Despite all the publicity on young start-up entrepreneurs, most small businesses are actually owned by older Americans. In fact, the latest statistics show that 78% of small business owners are over the age of 40.
According to our recent survey, more executives are starting new businesses this year (23%) compared to the same period last year (16%). This may be linked to the age range of executives currently in the market for new opportunities, which is steadily rising, consistent with demographic trends (we saw a 9% increase in the 61+ age group of senior executives seeking new opportunities).
It is widely known that 10,000 Baby Boomers retire every day, but “retirement” is a relative term. We work daily with senior executives who are pondering their options for the next chapter in their careers. Many of them have reached a summit in their profession and are transitioning out of a senior leadership role. While some may seek reemployment in a similar role, many are ready to start a new adventure that will allow them to continue to offer vital contributions to the business or nonprofit worlds, while at the same time dial back on long hours and deadline-driven pressures.
In addition to demographics, the Great Recession played a part in the burgeoning pool of senior executives seeking their next chapter. In some cases, they were laid off during the downturn and never recovered their career or financial standing. Research shows that the recession slowed the hiring of older workers in general, and lengthened their time in the unemployment ranks. On the other hand, the stock market rebound in recent years has meant that some senior executives now have the luxury – but not the need – of seeking a new professional engagement.
Another trend contributing to this phenomenon is the gig economy. Outsourcing continues to grow exponentially, with the majority of U.S. workers expected to be contract workers by 2027. As companies increasingly cut costs and gain productivity in this way, senior executives who are in the market often benefit. For example, they can take on project or consulting work from their former employers, but can do so with more flexibility and at their own discretion, and could even make more money. As a contract worker, they are also free to take on other gigs that suit them, or explore other career options on a parallel track. Generally speaking, this group values time and experience over cash, so consulting is a common second-act career choice.
As more and more workers reach retirement age, employers should not ignore the “Baby Boomer Brain Drain,” wherein vast amounts of institutional knowledge are walking out the door along with exiting senior executives. For this reason, many companies are seeking ways to transfer knowledge to the next generation, or to keep senior executives in part-time or semi-retired roles. In the same vein, alumni networks are invaluable resources that allow many organizations to tap into former employees’ knowledge and expertise. Maintaining relationships with valued ex-employees can have numerous other benefits, such as brand ambassadorship, client or business partner referrals, and recruiting.
Against this backdrop, it’s worth noting that our study showed the majority of executives surveyed (75%) chose to seek a new job with an organization, and most credited networking as the primary source for new opportunities. In addition, the majority (64%) assessed their salaries and qualitative factors as the same or better than their previous positions.
Regardless of where and how senior executives land, it’s clear that Baby Boomers are enjoying a multitude of options as they consider the best-fit possibilities for the next chapter in their careers.