A Wells Fargo study found the average American had saved about seven percent of the money needed to retire. The same study showed 30 percent of people in their 60s have less than $25,000 in savings with an average 401K balance of $71,500.Never mind that these people are ill prepared to retire. What does it mean to companies when the pipeline clogs at the top and everybody runs in place?
Sixty may be the new 40 if your plastic surgeon is gifted. It’s true that the average client for in vitro fertilization is 45. But what nobody seems to have addressed so far it the effect of these realities on the workplace. For example, A Boomer (born 1946-1959) who works to age 70 slows the upward progression of twenty- and thirtysomethings but what if he or she works to age 80? If you started with the company at 25 on the theory you’d be senior management by 45 you are in for a shock. The 65-year-olds who needed to leave to make room for you are going strong — and nowhere!
Most observers of popular culture would weigh in at this point with the fact that old age isn’t associated with wisdom and accomplishment but with Altzheimers, physical pains, and being surrounded by people more boring than you are. A generation ago living to 80 was an achievement. Today, it’s a risk.
That means all those HR types and manpower planners need to alter their assumptions about how the next generation of workers — a smaller cohort already — will get into the parking lot, much less find jobs. It’s dreadful but true that companies expect their older higher-paid workers to retire or die. Has anyone considered what happens when they won’t? To fire all the marginally competent Boomers right now would cripple many businesses. How about in ten years?
I think you’ll see a new kind of severance as companies pay people to leave. “We’ll give you two years’ severance if you retire at the end of the month.” What happens when the Boomers say, “No,” because they have finally run the numbers and know they can’t quit working? I have had several clients in the past year seek transfers to their companies’ southern subsidiaries because of the difference in cost of living. However, how many people can do that?
The number of people needed to kiss babies at Wal-Mart is limited and the people doing it aren’t Boomers and aren’t dying. Besides, Boomers would worry about germs. Twenty- and thirtysomethings are notoriously disdainful of the Fortune 500. Are there reasons other than stock options to work for start-ups such as not having to bother with Boomers and fortysomethings in the mix?
Even if Boomers linger well past normal retirement age companies face a massive selling job to younger workers. How can you put a 25-year-old on ice for 20 years? The implications for the economy are tremendous. Can you call iit a pipeline if nobody “flows” through? Will Boomers allow age discrimination as long as they are the largest voting block?
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