The convergence of Boomer retirements, AI-driven job restructuring, and reduced entry-level hiring is accelerating a talent cliff. Employers must act now to future-proof their workforce by retaining institutional knowledge, investing in upskilling, and rebuilding internal talent pipelines.

Baby Boomers still make up about 15% of the workforce. With many employees working past traditional retirement ages, a mass retirement is approaching fast. Companies must adapt to this changing workforce. While employers can retain organizational knowledge longer and benefit from decades of work experience to ease succession planning, they are also faced with the enormous and looming talent cliff when Boomers start retiring en masse. 

This talent cliff presents a risk to organizational continuity, particularly for leadership roles and institutional knowledge.

Why the talent cliff is accelerating faster than you think

The workforce landscape has shifted dramatically, causing this talent cliff to accelerate faster than expected. Besides an aging workforce, we’re also facing unprecedented AI disruption and the largest wave of layoffs since the pandemic. 

Three major forces are now converging, expediting the talent cliff faster than expected:

Impending Boomer retirement:

• It’s estimated that 15% of the workforce is currently made up of Baby boomers, which means 15% of the workforce could retire within the next eight years. 
• A study from the Alliance for Lifetime Income found that U.S. employers will need to hire over 240,000 people a month on average for the next five years to fill jobs currently held by the retiring workforce.  

The AI paradox:

• A World Economic Forum survey of 1,010 C-suite executives found 92% reported workforce overcapacity of up to 20%. 
• Yet simultaneously, 94% face AI-critical skill shortages, with one in three reporting gaps of 40% or more. 

The layoff surge:

• U.S. employers have announced 1.17 million job cuts through November 2025, which is the highest level since the 2020 pandemic. 
• This is only the sixth time since 1993 that layoffs have exceeded 1.1 million.

Organizations face a complex, multi-directional challenge that requires a fundamentally different approach to workforce planning. 

Which industries are at most risk from an aging workforce?

An aging workforce also means there’s a looming and significant talent cliff.  Pew Research Center found that the share of older adults holding jobs now is much greater than in the mid-1980s, with nearly 20% aged 65 and older are still employed. 

With multiple industries facing existing or projected labor shortages, a large-scale retirement could present significant workforce challenges. The Alliance for Lifetime Income study found that the following industries are most likely to be severely impacted based on their percentage of forecasted workforce retirements:

• Utilities (16.7%).
• Manufacturing (11.8%).
• Construction (10.5%).
• Healthcare and social assistance (9.6%).
• Transportation and warehousing (9.6%).

Despite many Boomers working longer, a large share of the workforce will be retiring soon. As a result, organizations now have a critical task: Prepare for upcoming retirements, which means filling these often senior roles in large numbers. A multi-faceted approach that offers career development for older workers and future-proofing your workforce is now essential.

How AI broke the existing career ladder

Perhaps the most significant development since our original analysis is what experts are calling the "dual workforce challenge." Organizations are simultaneously experiencing workforce redundancy and AI skills scarcity.

• By 2028, nearly half of C-suite leaders expect more than 30% excess workforce capacity due to automation
• Only 46% of organizations currently integrate workforce planning into their AI roadmaps
• AI has been cited as the reason for 54,694 layoffs in 2025 alone, though research from Yale has indicated that AI isn’t actually resulting in significant job loss and the layoffs may be caused by other factors
• The global AI talent shortage has reached critical levels, with demand exceeding supply by 3.2:1 across key roles

Unfortunately, entry-level job postings in the U.S. plunged 35% from January 2023 to June 2025, with many citing AI being a key contributor. When AI can perform most tasks for a specific job, the share of people in that role falls by about 14%.

This creates a troubling dynamic: as senior boomers retire with decades of institutional knowledge, organizations are simultaneously cutting the entry-level positions that traditionally served as the training grounds for their replacements. Several years down the road, companies will struggle to find workers they can nurture into mid-level and senior talent, creating a broken career ladder and a new kind of talent shortage.

Why employees are delaying retirement

There are multiple reasons many Boomers are choosing to work longer, contributing to an aging workforce:

• Increased life expectancy: Baby Boomers generally live longer than previous generations. As life expectancy increases, they must either prepare for longer retirements with increased savings or work longer.
• Rising healthcare costs: A recent study found that while Boomers are living longer, they’re doing so in poorer health and requiring more medical care. With the high costs of healthcare, Boomers may choose to work longer.
• Current overall debt: Boomers currently have the second highest student loan debt compared to other generations. They also have the third highest credit card debt of all generations except for Gen X. They may be working longer to pay off debt before retirement.
• Insufficient retirement: As the cost of living (COL) has increased in recent years, many Americans have realized that they must save more for retirement. Many adults now believe they will need $1.46 million to retire comfortably, which is a 15% increase from last year and a 53% increase from 2020.

These factors provide employers a temporary opportunity to leverage senior talent. As long as Boomers keep working, organizations can retain highly experienced employees who have deep institutional knowledge. Since Boomers tend to stay with a single company longer, they have higher tenure compared to younger generations and thus retain more organizational knowledge.

What’s the timeline for this talent cliff?

These converging forces—mass boomer retirements, AI-driven workforce restructuring, and suppressed hiring—create a compounding problem:

Short-term: Organizations are cutting costs and headcount while experienced boomers continue to exit the workforce, accelerating the loss of institutional knowledge. Organizations need to document key knowledge and identify career advancement efforts from older workers and young workers alike.

Mid-term: The dramatic reduction in entry-level hiring means fewer workers are being trained and developed into mid-level talent, creating a pipeline gap. Organizations need to offer upskilling opportunities, including continued education and training. 

Long-term: Companies that neglect workforce development today will face acute talent shortages in three to five years, competing for a smaller pool of experienced workers while struggling to fill mid-level and senior roles internally. 

The reality is that the talent cliff will begin impacting more businesses as more Boomers retire, and shortages will continue to be felt if industries fail to onboard entry-level workers and train them in skilled positions. Failing to do so could result in a loss of both experienced workers and institutional knowledge.

How smart organizations are preparing for the talent cliff now

Leading organizations taking steps now to prepare for these shifts:

1. Retaining and re-engaging senior talent with flexible roles, mentoring opportunities, and reskilling. Doing so can help you reduce the impact of labor shortages on your organization in the short term, filling roles with skilled and highly experienced workers.
2. Upskilling employees at all levels to bridge growing skills gaps created by AI automation and retirements. Businesses and technologies are evolving so quickly, and 63% of young workers are eager to engage in ongoing education and reskilling to fill the workforce’s needs.
3. Rebuild the career ladder with intentional early career hiring and internal workforce development programs. Invest in intentional mentorship programs, employee education assistance benefits, and efforts to train and promote team members internally to help you retain top talent and ensure they have the skills your organization needs most.

Avoiding disruption from this looming talent cliff requires a dual investment strategy. Retain institutional knowledge while it’s still available and build a future-ready workforce through intentional talent development. 

Discover how EdAssist can help your organization navigate this upcoming talent cliff with employer-sponsored education benefits.