For the first time in years, headhunters are struggling to find qualified managers and executives to fill vacant positions. Companies are seeing the leading edge of the 76 million-strong baby boom generation starting to retire, and with only 45 million Gen-Xers in the next cohort, a seismic shift is beginning to take place in the labor pool. The dynamics may include higher pay for some, although not all commentators agree on how it will play out.

“This is the hottest market since [the employment slump of] 2001-2003, and it’s going to get hotter,” said Amy-Louise Goldberg, senior director at Leslie Kavanagh Associates, a New York-based executive search firm. “We will probably see a return to the late 1990s IT phenomenon, but this time for other positions such as compliance,” she said.

The demographic changes have been anticipated for some time, Ms. Goldberg said. However, not every company has had the foresight to prepare for it.

“Approximately 30 to 40% [of companies] are not proactively addressing the expected upcoming shifts,” Ms. Goldberg said. “Frankly, most are deferring. I think progressive companies are going to seek older and other nontraditional workers. In order to meet increasing demand for specialized talent, large global firms have to relook at the pool of available talent to redefine what is a viable worker.”

To put the aging population in perspective, the number of jobs in New York State will grow by 8.6%, or almost 800,000, over the next 10 years, according to projections from the New York State Department of Labor, with management positions growing even faster, up 11.5%, or over 50,000. In its latest 10-year projection, Cornell University’s New York Statistical Information System estimates that the working-age population (15-64) is set to grow a mere 1.3% over the same period. Clearly something will have to change if employers want to fill all the projected openings.

The particular needs of an aging population will have an impact on the labor market beyond executive and managerial roles. As New Yorkers age, their needs for medical care will increase dramatically.

The state Department of Labor projects that four of the top six fastest-growing jobs will be in health care: physician’s assistant, medical assistant, medical record clerk, and therapist’s aide. Anywhere from 35% to 45% more people are expected to be employed in these jobs over the next decade.

Tightness is already beginning to show up in the health care industry, with a projected statewide shortage of over 12,000 nurses in 2005. The shortage is set to grow even larger by 2010, according to Mark Genovese of the New York State Nurses Association. He said some New York hospitals are dealing with the shortages by ordering mandatory overtime. Nysna estimates that almost half of New York’s nurses have been subjected to mandatory or nearly mandatory overtime.

Big companies have known about the pending demographic changes for a while, and the savvy ones have made plans.

“IBM recognizes that some pretty powerful forces are at work,” said Harriet Pearson vice president corporate affairs for IBM. “We are tending to live longer, healthier, and work longer. Meanwhile, the baby boom generation is getting older and that is combining with the other factors to create a shift. That shift is similar in magnitude to the large entry of women into the workforce in the 20th century.”

Ms. Pearson said that the Armonk-based computer giant has for decades been creating a flexible environment that will allow it to hold on to its workforce. “Each year we invest $750 million in learning and education for our workforce,” she said. But IBM goes beyond the generic flexible-schedule bandwagon that many companies profess to offer. It’s actively engaged in mapping careers ahead of time for top performers.

This fits with Ms. Goldberg’s view of how to retain key staff: “People that are high performers typically want opportunities to self-actualize. The companies that are going to keep people are doing more active management of key players.”

Meanwhile, the market for top talent is set to get even hotter. Stefan Schneider of Maximum Management Corporation, a New York-based search firm, says there has been an increase in openings for specialized recruiting. The way he sees it, companies are getting set to do a lot of hiring.

Lawrence White, a professor of economics at NYU’s Stern School of Business, is more sanguine about the prospects for inflationary pressures on salaries. “To the extent that the baby boom generation does retire, I think there will be a reduction in the labor pool that will, other things being equal, cause pay to rise,” he said.

However, things are rarely that simple, and Mr. White wonders whether the baby boomers will have enough assets to retire without scaling back their lifestyles or taking out home equity loans.

“We may see less of a reduction in the labor pool from retiring baby boomers than at first thought,” he said. “They may retire from current positions and go back on a freelance basis.”

In addition, he points out that there is slack in the labor market. “We have unemployment rates of 5.2% that are above what we experienced in the late years of the Clinton administration, so there is room for a reduction in the labor force to absorb some retirements.”

In contrast to other observers, he doesn’t expect a future shortage of executive talent because of the larger percentages of people in younger generations earning higher degrees. “Each successive cohort has a larger and larger proportion of its membership having earned MBAs and JDs,” he said. “So smaller numbers [in each later generation] will be offset by a larger proportion [of qualified talent].”