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(December 10, 2003) - Established 50 years ago, the retirement age is 65 because that's when people used to die. In 1950, the average retirement age was 68 because most people on lived to see 70. Today, however, the average age is 63 while life expectancy is well over 80.

In the next 10 years, 76 million baby boomers will be retiring, but only 45 million Generation Xers are in the pipeline to take their places.

It's important to keep the numbers in some context. Generally, retirement rates average between 2% and 4% of a workforce per year. Even the most strenuous retirement pressures will only push that rate up to 5% or 6%. We don't imagine vast stretches of empty cubicles as retirees vanish. Most organizations will equip themselves to deal with a 20% or 30% increase in annual retirements with retention improvements and recruiting muscle.

The problem is more environmental.

It would be nice to be able to bang the drum and chant "the crisis is coming, the crisis is coming". Playing Chicken Little offers the hope of clarity when the real world is full of shades of grey. Changes are coming, to be sure, but they need much closer inspection to be fully understood.

The labor force is, like good politics, both global and local. Regional areas will adapt differently based on industry and skill mixes. Utah, with its blossoming population, is unlikely to suffer the same fate as North Dakota or West Kansas. California, with its huge immigrant population, will evolve differently than Oklahoma. Surpluses in manufacturing, driven by wage differentials, will resolve differently than age-wave changes in the government. The factors that drive workforce policy in College Station will have to be different than those in Austin.

Unfortunately, there are not enough English speaking college graduates in the rest of the world to handle it all with outsourcing. We're already hitting the limits of that answer. Rather, each organization needs to take a close look at its workforce supply and demand and build an individualized plan.

John Sumser

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