Interest in the labor market behavior of the Baby Boom generation continues unabated. To some, it seems to be a crisis; but like any crisis, it is also an opportunity to seize — or to squander.

The perceived lack of skilled employees is a growing problem throughout the industrialized world. Today, even China and India, with their millions upon millions of university graduates, have difficulty producing — or at least retaining — enough of the well-trained professionals and managers urgently needed to run critical functions.

For years, industry experts — mostly businesses themselves — have been warning American businesses that the coming retirement of one particular generation would wreak havoc, shrinking the pool of qualified workers and creating a sudden loss — overnight, apparently — of a large group of experienced employees.

Five decades ago, the U.S. welcomed more than 75 million babies. Now these Baby Boomers — those born between roughly 1946 and 1965 — are nearing retirement age, and the nation’s employers are supposedly facing a loss of up to half their upper-level workforce. By the age of 62, about half of science and engineering professionals are retired, according to the National Science Foundation. Last year, the eldest of this group turned 60 years old.

The biggest boom in births now is leading to a supposed retirement crunch for many companies, and now companies are downright starting to freak out. But is it for good reason?

The demographic shift is not going to happen overnight, and not every Baby Boomer is going to retire at age 65 and head to Miami. They might be nearing traditional retirement age, but older workers are choosing to stay in the workforce longer, alleviating fears of a major labor shortage, according to a study released by Statistics Canada recently.

The number of older people in the workforce has doubled in the past 20 years, the study found. About 2.1 million people between 55 and 64 years of age were either employed or looking for work in 2006, making up 12 percent of the total labor force. In 1976, only 10 percent of the workforce was composed of people in the same age bracket.

Of course, there are resources. Currently, there may not be a shortage of workers, just a shortage of workers willing to work for lower wages and benefits than employers are willing to pay.

Still, eventually everyone stops working, and a plan for minimizing the impact when relatively large numbers of employees do start retiring is important for the health of the business.

Nine years ago, a team of McKinsey & Company authors asserted that U.S. companies would struggle with a severe and worsening shortage of executive talent for decades to come. What’s more, according to the report, entitled The War for Talent (summary), most of the firms managed their talent so badly that they didn’t so much as know who the top performers were.

More recently, in the 2006 Job Retention Poll issued by the Society for Human Resource Management and The Wall Street Journal‘s CareerJournal.com in December, nearly three-quarters of the HR execs surveyed said they were concerned about retaining employees, and half said their firms have created special retention programs to address this problem.

Yet an April 2007 study by Manpower Inc. found that efforts to accommodate senior staff members are insufficient across the board. Based on a wide range of international case studies, the survey specifically focused on the recruiting and retention of older workers and found that only 21 percent of 28,000 employers have retention strategies for such workers in place.

Add to this the numerous claims, particularly in the tech industries, that companies are actually going out of their way to push older employees out, and it becomes even clearer that employers’ efforts are lacking.

McKinsey focused on executive talent, but top talent — no matter the level within the corporate hierarchy — is worth fighting for. Of course, the problem isn’t simply that the Baby Boomers are leaving and taking their decades’ of experience with them. It’s also that their younger “replacements” are fewer in number and less motivated by company loyalty, ManageSmarter.com’s Leo Jakobson recently noted in his column The Boomers are Going! The Boomers are Going!

There’s plenty of blame to go around for this. Why should a younger generation pursue a manufacturing or engineering career in a field in which their father has done nothing but complain about unfair treatment, how all the work is going to China and India, etc., etc.?

Aside from drastic measures for pulling in more young people as engineers and trade workers, “the obvious solution, which more and more company leaders are grasping, is to hold onto their Boomers for as long as possible,” Jakobson wrote.

Keeping Baby Boomers engaged in a rapidly evolving working world, though, is no easy feat. And companies may continue to lose these experienced employers if shortsighted company policies aren’t revised.

There are plenty of specific strategies for organizations willing to retain these hard, dedicated workers — but above all, they must show value if they are to retain this experienced, knowledgeable generational group of hard workers.

Foremost, companies must let older employees know that the knowledge they have garnered throughout their decades working is necessary to the company. In many cases, the experienced and savvy older workers are retiring because of poor corporate management, which simply looks at numbers.

(Of course, this is not exclusive to only one generation: Adecco‘s latest Workplace Insights Survey found that 21 percent of the oldest generation of workers, age 65+, claim their company is not the least bit loyal to them versus 13 percent of those aged 30-42.)

Communicate the sense that their experience has value.

David DeLong, author of Lost Knowledge: Confronting the Threat of an Aging Workforce, writes at ManageSmarter.com:

Have the conversation directly … Talk to these employees, and ask them what their plans are. Do they want to keep working for you? Are they thinking about retirement? What do they want to do in the time remaining, and how can the company help them do that? By confronting the question head-on … you establish their value. You also gather the information you need to appeal to that employee to stick around.

“By encouraging managers to talk to employees, especially those who are approaching their retirement years, you can ensure that you have information about what Boomers want to do with their remaining work years, and what kinds of incentives would tip the stay-or-leave decision in your company’s favor, Roger Stotz, VP and managing consultant at Maritz, tells ManageSmarter.com.

This, of course, should go for any employer with any employee, as much research has confirmed that communication and knowing the needs of workers is key to engagement and, thus, productivity.

Yet a report prepared for AARP by Towers Perrin, The Business Case for Workers Age 50+, found that older workers are more motivated to exceed expectations on the job than their younger counterparts. They also bring experience, dedication, focus, stability and enhanced knowledge to their work.

Businesses must offer the right mix of rewards in order to attract, retain and engage older workers, according to the AARP study. These include health-care benefits, innovative growth opportunities and flexible work schedules.

Eventually — though not all at once — Boomers will be retiring.

But for now, the appeal of early retirement for many is fading, and more and more folks are willing — even eager — to work beyond some mythic date.

Some of these experienced workers may just be getting warmed up.

Do you have an opinion on the purported future talent shortage? Express it in the comments section below.

Resources

Boomer Bust
by Holly Dolezalek
ManageSmarter.com, Aug. 08, 2007

The Boomers are Going! The Boomers are Going!
by Leo Jakobson
ManageSmarter.com, Aug. 08, 2007

Employers Brace for Baby Boomers to Leave Jobs
by Cari Merrill
The Coloradoan, Aug. 26, 2007

Perspectives on Labour and Income – August 2007
by Katherine Marshall and Vincent Ferrao
Statistics Canada, Aug. 28, 2007 (last modified)

The War for Talent
by Elizabeth G. Chambers, Mark Foulon, Helen Handfield-Jones, Steven M. Hankin and Edward G. Michaels III
The McKinsey Quarterly, Q3 1998

2006 U.S. Job Retention
Society for Human Resource Management and CareerJournal.com, December 2006

Recruiting and Retention of Older Workers Survey
Manpower, Inc., April 23, 2007

Workplace Insights Survey
Adecco, Aug. 27, 2007

The Business Case for Workers Age 50+: Planning for Tomorrow’s Talent Needs in Today’s Competitive Environment
Towers Perrin, December 2005

Older workers grow up
by Marshall Loeb
MarketWatch, Aug. 2, 2007