Companies may face exodus soon as boomers retire

When executives at Platte River Power Authority, an electric company in Fort Collins, Colo., surveyed employees 18 months ago, they were stunned by a particular finding: 40 percent of the company's 200 workers said they intended to retire over the next five years.

With little chance of hiring from other stretched power plants — and apprenticeships for technicians typically taking at least four years — executives faced a stark reality. "We've got to be moving right now," says Dave Green, human-resource manager. He is scrambling to hire trainees and recently created a new job — plant assistant — to fill apprenticeships as soon as they open up.

Across a wide swath of industries, companies are starting to address the impending exodus of baby boomers — the 76 million Americans born between 1946 and 1964. The oldest boomers will begin turning 60 years old next year. Just two years later, they can start collecting Social Security benefits.

Many company retirement benefits kick in around the same time: most workers in traditional, defined-benefit pension plans become fully vested between the ages of 55 and 62. And those with 401(k)s or other defined-contribution plans can tap them with no restrictions starting at age 59 1/2.

Many baby boomers, of course, may decide to stay on the job longer than previous generations — particularly to shore up savings. Still, the number of potential retirees is stark: More than 40 percent of the U.S. labor force will reach the traditional retirement age by the end of this decade, according to a new study by the Conference Board, a New York research organization.

In the next seven years, the number of U.S. workers between ages 55 and 64 will grow 51 percent to 25 million, meaning the fastest-growing portion of the work force is the one at most risk of retiring soon. At the same time, the number of workers between ages 35 and 44 is expected to shrink by 7 percent.

Some sectors could be particularly hard-hit. About half of the country's 400,000 electric-utility workers, such as those at Platte River, will be eligible to retire in the next five years, says Michael Ashworth, a researcher at Carnegie Mellon University in Pittsburgh. Half the U.S. government's civilian work force will also be eligible to retire in the same time period. And 40 percent of the manufacturing work force is expected to retire in the next 10 years, the National Association of Manufacturers warns. Overall, that could leave a shortage of 5 million skilled workers between 2010 and 2012.

To be sure, some fields are poised to lose large portions of their work forces because they have attracted fewer young people in recent years.