The numbers speak for themselves. The US Bureau of Labor Statistics (2013) states that 10,000 Baby Boomers will reach age 65 every day for the next two decades. Although participation rates of the older workers will increase by approximately 1.75x for workers in the 64 – 75 and +75 age brackets, an overall dent in the labor market will be felt.
Some companies will be hit harder than others. One client I work with will literally have to replace 49% of its workforce during the next decade. Considering that they employ tens of thousands of employees, this is no easy task. It is hard to imagine that the strain caused by such turnover will not spill over to the service they provide to their customers.
I had the pleasure of presenting at a roundtable in Houston last week and spoke about 4 priorities to prepare for the Silver Tsunami.
Priority 1 – Ensure Employee Well-Being: Retirement scores 9th on the list of top life stressors. On Holmes and Rage’s Social Readjustment Rating Scale, Death of a Spouse is the top stressor one can experience. On this scale, Retirement is more stressful than being pregnant, having a family member in poor health, and falls just under being fired from a job. Considering how much the stress of retirement can impact employee effectiveness in their jobs, companies have an opportunity to go well beyond just providing opportunities for financial advice.
Priority 2 – Keep Engagement High: Knowing that retirement is on the horizon, soon-to-be-retirees might begin to free-ride during their last months or even years on the job. Taking on new assignments may not have the appeal that they once did. Across dimensions of engagement, identification and alignment with the company are likely to remain, however the energy and absorption they feel from the job can wane. Attending to personal motivations can help ensure that the relationship does not drift too radically and that Baby Boomers feel valued until they depart.
Priority 3 – Identify Successors: Succession planning is the topic of the day. According to CEB, it scores as the top talent concern for the Board of Directors. Yet, companies are woefully under-prepared with only 31% reporting that they have formal succession planning processes in place. Understanding what roles are critical to the company, what talent pools to tap for talent, and auditing for organizational capability, to understand where investment needs to occur, is a good place to start.
Priority 4 – Facilitate Knowledge Transfer: When retirees walk out the door, they take a lifetime of experience with them. Knowledge about how systems and processes work, how to navigate across business units, and the back story about why things work (or don’t) is potentially lost. Before they go, organizations can invest in mentoring, job rotations, communities of practice, experiential learning, or sharing narratives as a means to pass on this knowledge.
The shifts in demographics are undeniable and will provide great opportunities for Generation Xers waiting for their opportunity to lead. Attending to these 4 priorities can go a long way to ensure that the organization they inherit will be in good shape.