Facing the Silver Tsunami
Facing the Silver Tsunami
An Upcoming Challenge for US Businesses
In the current landscape of organizational dynamics a notable shift is underway as the “silver tsunami” approaches-– a phenomenon characterized by a substantial wave of retirement among business owners. A NPQ article says it “will affect US businesses with tens of millions of employees.”
Background
Research by Project Equity shows there are 2.9 million businesses with owners aged 55+ in the US. The same study shows there are 32.1 million employees whose owners are over this age. This means retirement is not too far off in the minds of 32 million Americans. According to the US Bureau of Labor Statistics this is close to one-fifth of the nation's entire labor force.
Varied Impacts
As the silver tsunami continues to march forward, it is crucial to acknowledge how this could potentially impact different industries. Certain sectors may be more heavily reliant on experienced professionals, and their retirement could have more pronounced effects. Furthermore, businesses that fail to address the challenges posed by the silver tsunami may face a competitive disadvantage as they experience a loss of retention of institutional knowledge, lower employee morale and productivity, and less proactive succession planning.
Solution
To proactively navigate the challenges of the silver tsunami, businesses should begin thinking about strategic measures. Embracing employee ownership models could greatly help by fostering a more engaged and sustainable organizational culture. Employee ownership models, such as Employee Stock Ownership Plans (ESOPs), worker cooperatives, and EOTs fundamentally change the dynamics within an organization. By extending ownership to employees, they also instill a shared sense of responsibility for the organization’s well-being.
Go Deeper: Small business closure crisis