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  • Writer's pictureSam WW

Learn to Swim or get Swept Away in the Tsunami

Updated: Apr 19, 2023

This is part of a series of blog posts about demographic trends relating to business, labor markets, and human performance.

There is a change happening in the world that few people recognize and almost nobody is prepared for. It is a force of nature that nobody can stop, but the clever can plan around. The force of nature that's coming is the retirement tsunami that started in 2022, and the demographic changes that will dominate the rest of our working lives.

In the last few years the baby boomers started retiring and this year the average boomer has reached retirement age. By the end of the decade all the baby boomers will be over 65. The boomers are significant because they represent the largest and most skilled demographic group in American history, and they dominate the workforce. They represent most of the executives, senior leadership, and the most skilled workers worldwide.

Healthy demographics look like the dark blue on this chart (figure 1). A normal age distribution makes a nice cone shape with tons of young people at the bottom and very few older people at the top. However, the current structure of demographics is the light green (the part with the two bulges), which is top heavy with tons of older people dominating the workforce and relatively few, and at some age groups significantly fewer, young people coming up to take their place.


(Figure 1: https://ourworldindata.org/age-structure)
(A healthy and normal distribution looks like the dark blue, but we have the much more top-heavy light green)

In a world characterized by a healthy (cone shaped) demographic environment, organizations have relatively few older people who are significantly more skilled than the more numerous people entering the workforce. When the old-timers retire, they leave at a trickle, affording lots of opportunity for younger people to be mentored by the remaining (more experienced) staff. There should be a steady flow of people entering an organization, moving their way up, getting coached by those with all the experience, and very few at the oldest end of the spectrum retiring out.

The world we live in doesn’t look anything like that. The current demographic environment has been dominated by the boomers who have accumulated all of the experience, skill, and wages, and have left their children with relatively few opportunities to receive mentorship and practice their skills. Millennials graduated university and entered the workforce at the start of the Great Recession, and then got the worst of the mass-layoffs during covid. They’re the unluckiest, least experienced, and (relative to their productivity) the most underpaid, generation in America, all because of global trends and circumstance out of their control. Starting this year and for the foreseeable future, baby boomers will age out of the workforce at record numbers and take all their skills with them; and there simply aren’t enough skilled workers to replace them.


So the question for business leaders today is: what's your plan? From where are you going to replace your more numerous and more skilled workers? Is your recruitment and placement process prepared to compete for younger workers in enough numbers to replace your senior leadership and most skilled employees? Is your onboarding process focused and tight so you can find underexperienced but promising leaders and get them skilled-up as fast and as effectively as possible?


If not, it may be time to start thinking about these problems. If you’re not preparing now, then you may find yourself standing alone on a beach trying to hold back a tsunami.


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