Baby boomers represented the largest concentrated generation in the workforce for much of the last four decades, but as they age into retirement, we’re seeing a fundamental shift in the demographics of the labor market.
A combination of demographics and economic realities means that, while 10,000 baby boomers reach retirement age every day, only 5,900 are retiring. Crain’s Detroit Business reports that in Michigan alone, 265,000 individuals 65 years and older were in the labor force in 2018. That’s a 65% increase from 2010. Across the country as a whole, the US Bureau of Labor Statistics (BLS) estimates that 26% of the total workforce will be 55 years or older, nearly double the number in 2002.
In the short term, this means that the retirement tsunami long expected by labor experts hasn’t yet occurred. Instead, we’ve seen more of a trickle as many over-65 workers remain in the workforce longer. In the long term, however, we’re poised to see a sharp shift as baby boomers leave the workforce and Millennials and Generation Z take up those roles. Fortunately, though, we have more time than expected to prepare for this, and technology can help.
The Benefits of an Aging Workforce
An older workforce offers many benefits, especially in the manufacturing industry, which has struggled for years to fill positions with qualified new workers. The slower the older generation retires, the more time is given to fill those roles.
In addition to the added time to fill-out growing labor demands, businesses see significantly lower turnover rates from workers over 50 years of age, and they are able to build knowledge bases and institutional capital by capturing the knowledge of those older workers. Technology is enabling companies to do this faster and more accurately than ever before.
Adult learning has always been challenging. It’s difficult for adults to experience repeated failure and to not fully understand a topic as part of the reskilling process. Aged workers who can provide insights and years of experience in support of the training process offer a support system and knowledge base that would otherwise not be available. In the past, however, the only way to capture this knowledge was one-to-one. Older workers would train new workers on processes and provide support throughout training, but once onboarding was complete, they’d be left alone, without access to that knowledge.
Frontline connected worker platforms are changing that, providing new ways to capture, standardize, and share knowledge across an organization:
- Standardized Training Materials - A central training repository that provides a single process can be enhanced by older workers providing insights on potential issues. Employee input can be captured directly in the app and updated in realtime to reflect actual conditions. This avoids hidden factory processes that “fix” what are seen as inefficient processes.
- Digital Andon Cord - New and established employees alike have instant access to everyone in an organization through a digital andon cord on their smart device. This keeps them engaged with the individuals who help manage and support their training.
- Progressive Training - Training can be provided as needed with progressive platforms that adjust to employee performance, frequency of questions, and input from supervisors. This can also help to identify when further hands-on support is needed.
The goal of a connected worker platform is to ensure everyone has equal access to all the information needed at any given time. In the past, as older workers retired, gaps were created. Technology is empowering companies to capture institutional knowledge and preserve it for the next generation of workers.
The Risk of a Demographic Shift
We currently sit at the apex of a booming economy. Over 10 years of unprecedented economic growth, we’ve reached record low levels of unemployment, with 150,000-200,000 new jobs created month after month.
This won’t last forever. The workforce is aging, future generations are smaller and frequently lack the advanced skills needed to operate modern technologies and processes. To prepare for an inevitable downturn and the reduced capacity to hire new workers and generate value at the current rates, companies need to leverage the resources they currently have. Aging workers are helping to maintain the high levels of productivity we currently see in the economy, but it won’t last forever.
Smart investments in the right technology right now will help to capture knowledge that can help improve efficiency, get new workers up to speed faster, and maintain higher levels of quality over time.
Learn more about how connected worker tools like Smart Work Station are helping to increase productivity and reduce costs for businesses as they look to capture savings and prepare for the next wave of demographic shift in the US workforce. Download our eBook below: