In human resources circles over the past decade, we’ve heard a drumbeat of dread around what’s going to happen to our workforces when the Baby Boomer generation retires. The “brain drain” is going to be unimaginable -- it’s all going to happen so fast and we’re going to be left with skeleton crews of young, unprepared employees to man the controls as our businesses smolder in ruins. Or something like that (perhaps something less melodramatic).
More recently, thanks to the global economic meltdown and the concomitant erosion of so many retirement accounts, we’ve been told that Baby Boomers will not be retiring after all -- that we’d better start adjusting our expectations as people stay in the workforce longer and longer. Of course, if Boomers are not going to retire, what are the implications for how we run our talent management programs?
So Are They or Aren’t They Retiring?
They are not. At least not exactly when everyone expected them to when we were having this conversation ten years ago. According to the AARP Public Policy Institute, in 1985, 10.8% of people over 65 worked full-time or part-time. By 2011, that figure rose to over 18%, according to the AARP Public Policy Institute.1
A Harris Interactive poll reported this summer that older Americans now expect to retire at age 69, on average. A decade ago, they expected to retire at 64.2 That is a significant change and it shifts expectations for HR executives in very real ways.
What Happens Next?
We all know that more Boomers are working longer, but this can’t go on forever. Talent management professionals cannot push out this retirement time horizon indefinitely. According to AdAge, more than 3 million baby boomers will turn 65 years old every year in this decade.
Further, if just half of them retire that could add as many as 8.3 million people to the ranks of people leaving the workforce over the next five years.3 Startling observation from that same AgAge report: “That's more than those of all ages who left in the past five years.”
And who’s coming to the rescue to fill in the holes in the workforce? It’s the much-ballyhooed Millennials, of course. AdAge reports that over the next five to 10 years we will see more than 4 million of them a year entering the labor force.
Strategies for Easing the Impact of Boomer Retirements
HR practitioners can no longer sweep this issue under the carpet. The global economic crisis seems to have had the nasty side effect of delaying many retirements, but savvy companies need to take this issue seriously as we move into 2012. The impacts of Boomer retirements will be numerous and real and they include:
- The loss of senior leadership skills across the board
- The loss of experience/management in critical roles
- The loss of mentoring capability
- The loss of organizational memory in general
- Potential disruption as younger employees are forced to move to higher levels for which they might not be ready
Organizations are taking on these challenges from different perspectives. A few strategies that have caught our attention recently include:
Easing the Transition with Flexible Work. One way to deal with retiring Baby Boomers is to try to hold on to them for dear life and kick and scream as they head to the door. An AARP survey revealed the trend: in a survey of 10000 HR directors, 69% said that their companies are looking to keep older workers as part-time workers and consultants and 46% are trying to entice older workers to stay as full-time employees.1
Delaying the inevitable comes with risks, of course, as it often delays the movement of younger workers into higher-level positions, potentially damaging leadership development efforts and creating a bottleneck of talent (and perhaps creating frustration and limiting engagement along the way).
Using Talent Pools to Catch Bottlenecks. Talent management tools today can let HR practitioners see potential bottlenecks before they become damaging. Using these tools to build bench strength for key positions is only part of the solution. There must also be visibility into the timing of transitions -- if you’ve got a perfect candidate at peak readiness to replace a retiring manager, but that manager is not retiring for 5 more years, you might have a problem on your hands.
Building Retiree/Alumni Social Communities. The idea of alumni networks for organizations is not new, but it is growing in popularity with the emergence of social networking tools that allow companies to more easily maintain relationships with retired or departed employees.
The focus of corporate alumni networks can be on (1) rehiring departed employees (the so-called “boomerang” employee4, less of a concern with Baby Boomers), (2) business development or (3) extended mentoring and limiting brain drain. The third of these impacts for alumni social networks is most salient for our purposes here. The ability for organizations to keep in touch with retired Baby Boomers, continue the relationship via social communities, and maintain ties to younger employees left behind can all be invaluable as a way to ease the transition.
The multi-generational workforce conversation is certainly an interesting one, but some have suggested that that perhaps too much has been made of the supposed divides and how it all impacts workforce planning and optimizing workforce productivity. That’s a topic for a different blog post, along with the nettlesome issue that’s been made of how to manage those pesky Millennials.
It does seem, however, that the time has come to stop putting off the conversation about how organizations are planning to cope with the significant loss of skills and experience associated with the Baby Boomer retirements.
Republished with permission by Cornerstone OnDemand.
 http://management.fortune.cnn.com/2011/10/18/baby-boomers-retirement/?section=magazines_fortune (retrieved 4 November 2011)
 http://lifeinc.today.msnbc.msn.com/_news/2011/07/14/7082932-recessions-toll-about-five-years-of-retirement (retrieved 4 November 2011)
 http://adage.com/article/adagestat/55-unemployed-teens-seniors/229427/ (retrieved 4 November 2011)
 http://online.wsj.com/article/SB10001424052970203752604576645501136300790.html?mod=googlenews_wsj (retrieved 4 November 2011)