Perspectives on Organizations, Third Agers and Retirement

By James H. Krefft, Ph.D  

An ongoing series exploring the kinds of large-scale changes organizations will have to make to survive the never-before-seen, across-the-board discontinuity that will be caused by the crush of Boomer retirements in the next 5-15 years.  Organizations that put in place a comprehensive continuity plan for making these gut-wrenching transformations will survive, even thrive.  The rest will rot or die.

Part 3 – Three Waves of Change

Organizational stakeholders should care about how their enterprises choose, or choose not, to redefine retirement in the 21st Century because three waves of change are – steadily, unstoppably – converging on today’s organizations:

  1. A demographic Santa Ana wind;

  2. A distracted workforce heatwave; and,

  3. A productivity downdraft.

When these waves of change come together, they will create the conditions for a “Perfect Drought” – a drought in organizational competency.  Many prognosticators have been blaring trumpets regarding the demographic Santa Ana wind currently being triggered by the graying of the Baby Boomer generation, but fewer forecasters have paid attention to the now intensifying distracted workforce heatwave or to the productivity downdraft looming on the horizon.

Wave 1

We offer the metaphor of the Santa Ana winds – hot, dry winds that produce brutally low humidity in California, drying out vegetation and making it extremely combustible – to represent the coming impact of the graying of the Baby Boomers.  The eye-popping numbers associated with the Boomers are easy to find and easy to quote.  The trend lines bring gasps from audiences, shake actuaries to their souls, and send gerontologists running for Geritol.

In the U.S. 10,000 people a day are retiring, and the number is going to keep going up until 2025.  Every 11 seconds a Boomer in the U.S. turns 60, and the rate will accelerate for 15 years, peaking in 2020, during which boomers will turn 60 at a rate of one every 6 seconds.  The GAO forecasts that some Federal agencies will be losing up to 45% of their entire workforces in the next 5 years.  By 2050 our planet will be home to 2 billion people over 60.

For a particular organization such generalized figures and forecasts provide at best quaint curiosities for dreary debate around the water cooler.  Rather, each enterprise needs to understand its own, and its industry, demographic profile – more precisely, its combination of profiles and the interconnections among them – above all the demographics of its continuity infrastructure.  Sometimes there is a disparity between what demographic numbers seem to say on the surface and what they are really saying underneath.

Wave 2

The older a worker gets, the more he or she is at risk of being distracted on the job.  We chose the metaphor of a heatwave because many of the distractions to which people over 50 are subjected are intensely emotional, felt by a Third Ager but not seen by co-workers unless the person’s emotions boil to a point that she or he acts out in atypical ways.  When a coworker sees someone acting in “that’s not like him” ways, distraction has produced dysfunction, and the organization suffers the consequences.

Here, we are not talking about the everyday distractions we all face.  The distractions faced by workers in their 50s can be deeply personal, including personal health problems and the side effects from medications; a spouse or partner with an illness; ailing, dying parents; anxiety about what they have, or have not, saved for retirement; and worries about competing, especially keeping up technologically.  

Third Agers can be likewise distracted by positive forces: a yearning to rebuild tattered relationships, a desire to travel, a passion to make a difference in the community, a drive to paint, sculpt, write, sing, dance, act.  The “negative” distractions may capture the headlines, but our sense is that the “positive” distractions are the more spellbinding forces at work in people’s lives.  Most Third Agers will of course be barraged by both positive and negative distractions.

Wave 3

The productivity downdraft will hit when the current "productivity bubble" bursts.  Everyone reading these words has experienced in the last 20 years the blistering backdraft of shrinking headcount.  And organizational leaders have gotten what they wanted: a spike in productivity.  A productivity bubble.  By concentrating key organizational and technical know-how into fewer and fewer hands, however, leaders have now placed their enterprises at risk for a new reason.  When the 50-somethings begin to check out, the bubble is going to burst.

Worse, this threat to organizational survival is likely to get only more hazardous as companies desperate to maintain market share and profit margins continue to try to downsize their way to success.  As an unintended consequence of additional workforce reductions, the concentration of institutional knowledge, technical expertise, and vital relationships into fewer and fewer hands will continue to accelerate.  It’s going to be one heck of a game of headcount chicken.

The increase in unemployment following 9/11 has served only to mask the longer-term imbalances in supply and demand in the job market.  In many organizations bench strength has already grown so thin so fast that leaders will have but one choice when the productivity bubble bursts: launch a bidding war for the people who have the competencies they need.  War for Talent II, this time with feeling.  Third Agers will be waiting.  But which organizations will they choose to work for?

In Part 4 of this series we’ll discuss how Third Agers can become rainmakers during the Perfect Drought.

  Copyright 2004 James H. Krefft, Ph.D. and The Center for Third Age Leadership, LLC

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Jim Krefft is an author, consultant, and President of The Center for Third Age Leadership.