Dr. Rick Franza, Professor of Management at the Hull College of Business, discusses a different, timely business topic each Monday in this column. This week, he talks about what the retirement of Baby Boomers might mean for businesses. The interview has been edited for clarity and impact.
ABD: Have you noticed that the Baby Boomers are getting older?
Rick: Yeah, every morning. I’m at the backend of that generation.
ABD: The Baby Boom generation is generally listed as those born from 1946-64. About 10,000 of them retire every day, and by 2030, all of them will be at least 65. What will that mean to companies, some of which are already struggling to fill all their open positions?
Rick: While there was a big exit of Baby Boomers during covid, it’s reversing itself somewhat. We’ve all heard the stories that if you don’t have a purpose in life, you die earlier. So part of the solution is attracting the Boomers back, those who are concerned about the economy and their retirement funds.
Another solution is job sharing – one full-time position shared between two part-time employees. You can keep people in the workforce longer if you lighten the load. It’s a really good solution for both employers and employees. Most of us are ready to retire, but not quit doing things. I’m picking up my golf game again, but I don’t want to play every day, maybe two or three times a week. People want to have value.
You could also have work teams of varying ages where the younger workers can capitalize on the experience of the older workers. Young people will be moving up super quickly now that the opportunity may be there.
Another solution that’s controversial is AI (Artificial Intelligence). With birth rates going down, AI could have a role, either in replacing a job or doing it more efficiently.
The market will drive some of this but as a businessperson, you want to be ahead of the market. Invest in your people and retain them.
ABD: One area that might suffer the most with the retirement of Baby Boomers is the trades, since those jobs often require a level of hands-on expertise. One estimate I saw is that there will be 2 million job openings in skilled trades like construction, electricians, HVAC, plumbers, welders, and various types of engineers. How can that be addressed?
Rick: We’ve done a disservice to the trades by encouraging everyone to go to college, even if your skillset is more geared toward the trades. Apprenticeships have been more prevalent in the trades, but I think we’ll be seeing even more of that. We’re already seeing some places, like Virginia, moving from college degrees to skillsets for state workers. I think we’ll see more of that as the population of available workers shrinks.
As we talk about Baby Boomers going away, the ramp-up time for younger workers needs to be quicker. We require internships for all our business students, so they understand the workforce and what they need to do to be prepared. We’re seeing more companies preparing employees for the work. Post-secondary schools can do more to talk to employers about what they need. Tech schools, like Augusta Tech and Aiken Tech, are doing a good job with that.
ABD: You mentioned that AI could play a role in filling the openings left by retiring Boomers. But could it do that in the trades?
Rick: Certainly, it’s not a cure-all; it wouldn’t be as a replacement, but a supplement. But repetitive tasks can easily be done by a tech.
Where it becomes more difficult is in knowledge. The repository of knowledge and leadership will be difficult to replace. It’s not just the basic knowledge, but the nuance of using that knowledge.
ABD: Speaking of that nuance of knowledge, can companies utilize retired Baby Boomers as mentors?
Rick: Some people are just naturally mentors and I think people who view their job as a profession will do that. Part of having a purpose is that people are proud of what they’ve done and want to pass on what they learned.
But all the mentoring and training won’t be enough. You need a portfolio of solutions that includes job sharing, AI, machine learning, mentoring, and multigenerational teams. There is no silver bullet.
ABD: According to what we know about the Boomers retiring, companies have at best a little more than six years to prepare. Is that enough time?
Rick: Some companies have already started working on this, but others have not. They’ve got to get going as soon as they can. You can’t depend on the government to do it.
The good news is that this is all predictable. Look at what we did during covid – it created circumstances that led to unique solutions or acceleration of technology. But in this, we have time to prepare. Necessity creates innovation. We may have fewer workers, but let’s figure out how we can do it.
