Interesting article and one that I think hits home for many of my clients. As we look at our workforce today (especially those in the executive suite), there is typically an abundance of baby boomers - those that are at or nearing retirement. Your organization may look quite different 5-10-15 years from now. Have you planned and prepared for making those transitions (especially in light of the news below)?
Retiring Boomers Already Hurting Iowa Economy
Written by Donnelle Eller, March 13, 2013 - www.desmoinesregister.com
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Retiring Boomers Already Hurting Iowa Economy
The state has gained young adults but is losing the next age group of more experienced workers.
The loss of retiring baby boomers has already begun to restrict Iowa's economy, a problem that will only grow over the next decade, a new report shows.
We've acted like it's a problem that fie years down the road, but it's happening right now and it will accelerate over the next 10 years," said David Swenson, an economist at Iowa State University, who released a report Wednesday looking at the economic impact of population trends, such as retiring baby boomers and the out-migration of young workers.
"Talk with any Iowa manufacturer, and you know that this is an issue," said Mike Ralston, President of the Iowa Association of Business and Industry, a group that represents about 1,400 companies across the state.
"It's a huge concern," said Ralston, who adds that some companies have slowed expansions because of difficulty finding available workers.
Swenson's study shows that Iowa's workforce shrank nearly 3 percent since the beginning of the recession in 2008. Some of the decline can be explained by discouraged workers leaving the labor market during the recession because there weren't available jobs. But Swenson said it plays a small role.
"Baby boomers are aging out. There are two dimensions: You've got one group at age 65 or so who are leaving the workforce. ...And they're exiting at a higher rate than young people populating the workforce," Swenson said. "And there's another group who, because of prolonged economic stress, are taking early retirement."
The trend only worsens through 2020, he said. Working Iowans - ages 16 to 64 - are expected to contract 3.8 percent from 2010 to 2020, about the same percentage that the U.S. workforce is expected to expand, he said.
Recession Has Similarities to 1980
The labor force constraints already are holding down Iowa's recovery from the recession, which Swenson said now has "more in common with the devastating 1980 Iowa contraction that it does with the recessions that occurred in the intervening years."
In the 1980s, the state suffered from a broad national recession that deepened into the farm crisis as farmland and commodity prices bottomed out. "The period of lost employment resulted in the state's population contracting by 4.3 percent between 1980 and 1990," Swenson wrote in the report.
Swenson believes that Iowa has mostly avoided the massive 1980s out-migration of workers, who moved to states like Colorado and Texas to find work. However, neighboring states are beginning to perform better than Iowa, he said, adding that Iowa still has 50,000 fewer working Iowans that it did at its pre-recession employment high.
Complicating Iowa's loss of baby boomers is the state's difficulty in retaining some of its most experienced young workers.
The state, long concerned about the loss of college graduates, managed to outpace the U.S. in attracting workers ages 25-34, growing 5.4 percent compared with 2.9 percent nationally. But the gains were centered in Iowa's large metro areas, while smaller towns and cities experienced losses, Swenson's report shows.
However, the number of experienced young workers, ages 35-44, declined statewide by 18.1 percent, twice the drop nationally. That included a 10 percent drop in large metro areas.
The "older young adult-losses mean that workers who had gained the most skills, education and productive capacity migrated elsewhere," Swenson wrote. "There is another important aspect to this migration: Most of these young adults would have been in families with children." That means the state also loses future generations of young workers.
Those statistics tend to buck the notion that many former Iowans return to the state when they begin a family, said Mary Bontrager, a vice president at the Greater Des Moines Partnership, a group focused on economic development. "That's at least what we hear anecdotally," she said.
Metro Areas Outpace State in Numbers
Bontrager said metro areas like Des Monies tend to outperform the state. For example, Des Moinens metro area saw an 18 percent increase in total population over the past decade, although the 35-to-44 population was mostly flat. She said Des Moines-area businesses have been concerned about the impact of retiring baby boomers for several years, although the impact was delayed by recession.
She said large metro-area companies, because of their growing global operations, are pulling workers from international markets, a move that helps relieve some labor pressure.
Ralston, the ABI president, said many Iowa manufactures are pressing hard for immigration reform to help alleviate growing concerns about labor shortages. "They need foreign workers and their communities do, too," he said.
Companies also are competing aggressively with each other for workers. "Those companies that pay workers premium compensation and benefits are doing the best and attracting workers," Ralston said. "Maybe that's the takeaway."
Swenson agreed an increase in pay is one possible outcome with fewer workers and greater demand. Other possibilities: Companies could use technology to replace labor, or companies could decide to relocate business to other markets for more abundant, less expensive talent.
That's something nobody wants to see, Ralson said. "We don't want companies have to turn down orders because they can't get workers," he said.
SHINE ON!
Retiring Boomers Already Hurting Iowa Economy
Written by Donnelle Eller, March 13, 2013 - www.desmoinesregister.com
______________________________________________
Retiring Boomers Already Hurting Iowa Economy
The state has gained young adults but is losing the next age group of more experienced workers.
The loss of retiring baby boomers has already begun to restrict Iowa's economy, a problem that will only grow over the next decade, a new report shows.
We've acted like it's a problem that fie years down the road, but it's happening right now and it will accelerate over the next 10 years," said David Swenson, an economist at Iowa State University, who released a report Wednesday looking at the economic impact of population trends, such as retiring baby boomers and the out-migration of young workers.
"Talk with any Iowa manufacturer, and you know that this is an issue," said Mike Ralston, President of the Iowa Association of Business and Industry, a group that represents about 1,400 companies across the state.
"It's a huge concern," said Ralston, who adds that some companies have slowed expansions because of difficulty finding available workers.
Swenson's study shows that Iowa's workforce shrank nearly 3 percent since the beginning of the recession in 2008. Some of the decline can be explained by discouraged workers leaving the labor market during the recession because there weren't available jobs. But Swenson said it plays a small role.
"Baby boomers are aging out. There are two dimensions: You've got one group at age 65 or so who are leaving the workforce. ...And they're exiting at a higher rate than young people populating the workforce," Swenson said. "And there's another group who, because of prolonged economic stress, are taking early retirement."
The trend only worsens through 2020, he said. Working Iowans - ages 16 to 64 - are expected to contract 3.8 percent from 2010 to 2020, about the same percentage that the U.S. workforce is expected to expand, he said.
Recession Has Similarities to 1980
The labor force constraints already are holding down Iowa's recovery from the recession, which Swenson said now has "more in common with the devastating 1980 Iowa contraction that it does with the recessions that occurred in the intervening years."
In the 1980s, the state suffered from a broad national recession that deepened into the farm crisis as farmland and commodity prices bottomed out. "The period of lost employment resulted in the state's population contracting by 4.3 percent between 1980 and 1990," Swenson wrote in the report.
Swenson believes that Iowa has mostly avoided the massive 1980s out-migration of workers, who moved to states like Colorado and Texas to find work. However, neighboring states are beginning to perform better than Iowa, he said, adding that Iowa still has 50,000 fewer working Iowans that it did at its pre-recession employment high.
Complicating Iowa's loss of baby boomers is the state's difficulty in retaining some of its most experienced young workers.
The state, long concerned about the loss of college graduates, managed to outpace the U.S. in attracting workers ages 25-34, growing 5.4 percent compared with 2.9 percent nationally. But the gains were centered in Iowa's large metro areas, while smaller towns and cities experienced losses, Swenson's report shows.
However, the number of experienced young workers, ages 35-44, declined statewide by 18.1 percent, twice the drop nationally. That included a 10 percent drop in large metro areas.
The "older young adult-losses mean that workers who had gained the most skills, education and productive capacity migrated elsewhere," Swenson wrote. "There is another important aspect to this migration: Most of these young adults would have been in families with children." That means the state also loses future generations of young workers.
Those statistics tend to buck the notion that many former Iowans return to the state when they begin a family, said Mary Bontrager, a vice president at the Greater Des Moines Partnership, a group focused on economic development. "That's at least what we hear anecdotally," she said.
Metro Areas Outpace State in Numbers
Bontrager said metro areas like Des Monies tend to outperform the state. For example, Des Moinens metro area saw an 18 percent increase in total population over the past decade, although the 35-to-44 population was mostly flat. She said Des Moines-area businesses have been concerned about the impact of retiring baby boomers for several years, although the impact was delayed by recession.
She said large metro-area companies, because of their growing global operations, are pulling workers from international markets, a move that helps relieve some labor pressure.
Ralston, the ABI president, said many Iowa manufactures are pressing hard for immigration reform to help alleviate growing concerns about labor shortages. "They need foreign workers and their communities do, too," he said.
Companies also are competing aggressively with each other for workers. "Those companies that pay workers premium compensation and benefits are doing the best and attracting workers," Ralston said. "Maybe that's the takeaway."
Swenson agreed an increase in pay is one possible outcome with fewer workers and greater demand. Other possibilities: Companies could use technology to replace labor, or companies could decide to relocate business to other markets for more abundant, less expensive talent.
That's something nobody wants to see, Ralson said. "We don't want companies have to turn down orders because they can't get workers," he said.
SHINE ON!
