The front end of the Baby Boomer cohort—77 million strong —is turning 70 this year, with many of them already retired for a number of years. The back end of this demographic is age 52, with a lot of good work years left. In between are wave upon wave of soon-to-be retirees: deeply skilled and experienced workers leaving the workforce in unprecedented numbers. The Pew Research Center projects 10,000 Baby Boomers will reach age 65, the traditional retirement age, every day during the next 16 years.
A survey of human resources executives by outplacement firm Challenger, Gray & Christmas reveals that 20% of organizations report that up to 50% of their workers are 55 and older. “It is critical,” says John Challenger, the firm’s CEO, “that companies understand their exposure to brain drain related to retirement.”
Retirement-age workers “who do stay in the workforce,” he warns, “may decide to leave their current employer for a new industry, a new geographic location, to work part-time or volunteer. The point is, employers cannot count on their most experienced to stick around.”
Growing economy, growing exodus, shrinking talent pool
- Workforce specialist Teresa Howe, in a widely cited article, “Succession Planning and Management,” spells out a number of realities about the impact of these numbers on workforce capacity: Baby Boomer retirements are on an upswing just as the economy is growing and increasing the demand for senior management skills and leadership.
- Baby Boomer retirements are on an upswing just as the economy is growing and increasing the demand for senior management skills and leadership.
- Retirement waves create simultaneous vacancies in higher-level positions throughout the corporate and organizational workforce.
- Demographics show there are statistically fewer workers in the general employment pool (fewer women entering the workforce, more people working independently and for tech startups, and so forth)—thus there is a smaller emerging group of experienced employees on the horizon than has been available over the past several decades.
- During the corporate culture restructuring of the 1980s and ’90s, and the necessary downsizing resulting from the more recent recession, many organizations cut middle-manager positions and training and now don’t have a reliable group they can expect to fill the senior-level positions.
- Those younger managers that may be interested in being promoted into the vacancies don’t have the skills and experience required because they have not been adequately mentored and trained.
8 steps to building your talent pipeline
Howe’s observations are sobering, to say the least. But human capital strategist Sean Conrad offers eight steps that a human resources leader can take, not only to take control during the retirement surge but develop a solid talent pipeline to back up the entire organization.
- Make sure your company’s managers are having career conversations with employees. This can occur during performance reviews, or ideally, in regular one-on-one meetings between managers and employees. The managers need to document their findings and communicate them to HR, so you know the lay of the land and how big an impact the retirement exodus will have on the organization.
- Know the value of your older workers. This should go beyond a general idea of what knowledge, skills, and experience make a valuable staffer. Quantifying competencies and traits of each senior position in the organization will guide you in knowing what to search for in their replacements.
- Develop a mentorship program. Leverage the knowledge, skills, and experience of your older workers while you still have them.
- Create talent pools for all of the key roles in your organization. Start now to develop employees to fill the shoes of departing/retiring employees … in fact, employees in all key roles, Conrad says. You should have a solid portfolio of internal candidates preparing to fill those roles whenever the need arises.
- Enlist your managers to build organizational bench strength. Through structured and informal training, build the skills and experience of your full workforce.
- Consider flexible options. Older workers may consider staying with the organization longer if they have flexibility through telecommuting, reduced work hours, occasional consulting, reduced responsibilities, more vacation, and so forth. Conduct “stay interviews” with your older workers to find out what you can do to keep them longer.
- Build an external network. If you recognize you will need to replace older, skilled workers in the near future, and you don’t have parallel internal candidates to consider, start networking for successors now. Online groups and social media, industry associations, professional groups, and educational institutions all are good networking resources, for now, and for later.
- Good workforce management is talent management, always. Having your most experienced employees move out of the workforce is a reality--and always has been. The only difference nowadays is that demographics are not our side. So there is more reason now than ever to plan ahead and think seriously about your talent pipeline.
When it comes time to train that talent pipeline, you’ll need to do so in a format that appeals to the next generation.
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