A massive shift in the workforce is occurring, and it may affect your business. With thousands of baby boomers turning 65 every day, a huge workforce segment is retiring at an unprecedented rate, creating a hole where businesses lose vital information. Lost data may include a critical client, vendor contact or report location no one else knows how to access.
This phenomenon is known as the “baby boomer brain drain,” and it can have a dramatic impact on a company’s productivity. Businesses must plan for the retirement of key individuals. Without a succession plan, companies could be left trying to fill a unique gap left by each departing employee.
The baby boomer brain drain is the void in unique skills and knowledge left by baby boomers as they retire. This phenomenon occurs when a company doesn’t have a succession plan or knowledge-transfer plan in place.
The ensuing knowledge void can leave a business scrambling, and this gap can’t be filled exclusively by Gen X. Preventing the baby boomer brain drain starts with the company assessing a retiring worker’s job functions and creating an action plan to transfer the position to someone prepared to fill it.
Developing a well-thought-out succession plan is the best way to fight the brain drain. A succession plan identifies the critical positions in your company that people are vacating and develops a strategy with actionable steps to train someone else to assume the tasks.
Essentially, you want the retiring person to dump all of their information and processes on the person who will replace them. This limits the chances of the organization losing critical data.
Follow these five steps to develop a comprehensive succession plan and combat the baby boomer brain drain.
Understanding your exposure to the generational shift is crucial. A ManpowerGroup survey revealed that 75% of U.S. employers report talent shortages. Yet many employers have not analyzed their workforce demographics and don’t track the percentage of employees who are eligible to retire within two years.
Understanding your workforce demographics and tracking employee retirement are fundamental elements of strategic workforce planning – a process that becomes more difficult and necessary the larger your organization is.
Strategic workforce planning means having the right people in the right positions at the right time and price.
To begin assessing your baby boomer brain drain risk, gather data from your employee records, including employees’ ages, tenures, salaries and job types. You want a clear picture of how many boomers you have, how their compensation management is handled, and what positions they occupy in the organization.
You can mitigate the brain drain by slowing boomer departures. Examine your policies, schedules and employee benefits packages to improve your retention of older workers. Flexibility and flexible benefits are critical.
Greater longevity and the Great Recession have made retirement-age boomers want or need to keep working, but that doesn’t necessarily mean they want to maintain the same workload. Boomers who plan to continue working may appreciate a special job arrangement that offers more flexibility.
Here are some alternatives to full-time, 40-hour-per-week positions:
Create solutions that work for your business. For example, the CVS “snowbird” program lets older employees in cold climates spend the winter working in stores in warmer locations, helping the company retain mature workers while meeting a need for extra help serving customers who also spend the winter in the South.
After addressing employee retention issues, return to your strategic workforce analysis and become more specific. Identify employees who pose the most significant retirement risk. Then, prioritize succession planning efforts by weighing these questions:
Remember, boomer retirements will continue for years, and strategic workforce planning is an ongoing process, not a project you complete. In fact, the U.S. Office of Personnel Management illustrates its workforce planning model as a continuous circle.
Approach senior workers you’ve identified, and solicit their active involvement in capturing their knowledge. The tone and context of these conversations must emphasize the employees’ value to the organization and career aims, avoiding any sense that they are being nudged toward the door.
Establishing a senior-friendly culture is essential. In a supportive environment, most seasoned employees will openly discuss their future and feel pride in helping to prepare the next generation – and the company – for continued success.
Similarly, you should identify younger employees with emerging leadership skills and prepare them for the roles into which they will grow and the relationships needed for knowledge transfer.
Fortunately, millennials tend to prefer working in teams: Bright Horizons reports that 79% of millennials welcome having a mentor, and many turn to boomers, rather than Gen Xers, for professional advice.
Tip: If you have a multigenerational workforce, build your team structure so that millennials work with baby boomers. This will help the natural sharing of knowledge move from one generation to the next.
To help transfer knowledge, create multiple formal and informal opportunities for mentoring and coaching.
Organizations that ignore this looming demographic shift are indeed likely to experience a brain drain. However, with foresight, planning and a willingness to embrace the benefits that mature workers offer, the coming years present an opportunity to harvest institutional knowledge and workplace wisdom, creating a bounty for the workers who follow and the companies that facilitate the transfer.
Eric Frazier contributed to the writing and reporting in this article.