Baby-boomer departures a threat to competitiveness

Oct 07 2008 by Nic Paton Print This Article

In a tightening jobs' market, the fact that 77 million baby boomers are approaching retirement age might seem to be good news. But managers actually need to be doing all they can to keep such committed, experienced pre-retirees on board.

The AARP, formerly the American Association of Retired Persons, has warned that the disappearance of the Baby-boomer generation is a threat too few employers are taking seriously.

In a speech to a conference last month, the AARP's chief people officer Ellie Hollander warned that few employers recognised the effect of the brain drain they will suffer when Baby-boomers leave their organisation taking all their knowledge and experience with them.

They therefore face a challenge in how to retain or attract this generation, or to at the very least ensure they don't all retire at once.

The warning came as research by consultancy firm Novations concluded that a majority of North American employers do not seem concerned by a loss of talent because of retiring Baby-boomers.

Its poll of 2,500 senior HR and training executives found that more than a third did not expect "an unusually large" loss of talent, while fewer than a fifth anticipated "a serious loss" of talent and institutional know-how.

The same percentage – 18 per cent – also had no plans in place to mitigate this loss, although slightly more than a quarter overall said they were taking steps to respond to the brain drain.

"Based on either their inaction or failure to see the problem, organisations don't seem to be losing sleep because of Boomer retirements," said Novations consultant Lindsey Schantz.

"In fact, just one-quarter of organisations report taking any steps to alleviate an anticipated loss of talent," she added.

"At a time of widespread worry among HR professionals about the pending retirement of Baby-boomers, it's disturbing that so many organisations are either undecided or unaware of the need to stem a loss of institutional knowledge," she worried.

The two warnings echo a study by The Conference Board in August that concluded American and European businesses would suffer an unprecedented loss of skills and experience unless they got better at managing the transfer of knowledge from one generation to another.

Despite the retirement of Baby-boomers having been highlighted as an issue now for a number of years, most American, Canadian and European businesses were woefully ill-prepared for the exodus of the post-war generation from the boardroom, it argued.

Similarly, a poll last month by investment firm Charles Schwab & Co argued employers needed to recognise that, as more Americans live past 90 or even 100, the perception of what counts as "old" is changing, with most now believing old age does not start until you are 75. But employers could not expect older workers simply to work a decade longer as a result.

The AARP's Hollander has advised that the first step for organisations is simply to know their workforce demographic, although this is sometimes harder than it sounds and it is surprising how many firms do not know this.

Managers also need to get some idea about employees' long-term career and retirement plans.

While it is clearly inappropriate to go around bluntly asking whether someone is planning to retire, conversations around career aspirations or concerns can often provide a useful pointer.

Then it was also important to be flexible around retirement and an ageing workforce, for example in continuing to provide opportunities for growth and development, having competitive retirement benefits, providing healthcare benefits (including pre-65 and post-65) and, simply, generating a supportive work environment.

At a practical level, research by HR consultancy Hewitt Associates in August found more evidence of employers using phased retirement programmes to ease the transition to a Baby-boomer-less workforce.

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