{"id":17074,"date":"2023-10-11T16:59:01","date_gmt":"2023-10-11T16:59:01","guid":{"rendered":"https:\/\/mysourcefunding.com\/leadership\/the-silver-tsunami-is-on-the-way-how-companies-can-prepare\/"},"modified":"2023-10-11T16:59:02","modified_gmt":"2023-10-11T16:59:02","slug":"the-silver-tsunami-is-on-the-way-how-companies-can-prepare","status":"publish","type":"post","link":"https:\/\/mysourcefunding.com\/?p=17074","title":{"rendered":"The Silver Tsunami Is On The Way: How Companies Can Prepare"},"content":{"rendered":"
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Employers experienced high turnover rates in 2021 during the \u201cturnover tsunami\u201d or great resignation, and now there\u2019s talk of another wave about to hit, the silver tsunami. We saw many members of the baby boomer generation decide to head towards retirement during the post-pandemic era, and that number is trending upwards, posing a handful of challenges.<\/p>\n

This was bound to happen as generations naturally age out of the workforce, however, company leaders can take notice now and adopt proactive strategies to mitigate the impact of an aging workforce.<\/p>\n

Could This Be the End of the Baby Boomer Workforce?<\/strong><\/p>\n

Legal Jobs suggests that roughly 10,000 baby boomers, the generation born between 1946 and 1964, retire every single day. In fact, the number of workers in this generation who returned to the workforce after the economy reopened post-pandemic was nearly 2% (1.7) less than the pre-pandemic level.<\/p>\n

One key factor behind this accelerated retirement was that many older workers were scared of contracting COVID-19 at work. As a result, they cashed in on their 401(k) plans, took a buyout package, or were part of a reduction in force and decided not to re-enter the workforce. Another group decided simply not to return since they had reached their planned retirement age.<\/p>\n

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Currently, in today\u2019s economy, there\u2019s a possibility that inflation and economic disruption might force some boomers to come out of retirement, however, it wouldn\u2019t make much difference as a much larger number transition into retirement.<\/p>\n

This demographic shift, which experts coin the \u201csilver tsunami,\u201d has been long anticipated, but its effect is now being keenly felt. The labor surplus felt by the boom of this generation is leaving the workforce could mean that labor shortages may be felt for longer than anticipated, compounding the labor shortages faced in the aftermath of the pandemic.<\/p>\n

The Impact of the Silver Tsunami on the Industry<\/strong><\/p>\n

Besides potential labor shortages, the new wave of boomer retirements can leave significant knowledge gaps in multiple industries, from healthcare to leisure and hospitality. This older generation, for better or worse, has been the backbone of the US labor force, having been in active service for at least 39 years, with many only quitting their jobs three times on average. Unsurprisingly, this older generation boasts a vast experience that future generations might miss out on unless enough groundwork is laid to maximize it.<\/p>\n

Back in March of this year, 2023, 2.2 million older workers retired earlier than expected, taking with them a multitude of valuable institutional knowledge and leadership. That number will practically double over the next few months when 46 million US adults approach their upcoming retirement years, reaching ages 65 and above.<\/p>\n

This is significant because 4 million boomers are leaving the workforce every year. With boomers making up nearly a third of the entire workforce and 56% of retiring boomers being in leadership positions, this means a lot of knowledge, as well as a third of the workforce, is walking out the door.<\/p>\n

A recent survey shows that only 57% of the aging workforce has transferred less than half of their knowledge to the incoming one, with 21% yet to do so. It\u2019s an outlook that doesn\u2019t bode well for the future. Large-scale businesses lose $3000 per employee every year due to loss of knowledge. This can also lead to employers losing their ability to train and retain the younger generations. Younger workers are typically known for high turnover rates, as the average tenure of a Millennial is 3.2 years\u2014a long shot from the average tenure rates that the boomers set. Needless to say, employers don\u2019t have the time to waste recouping lost knowledge if they don\u2019t start taking action now.<\/p>\n

How Companies Can Mitigate Crisis When The Silver Tsunami Hits <\/strong><\/p>\n

As the silver tsunami edges closer, companies must take concrete steps to prepare for the challenges it poses. Reducing the impact of this demographic shift demands a proactive approach that not only addresses the unprecedented loss of experienced professionals but also prepares the organization for a more age-diverse workforce.<\/p>\n