A massive generational shift in the workforce is underway, over the next two decades an estimated 10,000 Baby Boomers will retire each day.
Workers in almost every organization have experienced a panicky moment when they realize the only person who knows how to reach a certain contact or locate a needed document no longer works there. Often, that person has retired.
A massive generational shift in the workforce is underway as over the next two decades an estimated 10,000 Baby Boomers will retire each day. The 79 million Baby Boomers born between 1946 and 1964—now ages 51 to 69—comprise the largest generation in U.S. history.
At each stage of life, Baby Boomers have reshaped culture, music, fashion, politics, and the economy. Now comes retirement. The first Boomers reached the traditional retirement age of 65 in 2011. Four years later, Millennials, as 18- to 34-year olds are known, surpassed them to become the largest generation in the U.S. labor force, with one in three workers part of this 53.5 million-strong cohort.
When older people temporarily can’t remember a name or why they went to the kitchen, such a “senior moment” is an inconvenience. When a business “forgets” how things are done, it hurts profitability.
Worse, the loss of knowledge may not be temporary. With four million Boomers a year leaving the workforce, more than half in leadership posts, what’s lost is a wealth of accumulated skills and experience, relationships and networks cultivated over years, and firsthand recollections about the development of products, services, and marketing strategies.
This workplace threat is so significant it has acquired a name: The Baby Boomer Brain Drain.
You can find a succinct summary of this demographic shift, the resulting talent gap, and steps to avoid it in an infographic created by MBA@UNC, UNC Kenan-Flagler Business School’s online MBA program.
The graphic shows which states will be most affected, what companies are doing to prepare, and steps you can take to transfer the Boomers’ knowledge to the Millennials who will succeed them. Some best practices have emerged, which are summarized below.
Analyze Your Workforce
Understanding your exposure to the generational shift is key. Nearly two-thirds of Fortune 1000 companies believe they face near-term skilled labor shortages, but 68 percent of employers have not analyzed their workforce demographics and half do not track the percentage of employees eligible to retire within two years.
These are fundamental elements of strategic workforce planning, a process that becomes more difficult and more necessary the larger your organization. In a nutshell, strategic workforce planning means having the right people in the right positions at the right time and price.
To begin assessing your risk of Baby Boomer brain drain, gather data from your employee records: age, tenure, salary and job type. What you want is a clear picture of how many Boomers you have and what positions they occupy in the organization.
Retool for Greater Flexibility
You can mitigate brain drain by slowing Boomer departures. Examine your policies, schedules and benefits to improve older worker retention. Flexibility is key.
Greater longevity and the Great Recession have made retirement-age Boomers want and need to keep working, but that doesn’t mean they want or can maintain the same workload. A recent study found that 94 percent of Boomers who plan to continue working would like a special work arrangement, but only 37 percent of working retirees reported having one.
Alternatives to full-time, 40-hour-per-week positions include job-sharing, part-time, flex time, telecommuting, compressed work weeks, phased retirement, sabbaticals and consultancies.
Create solutions that work for your business. The CVS Snowbird program lets older employees in cold climates spend the winter working in stores in warmer locations, retaining mature workers while meeting a need for extra help serving customers who also winter in the South.
Identify Key Succession Risks
After you’ve addressed retention issues, return to your strategic workforce analysis and become more specific. Identify employees who pose the greatest retirement risk and prioritize succession planning efforts by weighing such factors as which positions will be most important to future business needs, what knowledge will be lost with a given employee, which positions could be filled by internal talent, and how your labor market may affect cost and timing.
Remember, Boomer retirements will continue for years, and strategic workforce planning is an ongoing process, not a project you complete. The U.S. Office of Personnel and Management illustrates its workforce planning model as a circle.
Engage Senior Workers and Successors
Approach senior workers you’ve identified and solicit their active involvement in capturing their knowledge. The tone and context of these conversations must emphasize their value to the organization and career aims, avoiding any sense that they are being nudged toward the door.
This is why establishing a senior-friendly culture is important. 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 emerging leaders 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. Three-quarters of Millennials welcome having a mentor, and 58 percent turn to Boomers, rather than Generation Xers (ages 35 to 50 in 2015), for professional advice.
Facilitate Transfer of Knowledge
Create multiple formal and informal opportunities for mentoring and coaching. Formal one-to-one mentoring relationships make sense in many cases, but you can gain broad benefits by routinely pairing older and younger workers in intergenerational work teams. Involve senior workers in internal new-hire and cross-departmental training programs.
Technology can augment personal interactions. A variety of software programs are available to help organizations match candidates and track progress. Internal websites, blogs and wikis make it possible to compile detailed knowledge of company history, processes and procedures, which can be continually updated and readily available to employees.
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. That is to harvest institutional knowledge and workplace wisdom, creating a bounty for the workers who follow and the companies that facilitate the transfer.