A Perfect Drought
Who should take an interest in the question: How should organizations redefine retirement? And, why?
The principal stakeholders in the vital redefinition issue fall into one or more of four groups: stewards, prospective retirees, affiliates, and retirees. Stewards include anyone who has as a part of his or her job an accountability (specific or general) for the continuity and survivability of an organization. Put all together, the people who do these kinds of jobs every day constitute an organization's continuity infrastructure.
Anyone who spends chunks of time pondering the question, “Should I stay, or should I go?” falls into the prospective retirees group. You know who you are: you can quote crime statistics like an FBI agent, rates of return like an investment banker, and travel options like a cruise director. If retirement planning were Three-Card Monty, you’d be a millionaire.
Affiliates are non-employees who have, or had, an ongoing relationship with a business, nonprofit, or government organization. The non-employees may either be former employees or professionals, technicians, and paraprofessionals who work independently but whose livelihood is closely tied to organizations.
And, yes, retirees have a stake in the question, because within a year or so of retiring, a large percentage of retirees are working again, either full time or part time. How come? And, what are they doing? The short answers: they need to, and mostly the same old thing. They need the money, or the human connections, or to be doing “something” to keep from being bored.
Here’s why these stakeholders should care about how organizations choose, or choose not, to redefine retirement in the 21st Century. Unstoppably, three waves of change are converging on today’s organizations, and when these waves of change come together they will create the conditions for “A Perfect Drought” – a drought in organizational competency. The ‘War for Talent’ is coming back, a relapse that will threaten the health of organizations across the board.
We forecast that these three waves of change are moving our way: a demographic Santa Ana wind; a distracted workforce heatwave; and a productivity downdraft. Over the last few years 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 downdraftlooming on the horizon.
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. 10,000 people a day are retiring, and the number is going to keep going up until 2025.
The older a worker gets, the more he or she is at risk of being distracted on the job. The social thermals at work in the distracted workforce heatwave are more difficult to pinpoint because many of them are emotional in nature. The distractions faced by workers in their 50s can be deeply personal.
The productivity downdraft will hit when the current “productivity bubble” bursts. By downsizing and concentrating key organizational and technical know-how into fewer and fewer hands, 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. We’re looking right at the productivity bubble, right now, and we are refusing to believe what we are seeing.
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:
- A demographic Santa Ana wind;
- A distracted workforce heatwave; and,
- 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.
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.
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 areintensely 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.
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?
Copyright 2004 James H. Krefft, Ph.D. and The Center for Third Age Leadership, LLC