much more flexible and capable senior workforce.
One of the main strategies for reducing cost has been to offer packages to the higher cost, senior workers. It worked! Unfortunately, many businesses may soon have to turn around and figure out ways to keep the ones they will need to grow the business when the market finally turns.
Scott
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