By 2025, the United States will face a shortage of around 29 million workers as 77 million baby boomers retire from the workforce, but only 48 million Generation X members enter it. This will create a significant workforce gap and loss of expertise. Different generations also have varying workplace expectations that companies must cater to in order to retain talent. Meeting the needs of both retiring boomers and younger millennials will be challenging but provide opportunities to reduce attrition across generations through flexible work arrangements and mentorship programs. Managing workforce demographics and changing trends, such as increasing numbers of female employees and demand for learning and technology, will be key to ensuring access to talent.

1. Insights
Keeping the Workforce
An acute workforce shortage stares us in the face
- Dr. Martin Lockstrom, Girish Khanzode
Abstract
20 countries around the world currently show zero or negative population growth. With birth rates on the decline, the
aging world may well be sitting on a demographic time bomb.
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2. 5
Declining Birth Rates
The worldwide fertility rates for developed and developing countries are
dropping and will stagnate.
4
One quarter of European Union now
has a declining population
3
Low birth rates will result in
shifting of talent base from
established geographies
(Europe as stated in slide) to
emerging geographies giving
2 rise to more remote work
FORECAST
1950-55 65-70 80-85 95-2000 2010-15 25-30 45-50
The shift in age profile has serious implications for nations, industry and society, not least of which is an
acute workforce vacuum. By 2025, the United States alone will be short of around 29 million workers, as
77 million baby boomers (those born between 1946 and 1964) retire from the workforce, but only 48
million individuals belonging to Generation X (those born between 1965 and 1980) enter it. This
retirement will deal a double blow to organizations unless they find a way to prevent the tacit
knowledge (which apparently accounts for 42% of a company's knowledge) and connections held by
their mature workers from leaving with them; for research shows that when even a few key members of
a network - such as those who possess important knowledge or integrate the network - leave, they
leave a disproportionate impact on its connectivity.
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3. Baby Boomer Retirement will
Create a Workforce Vacuum
By 2025, total 77 million The group of 48
US Baby Boomer would million Gen Xers is too
retire, creating a loss of small to replace
expertise boomers
77
Millions
48
Millions
The young, tech-savvy generation
that will fill this gap has entirely
different work expectations from
earlier generations
Therefore, it is in the interest of employers to retain or re-hire their senior workforce. Studies indicate
that only 20 to 40% of 55 to 65 year olds say that they are fully retired, implying that the majority is still
open to the idea of employment. The desire to continue working beyond retirement age is primarily
driven by economic factors, including the rising cost of healthcare and the need to financially provide
for longer life expectancy as well as bolster savings that were badly impacted by the financial crisis. That
being said, companies must recognize that their older employees will stay on only if their expe ctations
(shorter/flexible working hours, respect of colleagues or sense of fulfillment) are met.
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4. Another way that organizations can bridge the workforce gap is by recruiting
millennials - those born in the two decades between 1980 and 2000. Once again,
they will only be able to retain these employees by catering to their important
needs, some of which are unique to their generation. At the top of the millennial
employees’ wish list is access to technologies at the workplace, which are at least
as, if not more sophisticated than what they’re habituated to in day-to-day life.
Balancing the idiosyncratic needs of two (or three, when including Generation
X) generations will be a daunting task for organizations and their HR managers.
Baby boomer retirement will affect This paper suggests ways to meet this challenge.
almost all industries, but have the
One of the key reasons for high attrition rates and premature retirement is that
biggest impact on sectors, such as
organizations often fail to take their employees’ expectations into account.
energy and utilities, where nearly
The risk of employee discontent is amplified in the case of a demographically
3 in 5 workers were aged between
diverse workforce, where employees from different generations have varying
41 and 59 in 2005. Government,
and often conflicting needs.
aerospace and education sectors
will also be significantly affected. Accordingly, employers must pay closer attention to their demographic
structure, in order to assess who knows what and whom, as well as gain a
better understanding of work patterns and attitudes toward technology among
different age groups. One size does not fit all.
A comparison of the workplace expectations of baby boomers and millennials
reveals some interesting findings. As expected, the two groups have very
different career motives - while mature workers seek an income (or nest egg) to
live on and want to make productive use of their time, for the young workforce,
a job is all about career and skill development, and exposure to cutting edge
technology. But they also have several things in common, such as a desire to
The problem is compounded by contribute to society through work; a preference for flexible work arrangements
the fact that it takes very long to (albeit for different reasons: baby boomers want a lighter workload, whereas
train the new workforce in these millennials are very focused on work life balance and being single, can afford
sectors (as long as 5 years in the “flexibility”); and an appreciation of the social connections formed at the
energy sector), where most of workplace. This is not surprising given that millennials are the children of baby
the job-related knowledge is tacit boomers, and therefore the inheritors of their values.
in nature.
Generation X, on the other hand, is more concerned about the corporate ladder
and compensation.
It is imperative to reduce attrition among workers of all
ages.
A significant proportion of people of retirement age want to continue working but
don’t because they feel that their companies’ structure, processes or culture, are
not supportive of their needs. On their part, organizations might be prejudiced
With technological advancement against extending the tenure of older workers, especially since they cost more
enabling automation of routine than inexperienced employees. Common stereotypes, painting older employees
work, specialized skills and as resistant to new ideas and technology, add to the bias. Before coming to a
knowledge are rising in value. hasty decision, HR managers must weigh the higher salaries of mature workers
against their higher productivity, the cost of recruiting and training fresh hires,
and of course, the loss of connectivity and tacit knowledge occasioned by their
exit. A closer look reveals that the workplace expectations of the baby boomer
generation are mostly about finding fulfillment and dignity. By providing an
intellectually stimulating environment, autonomy, exposure to new challenges
and recognition, organizations can hold on to their valuable and mature human
resource assets for a while longer. And what about the millennial generation?
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5. Let’s take a look at some typical personality traits to understand
the influences shaping the millennial employee. The millennial is a
digital native, a technophile. He is spoilt for choice, in an Internet
world of instant gratification, and ever improving services and
experiences, many of which are available free of cost. His decisions
are shaped by peer opinion, flowing freely over the online social
networks that he is part of. As a consumer, the millennial is highly
demanding – (remember, he benchmarks against the Googles,
Amazons and Facebooks of the world) – and equally fickle. There’s
no reason to believe that he will be any different as an employee. In
contrast to the older generation worker who would spend an entire
lifetime in a single company, the millennial is expected to be a job
hopper. Born to financially secure (helicopter) parents, the millennial
can afford to be choosy about where he works.
Different problems require different
What this means is that employers will have to make special efforts
to attract and retain millennial talent. In 2010, the Harvard Business
solutions.
Review published that the millennials’ top expectation from their
employer was an opportunity to enhance skills for the future,
followed by adherence to strong values, customizable benefits,
work-life balance and a visible career path. They viewed the boss as Although workforce aging is more of an issue
someone who would guide them in their career, and as a source of in the United States and Europe at present,
honest feedback and mentoring. The millennials’ love of technology countries like India and China, despite large
was once again evident in their strong desire to learn new technical youthful populations, also face talent shortage
skills on the job, which ranked above the need to improve personal of a different kind. These high-growth markets
productivity, leadership abilities, functional knowledge and haven’t yet developed a sufficiently deep middle
creativity. This explains the findings of a survey in which more than management resource pool, so necessary for
half the millennials said that (the quality of ) technology would nurturing junior employees in any organization.
strongly influence their choice of employer. As a result, many employees do not realize their
full potential and become discontented. The usual
But as mentioned earlier, like the baby boomer, the millennial also
response of organizations is to raise salaries, which
values relationships with colleagues, flexibility, peer recognition
rather than ameliorating the situation, worsens it,
and exposure to new experiences and challenges.
as competitors continuously outbid each other to
Such similarities open up many opportunities to organizations to induce a vicious cycle of job-hopping and wage
simultaneously mitigate premature retirement and attrition among escalation. Instead, companies should focus more
their baby boomer and millennial staff respectively. Flexible or part- on mentoring, coaching and basic orientation
time hours and remote work arrangements answer the need of both training in order to lower the threshold at which
generations for a balanced personal and professional life. Mentoring workers become productive.
of various kinds - remote, group or anonymous - can bring both
age groups together to benefit mutually. For instance, during the
course of reverse mentoring, millennials can teach seniors how to
use technology, and hone their own leadership skills in the bargain.
Seniors can mentor young executives in functional areas, as well
as pass on their wealth of tacit knowledge during face-to-face
interaction. (This is much more effective than relying solely on a
collaborative technology platform to gather and disseminate such
hard-to-codify knowledge.)
Needless to say, this inter-generational interaction won’t materialize
by itself, needing a mandate from the top as well as internal
champions to spearhead the efforts.
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6. This is not just about the aging
workforce.
Managing the aging workforce is only part of the story.
In order to ensure access to world-class talent in the
21st century and turn their human resources into a
competitive advantage, organizations need to configure
their workplaces to meet the future needs of their people.
Some key trends indicate what these might be
• Increasing female workforce. According to the
Bureau of Labor Statistics, women employees
are a two-thirds majority in 10 industries out of
15 that are tipped to grow the fastest over the
next few years. For example, in the United States,
women already make up half of the workforce. As
organizations hire more women to fulfill various
positions, they will have to accommodate their
dual responsibilities by offering flexible work
arrangement and other support services.
• Dynamic working schemes. Working schemes will
not only become remote and flexible, but also
more innovative. Solutions such as eLancing will
be used more frequently to quickly bring a trained
workforce on board.
• Flexible training. Not just jobs, even training will
become more flexible, as younger workers embrace
on demand, anywhere, anytime learning.
• Smarter communication. Increasing use of personal
devices like smartphones (even at work) will enable
millennials to maintain work-life balance.
• New assistive technologies. These will help the
ageing workforce remain productive longer.
• Virtual workplace. Distributed technologies will
enable all types of workers to work from anywhere
to improve productivity, reduce travel time and
infrastructure costs, and promote sustainability by
leaving a smaller carbon footprint.
Organizations that embrace these trends will improve
their supply of talent by making existing workers
more productive, reducing attrition and delaying the
retirement of older employees. Those that reject it may
well end up looking down the barrel.
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7. About the Authors
Dr. Martin Lockstrom
Principal Consultant, Building Tomorrow’s Enterprise, Infosys Labs
Martin is a specialist in Supply Chain and Operations Strategy,
Outsourcing/Offshoring and International Management. During a
six-year stint in China, he established the research and education
activities at the SCM, Sustainability and Automotive academic
centers at China Europe International Business School, Shanghai.
He established the first endowed chair for Purchasing and SCM in China at Tongji
University, Shanghai, and was also responsible for setting up Supply Chain Management
Institute China, an international network of SCM research and education hubs.
Martin co-founded Procuris Solutions, an IT company specializing in SCM-related solutions,
offering consulting services to companies like Accenture, Ariba, BMW, Clariant, Dell, Dow,
Ernst & Young and Intel, among others.
He has a Ph.D. in Supply Chain Management from European Business School, Germany, a
bachelor’s and master’s degree in Industrial Engineering and Management, from Chalmers
University of Technology, Sweden. He speaks Swedish, English, German and Chinese,
has published over 50 articles and papers and presented at more than 60 conferences.
Girish Khanzode
Products & Platforms Innovator for futuristic technologies, Infosys
Girish has around 20 years of Enterprise Software Product
Development experience. He has built and led large engineering
teams to deliver highly complex products in various domains,
covering the entire product life cycle. Currently, he is engaged
in innovating and building the next generation products and
platforms in the area of future of work. Earlier, he worked on Enterprise Data
Privacy Product. Before joining Infosys, he setup a startup engaged in creating
financial technology products. Prior to that he worked at Symantec for 8 years
and delivered core security technology engines of the company. The products
using these engines had a combined revenue of more than US$ 2 billion. One of
his products, Symantec LiveUpdate, had 300+ million software client installations
with 24x7 operations to protect worldwide computers from emerging viruses in
real time.
Girish holds an M.Tech. degree in Computer Engineering and a bachelor’s
degree in Electrical Engineering from Government College of Engineering, Pune.
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