Talent Talk: Now, More Than Ever, Businesses Need to Focus on Succession Planning

We have written many times about the demographic shift in the workforce caused by the retirement of the baby boomer generation, but 2024 will see this move to the next level. To recap, a baby boomer is anyone born between 1946 and 1964, the years following World War II.

The boomer demographic

An estimated 78 million Americans were born during this period. About 11 million have died, but nearly that many have immigrated, so about 76 million remain in the boomer demographic today.

They have been the largest segment of the workforce, have generated over $84 trillion of personal wealth, while spending almost $550 billion per year. The impact of that generation over five decades is hard to overstate, but of course our focus is on how this affects the workforce.

Simple math tells us that the first-born of that generation turned 65 in 2011; however, many factors affect retirement. People today expect to live longer and they do not have pensions like previous generations, and things like changes in the investment markets can move the goalposts closer or farther.

The year of “peak 65”

We know that about 4.2 million people will turn 65 in 2024, slightly more than previous years but not a significant difference in and of itself. Still, it is enough to have earned its own term — Peak 65.

There is growing evidence that 2024 and the next few years will see a disproportionate number of people leaving the full-time workforce. When you consider that many of these people will be in leadership roles, companies are quickly coming to a defining moment.

Now more than ever companies need to address succession planning. A recent study by HRO Today revealed that 50% of companies identified succession planning as a critical need, yet only 14% have taken any meaningful action.