Driven by seismic shifts in the workforce and the workplace, the independent workforce continues to grow. One of the key drivers behind this trend is the Baby Boomer generation.
The baby boomer generation has led decades of radical political and social change, so it should be no surprise that they are also helping change the complexion of the workforce as they age. With many reaching a traditional retirement age, a new form of retirement is emerging that finds Baby Boomers exploring new ways of working.
5 Generations in the Workforce
Today’s workforce consists of five generations:
- Silent (born 1928-1945) have largely exited the workforce, but some are still working. The youngest members of this generation are now 72.
- Baby Boomers (born 1946-1964) are now reaching the common retirement age of 65 at the rate of 10,000/day.
- Generation X (born 1965-1980)
- Millennials (born 1981-1996) are demographically as large a segment of the workforce as the Baby Boomers (roughly 75 million) and just now beginning to reach their professional stride.
- Generation Z (born after 1997) are just now beginning to enter the workforce.
Of these five generations, the Baby Boomers represent the largest, most educated, and most experienced segment. As they exit the traditional workforce their impact will be enormous.
Boomers Push a New Form of Retirement
Five years ago, in 2011, the leading edge of US Baby Boomers reached the common retirement age of 65. The US Census Bureau calculates that by 2020, 55.9 million people in the US will be age 65 or older, and by 2030, that number will reach 72.7 million.
By virtue of desire or necessity, many Boomers will elect to stay in the workforce, at the very least on a part-time basis. As reported by Gallup in their “Many Baby Boomers Reluctant to Retire” report, “Nearly half of boomers still working say they don’t expect to retire until they are 66 or older, including one in 10 who predict they will never retire.”
Why? There are several likely reasons…
Staying Healthy By Working Longer
A Pew Research Center study claims most Boomers don’t consider themselves old until they reach 72 years of age. As a result many long-held beliefs about how to retire are quickly becoming outdated.
In addition, many researchers on aging are theorizing that a life overly focused on leisure can actually promote poor health. A 2014 study conducted by the Rush University Alzheimer’s Disease Center in Chicago points to living a life of purpose (identified as having a strong sense of meaning, which frequently comes from essential paid employment and/or volunteer work) as highly conducive to reducing one’s susceptibility to stroke, dementia, movement problems, disability, and premature death. In short, working in retirement could be the smarter and healthier option.
The Rising Cost of Retirement
Another not so surprising factor is that people are living longer. We now have the dynamic where people work in their primary careers for as long as 40 years, and then they need to be financially prepared for a retirement that can easily last another 30 years. With a longer lifespan, and increasing healthcare costs, many Baby Boomers are discovering they have not saved enough to fund this “new” retirement, and thus need to keep earning income.
Factors Behind the Growth of the Independent Workforce
At TalentWave, we have a front row seat to witness the growing independent workforce. Every business day we help enterprise clients and the independent workers they’ve chosen to get work done, safely and cost-effectively.
While the Baby Boomers have been driving the growth of the independent workforce, they are not alone. The appeal of more flexibility, control, and gratification transcend demographic groups. There are many reasons individuals choose to go the independent route, including such factors as:
- Greater control over their destiny. Working for themselves gives them greater control.
- To work when and where they want, for clients of their choosing.
- The average full-time independent typically earns more than the average traditional worker.
- Many independent workers report they feel more secure working independently than when did in an employee-employer relationship.
- The vast majority of independent workers report being happier than when they had a traditional job.
The growth of the independent workforce has been driven by the Baby Boomers. With growing adoption by companies of all sizes, subsequent generations will now benefit from having more options to work independently.