We’ve written a great deal about companies struggling to staff their organizations these days. Many are having to lower their minimum criteria, increase wages, or simply leave positions unfilled. Perhaps the most obvious labor shortage is in retail and service positions, which manifests itself in unexpected retail store closures and slow service at a favorite restaurant.
Because these shortages are occurring in industries that are often associated with younger workers, many assume these younger workers’ leaving or choosing not to return is driving the shortage. New data, however, suggests the cause is quite different.
Mature, Not Young, Workers Most at Risk
“Early retirement—whether forced by the pandemic or made possible otherwise—is having a huge impact on the labor market,” writes Allison Morrow in an article for CNN. “And data show that retiring boomers, far more than ‘lazy’ millennials, are the biggest force behind the labor shortage.” Morrow cites data showing that in November 2021, 3.6 million Americans left the workforce, with no plans to return. Of these 3.6 million, 90% were over the age of 55.
Reasons for Leaving the Workforce
There are a few different reasons older workers might choose to retire early, but several seem particularly impactful. First, whether they fear for their health or disdain increased masking, vaccination, and testing requirements, the COVID-19 pandemic has caused many older workers to be less than enthusiastic about returning to the office. Second, the combination of skyrocketing housing prices and a strong stock market means that boomers—who are more likely to own their own homes and have large stock holdings than younger generations—are doing very well financially and can actually afford to retire early.
While this new data might help explain a major factor in the labor shortage, it doesn’t necessarily offer any comfort to companies still struggling with the shortage. In a follow-up post, we’ll discuss some strategies for businesses trying to hold onto or lure back their older workers.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.