METHODOLOGY ***
STRATEGY demographic tidal wave
TACTICS ***
TECHNOLOGY ***
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THIS WAS TRUE IN 2004; IT’S STILL TRUE TODAY
Dear fellow turkey,
RIDING THE RETIREMENT WAVE
Bill Ayers
President & CEO
Tel: 212.889.7788
bill.ayers@ayers.com
This coming New Year’s Day will mark more than the beginning of another year. On January 1, the baby boom generation—somewhere in the neighborhood of 80 million people born between 1946 and 1964—will begin to turn 60. On New Year’s Day of 2011, what FORTUNE magazine calls “the biggest retirement wave in U.S. history” will officially begin. It will most certainly transform the employment landscape. In 2015, we’ll reach the point at which the 65+ age group begins to swell more quickly than the 20-to-64 age group, draining the traditional labor pool.
Have you given thought to what this fast-approaching demographic tidal wave will mean to your organization?
<<The heck with them, what will it mean to me?>>
Big issues/big questions
The most obvious implication is the potential shortage of employees. Are you up-to-date on the demographics of your company? Do your retirement policies encourage or discourage early retirement? Do you know who’s going to be leaving, in what numbers, and when? Are you going to have a trickle or a flood?
Even more important is the potential for a brain drain as valuable skills, experience, marketplace know-how, and institutional knowledge flow out the door with retiring workers. Human capital and organizational knowledge are two of your company’s greatest assets. Have you assessed what you’re at risk for? What key talent, skills, and competencies you’re going to need to replace and how you’re going to do that—through internal development, recruiting, or a combination of the two? Do you have mechanisms in place to institutionalize critical knowledge?
Many organizations will be particularly vulnerable at the top. We at Ayers are concerned about this because although many companies pay lip service to succession planning, too few are actually engaging in it. Have you identified tomorrow’s managers and leaders? How far down the bench? What are you doing to prepare them?
A study conducted by Age Wave, The Concours Group and Harris Interactive reveals some important issues with regard to your future managers and leaders. It shows that younger employees are the least satisfied, committed and engaged members of the workforce. Mid-career employees—those who haven’t been downsized out of organizations—are struggling with frustration. It’s the employees who are nearing retirement, the boomers, who are the most satisfied, loyal and engaged members of the workforce. How do you develop the kind of engagement that will motivate younger workers to be as loyal and productive as the generation they’re expected to replace?
Redefining the labor pool; reinventing retirement
Along with investing in the development of younger workers, perhaps the best strategy in preparing for the retirement wave is redefining the labor pool. It’s already clear that the baby boom—a generation that is the most educated in history and that will have more years during which to use that education—intends to approach its retirement years in a nontraditional way. Many of us are going to reinvent ourselves, tackle new responsibilities, and try things we didn’t have a chance to try in our previous careers.
Nearly 80 percent of boomers participating in a study by Age Wave and Merrill Lynch say they intend to keep working after 65: 42 percent want to cycle between work and leisure; 16 percent want to work part-time; 13 percent want to start a business; and 6 percent want to continue full-time work. According to a BusinessWeek analysis, increased productivity and participation in the workforce among older Americans could add nine percent to GDP by 2045, which translates to more than $3 trillion annually in 2005 dollars.
Enlightened employers have begun finding ways to tap this valuable labor pool, including
* Flexible schedules—such as part-time and on-call work—and work locations
* New benefits, such as elder-care referral services and career-long training
* Special projects
* Opportunities to mentor or conduct research.
Given the demographic trends, the strategy of keeping older employees will result in a workforce that is heavy on the higher and lower ends of the age spectrum. This will raise other issues you need to begin considering. How will you manage across generations and meet the very different needs of the two groups?
Diversity plays a role in this discussion of rethinking the labor pool as well. As the traditional pool drains, competition for all qualified candidates—regardless of gender, race, or background—will increase. What are you doing to attract and retain women and minorities?
The threshold of a new era
We are on the threshold of an era in which the old paradigm—hire and invest in the young/stop investing in and push out the old—will no longer be viable. Riding the baby boom retirement wave will require a rethinking of HR practices—everything from recruitment to retention and development to diversity.
It’s time to strategize about how your organization can take advantage of the human and intellectual capital it has now and create or recruit the resources it will need going forward. It’s time to create the programs that will help you hold onto those approaching retirement age and develop the talent in the ranks behind them.
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In your marketing and selling, you need to understand that there are structural discontinuities that you can exploit to your advantage.
FWIW YMMV FAIWWYPFI,
Fjohn
yet another fellow turkey
just bigger and dumber
Reinke Faces Life 