The end of retirement

Some highlights, (or lowlights, depending on your perspective), from the recently released Wells Fargo Middle Class Retirement Study, an annual look at the attitudes, preparedness, and expectations for retirement amongst middle class American worker:

1. More than half the middle class (59%) are very clear that their top day-to-day financial concern is “paying the monthly bills,” an increase from 52% in 2012.

2. Saving for retirement ranks a distant second place, with 13% calling it a “priority."

3. Four in ten middle class Americans (42%) say saving and paying the bills is “not possible.”

4. 48% are not confident they will be able to save enough for a comfortable retirement.

And last but not least the major implication for HR and Talent pros from this pretty depressing report on the state of American middle class retirement readiness:

5. 34% of the middle class say they will work until they are “at least 80” because they will not have saved enough for retirement, up from 25% in 2011 and 30% in 2012

A pretty grim situation on the current state of the average middle class American worker you would have to say. Even allowing for some sample size error, and for the inability of folks to accurately estimate the amount of funds needed for their retirement, (and their likely life spans), which I would argue would put even more folks in the 'there is no way I can ever retire' category, when over a third of folks think they will be working until they are 80 years old then I think we have to pause and think about the implications of that conclusion.Save my seat. My shift at Walmart ends at Noon.

I know it has become perhaps even trendy to say or think things like, 'I'm never going to retire', or to look at the traditional view of 'Full' retirement, i.e. doing absolutely no work at all once you leave the workforce as a relic of our parents generation, many of whom logged 30+ years at one employer and hit 65 (give or take), and started drawing a nice monthly company pension check that combined with their savings and Social Security payments would see them nicely into their golden years. With long-term employment at one employer and guaranteed pensions no longer the norm, the entire geometry of the path to retirement in 2013 looks almost nothing like it did even 25 years ago.

But it seems to me like the folks that I hear that proudly talk about 'never' retiring, really aren't the same ones that the Wells Fargo survey is measuring. Mostly, it seems, that 'I'm never retring' people are the ones that are making that decision quite consciously and out of a desire to continue the interesting and challenging work that they have been fortunate and industrious enough to have been doing. They probably could, strictly speaking from a financial point of view, afford to retire in the traditional sense close to the traditional retirement age.

No, it seems to me that most of the rest of us, and the majority of the survey respondents, still remain philosophically attached to what is fast becoming a relic of the past, that after logging 30 or 35 years as a loyal and diligent cog in the corporate machine that you'd have at least 10 or 15 years of front porch sitting, lemonade drinking, and grandchild spoiling to look forward to, all unencumbered by the demands of work, (and some 32 year-old hotshot and clueless boss).

But this survey, and likely a dozen other we can find, tell a very different story, one that is more about the mismatch between expectation and reality, and one where we see what has long been a cherished and venerated ideal bucking up against the reality of life in corporate American in 2013.

Retirement might indeed be over in America in the very near future.

Is your workplace ready to accommodate even more workers in their 70s and 80s?

Have a great week all! 

We will be unprepared, we will be uncomfortable

As 2012 winds down its final days, (we finally may even see some snow here in Western NY, and by the way, what has happened to Winter?), it is pretty common and natural to start thinking past the holidays and celebrations and look ahead, just a little bit, to the future. For most of us, 'planning' consists of at the organizational level preparing a set of 1 or 2 or 5 year forecasts for basic metrics like revenue, profit, headcount, locations, etc.  And in our personal development, plans (such as they are), often involve attaining that next step on an existing career path, achieving additional expertise or certifications, and maybe even some non-work goals like getting into better shape, or seeing the Taj Mahal. In both contexts, organizational and personal, these exercises are necessary and sometimes even helpful, but they are certainly kind of routine and often fail to adequately prepare our organizations and ourselves for radical or disruptive change that we know is coming, but we think we lack the framework or capacity to plan for.

Recently Google made news with the hiring of prominent 'futurist' Ray Kurzweil, who is most noted for his prediction that by 2045 human and machine intelligences will merge into something he calls the 'singularity', a state whereby superhuman machine intelligences and people will co-exist in a previously unimagined state of being. Other firms besides Google have engaged futurists as well, and some commentators like this one quoted in Business Insider, recommend that every corporation needs a futurist.

I think the key reason for organizations to spend a little bit of time, if not actually engaging a 'futurist', but at least thinking expansively and creatively about the future are best summarized in the BI piece from Peter Bishop:

"There will be significant change within our tenure within any position within our lifetime for sure, that we will have to learn to live in a new world — to some extent. It's not completely new the way some futurists will say. But it will be new enough that we will be uncomfortable, we will be unprepared, and that we will have to learn new skills and new techniques in order to be successful in that future compared to how we are being successful today, or indeed how we were prepared to be successful when we were in school or training."

What are some of the wild, speculative types of questions you should consider asking as you think about next year and beyond?

What if the levees don't hold, i.e., what if some remarkable external action or event renders us unable to operate?

What if our largest competitor starts giving away the product/service that accounts for 64% of our sales?

What will we do if the CEO, CFO, C-insert-any-letter-you-like-here-O resigns unexpectedly? And goes to our most-hated competitor?

What if our VP of Marketing approves a TV commercial that is so off-key that our Facebook page and Twitter feed are inundated with outraged customers?

What if Kurzweil is right, and machine technology advances incredibly quickly, making existing ideas about manufacturing, distribution, and marketing mostly obsolete?

I don't think that any credible 'futurist' or any forward-looking and curious Talent pro like you can credibly get away with endless blue-sky postulating on some of these really unlikely or fantastic scenarios. But, I do think it worthwhile to carve out just a little planning time and energy, (10%, 5%, maybe even 2%), thinking about the future not just as an incremental extension of the present, but as a potential wildly and radically different environment from today.

While you might not want to get a reputation in the office as the 'Kurzweil' or out of touch dreamer, I would also submit you don't want to be known as the 'status quo' person.

We KNOW things will change. It's (part) of your job I think to figure out what.

Happy speculating.

From the Friendly Skies: A Lesson in Workforce Planning

Here is what can happen in an industry when labor market conditions, regulatory changes, shifting compliance requirements, are mixed with a generous dose of a 'Just like the Republicans we should have seen this coming' demographic shift.

Check this out from the Wall Street Journal this past weekend - 'Airlines Face Acute Shortage of Pilots':

U.S. airlines are facing what threatens to be their most serious pilot shortage since the 1960s, with higher experience requirements for new hires about to take hold just as the industry braces for a wave of retirements.

Federal mandates taking effect next summer will require all newly hired pilots to have at least 1,500 hours of prior flight experience—six times the current minimum—raising the cost and time to train new fliers in an era when pay cuts and more-demanding schedules already have made the profession less attractive. Meanwhile, thousands of senior pilots at major airlines soon will start hitting the mandatory retirement age of 65.

Another federal safety rule, to take effect in early 2014, also will squeeze the supply, by giving pilots more daily rest time. This change is expected to force passenger airlines to increase their pilot ranks by at least 5%. Adding to the problem is a small but steady stream of U.S. pilots moving to overseas carriers, many of which already face an acute shortage of aviators and pay handsomely to land well-trained U.S. captains.

It's a proverbial 'perfect storm' for the airlines, and not the familiar kind that simply traps passengers for hours on the tarmac waiting for a gate, but rather the kind from which there are no obvious or simple answers and remedies.  The workforce is aging, the requirements for new entrants are getting even more rigorous, the training or feeder systems for new replacements are drying up, (the piece cites some disturbing statistics about a dramatic drop-off in flight school training program participation), and global competition for scarce talent is driving up the salaries for many current pilots, making them much more likely to at least consider opportunities outside the USA.

This story is about airline pilots, truly probably always a pretty tough role to source for and fill, but increasingly we will see versions of this story playing out in other industries as well.  It isn't just experienced airline pilots that are getting ready to retire - it is engineers, skilled tradespeople, teachers, HR bloggers - no class of workers is immune.  And I certainly don't need to remind anyone of the ongoing drama and saga about the 'skills gap' - a topic for another day but relevant to this discussion as a reminder that an aging workforce is just one of many challenges facing the talent professional in the coming years.

Last week I had a post on some trends shaping global people management, and in that post we talked about how it was surprising and disappointing that adoption of 'Web 2.0' modern and social technologies was rated incredibly low in importance and relevance by global HR and business leaders.

One of the commenters (rightly) pointed out that the better story was another of the 'trends' that was also ranked extremely low in importance - 'Managing an Aging Workforce.' I think the airline pilots piece in the WSJ helps to reinforce that point and to remind us all, (as if we really needed a reminder), that while business, strategies, customers, technologies, and markets are constantly changing and are usually unpredictable - that one factor in this volatile planning mix is pretty constant and reliable. 

Everyone in your organization is getting a little bit older each day. And some days it feels worse than others.

Hopefully the airlines will make the needed changes and adopt new strategies to meet their resource needs - and hopefully it will give the rest of us a bit of a warning that we may not be as secure in our talent plans and sourcing strategies as we think for the time when our folks start to retire.