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The aging of the U.S. workforce has been called the "silver tsunami." Ten thousand Baby Boomers turn 65 every day—a trend that began in 2011 and will continue until 2030. Despite their reputation for being workaholics, their average retirement age is 61 to 65, which means that the workplace needs to prepare for a veritable tidal wave of turnover.
Between Baby Boomer retirements and Millennial job-hopping, HR professionals are often left scrambling to curb the damage caused by massive employee exodus.
"These demographic changes will have profound impacts on employers as they enter a 'sellers' market where there are fewer employees with the necessary skills than there are good jobs," said Linda Duxbury, a professor at Sprott School of Business at Carleton University in Ottawa, Ontario, Canada.
It's expected that by 2020, 31 million jobs will become available as Boomers retire, and another 24 million new jobs will be created. However, the population of younger workers with education and skills to replace Boomers isn't large enough or growing fast enough to make up for these departures, according to a Georgetown University report, which predicts a shortfall of 5 million qualified workers.
As companies grapple with how to recruit, retain and develop employees of all ages, strategic human resource management will be critical to their success, said David DeLong, Ph.D., president of Smart Workforce Strategies, a consulting firm in Concord, Mass., and author of Lost Knowledge: Confronting the Threat of an Aging Workforce (Oxford University Press, 2004). He said that organizations facing excessive talent losses should address several pressing questions:
Many traditional industries are facing the daunting prospect of "flash retirements," with large numbers of employees all leaving at once. To stem the tide, some offer phased retirement programs that allow retirement-eligible employees to work reduced schedules or downshift into less stressful roles.
The Work to Retirement program at Mercyhealth System in Janesville, Wis., offers flexible schedules and part-time work as part of the employee benefit program. Similarly, Scripps Health in San Diego allows retiring employees to work part-time schedules while maintaining eligibility for health and other benefits.
Before launching a formal phased retirement program, however, you need a clear understanding of the quality of your older workforce, Duxbury said.
"About 50 percent of Boomers have retired in place. They have lost faith in their employer and aren't always willing to go the extra mile. Their presence is preventing others from moving up," Duxbury said.
She encouraged HR professionals to think strategically about which employees add value and who needs to be eased out the door.
"If you want your skilled and talented Boomers to stay, you have to make it worth their while. Many want to leave because of workload. If you want to keep them, look at work reduction or job sharing," she said.
Even those who can be convinced to postpone retirement will likely have an end date in mind, which makes it incumbent on employers to figure out how to make the best use of these valued employees' remaining time.
"There is little question that many experienced workers will be leaving their jobs in the next decade. And that giant sucking sound you will hear is all the knowledge being drained out of organizations by retirement and other forms of turnover," DeLong said.
Mentoring and coaching are two of the most effective ways for Boomers to transfer their knowledge and expertise to younger, less experienced employees.
"Many Baby Boomers would love to take on coaching and mentoring roles where their whole job is knowledge transfer," Duxbury said.
"Mentors elevate and escalate knowledge transfer, which is useful in shortening a learning curve," added Julie Kantor, president and CEO of Twomentor LLC, a management consulting firm in Bethesda, Md., that helps organizations build mentoring cultures.
At NASA, the best way to transfer tacit—difficult to explain—knowledge to less experienced workers is through two critical steps, said Edward Rogers, Ph.D., chief knowledge officer at the Goddard Space Flight Center in Greenbelt, Md.:
NASA's phased retirement program allows retiring employees to work on a part-time basis in training and mentoring their replacements. The assignment ends when their proteges are able to fulfill their responsibilities. NASA also invites recent retirees back for similar purposes, highlighting how an alumni network can become a treasure trove of mentoring resources and possibilities.
Statistics show that mentoring can have myriad organizational benefits: It reduces turnover, increases job satisfaction, develops employee capabilities and demonstrates to employees that the organization is invested in them.
As an HR professional in health care and sales organizations, Rene Petrin discovered that many companies weren't doing enough to develop their employees. Petrin launched Management Mentors Inc., a consulting company in Waltham, Mass., that helps organizations develop mentoring programs. He views mentoring as a vehicle that enables organizations to implement a strategic game plan around recruitment, retention and professional development. While mentoring often occurs informally in organizations, Petrin sees a qualitative difference when the relationship is structured and formalized.
"Companies need to view human capital differently," Duxbury said. "We are seeing a fundamental shift in the changing nature of the employer-employee relationship as organizations seek to attract and retain good employees in a declining labor market."
Employers that are willing to make an investment in developing their employees are more likely to retain their top talent. In fact, some organizations are using internal career coaches to help employees with career development. The 2016 Conference Board Global Executive Coaching Survey showed that career coaching is now being integrated into performance management and is being used to help employees develop career paths and create a leadership pipeline.
"A principal cause of employee turnover is the lack of attention to career opportunities," said Alex Avery, a member of the HR Leadership Program at GE in the Cincinnati area.
"An individual career coach can offer more attention to individual employee career paths," Avery said, noting that this one-on-one interaction can enhance performance, build commitment and decrease turnover.
Google's Guru-plus employs 350 internal coaches in 60 offices worldwide to address career management, leadership training and employee well-being, among other topics. Coaching sessions range from one to eight sessions per employee and are conducted virtually using Google Hangouts.
Another option is for HR to work with managers to review their employees' job descriptions and, if necessary, redesign those jobs to enrich or enlarge them,
though Duxbury said she is concerned that corporate leaders' overemphasis on operational efficiency can undermine managers.
"The whole American economy runs on doing more with less," Duxbury said. "Younger people don't necessarily want management roles because it's not a good job for work/life balance."
She advises employers to find ways to make managerial jobs more attractive. By hiring more support staff, employers can free up talented employees up for more important management responsibilities.
As Boomers exit the workplace, Millennials will make up roughly half of the U.S. workforce by 2020.
"The problem of managing through major demographic change is more complicated than just coping with retirement," DeLong said. "Younger cohorts bring a different set of values and expectations, which creates new recruiting and retention issues."
The 2016 Deloitte Millennial Survey: Winning Over the Next Generation of Leaders, highlights a pressing challenge: Two-thirds of Millennial survey respondents plan to leave their jobs by 2020. Add in the continuing exodus of Boomers and that could be a disruptive amount of turnover.
The common complaint that Millennials "aren't loyal" misunderstands who they are and what they're looking for. According to the Deloitte report, their top five priorities are:
Insurance company Liberty Mutual wanted to attract—and keep—its Millennial workers. To counter the image among Millennials that insurance companies are stodgy and boring, Liberty Mutual recreated its corporate culture to make it match Millennials' priorities. Among the company's offerings:
Notably, many of the qualities or opportunities that Millennials prize are equally appealing to other generations, including flexible work arrangements, work/life balance and meaningful work.
Arlene S. Hirsch is a career counselor and author based in Chicago.
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