For many years, turning 55 meant the end of a career, a golden handshake, and a long, leisurely retirement. Today, it’s a very different world.
As baby boomers reach and exceed the age of retirement, forward-thinking organizations are highly motivated to keep older workers on board for as long as possible.
Goodbye, golden handshake: hello golden lasso. While many organizations are focused on attracting and retaining Millennials, a glance at today’s workplace reveals that it’s just as important to appeal to older employees.
As the powerful boomer generation ages out of the workplace, knowledge-focused organizations are facing the prospect of a devastating brain drain if they can’t find ways to retain older workers and their expertise.
While Millennials surpassed baby boomers as the largest living generation in the US, boomers still make up a considerable contingent in the workplace: the 2014 Gallup poll placed boomers at 31 percent of the workforce, Gen X at 32 percent, and Millennials at 33 percent.
According to numbers from Pew Research, ten thousand boomers reach the age of retirement (65) every day. It’s a staggering attrition rate, but it would be manageable with enough younger workers to replace them.
Unfortunately, replacing mature talent in the workplace takes time and resources, and not every organization has planned adequately for the impact of this generational shift. In fact, 62% of employers at Fortune 1000 companies believe that future retirements will create labor shortages over the next five years.
The result is being called a boomer brain drain—a net loss of critical knowledge and skills as this generation ages out of the workplace. The impact will hit certain industries and organizational levels harder than others: according to MIT research, the issue will affect knowledge-sensitive industries such as education, finance, engineering, oil and gas, government, and defense manufacturing most heavily.
It will also create a potential vacuum at the leadership level: 56 percent of boomers hold leadership positions, and as they retire, organizations will need a deep bench to replace that leadership talent.
And beyond their advanced skills and experience, retiring boomers will take with them the network of relationships they’ve built over the decades. It takes years—and sometimes decades—to build trust and reciprocity in the business world, and when boomers walk out the door, they take that social equity with them.
The good news is that many boomers have no immediate plans to retire. According to a CareerBuilder survey, more than half of workers age 60+ say they’ll work part- or full-time after reaching the age of retirement.
By creating boomer-friendly work environments and knowledge-transfer systems, organizations can hold onto this valuable demographic longer and ensure that the wealth of experience they’ve accumulated is passed on to the next generation.
The first step is to determine how your organization could be impacted by the impending wave of retirements. Will the effects be largely felt at the leadership level, or are certain management levels or areas of technical expertise also at risk? Conducting a workforce analysis will enable you to plan more effectively, both in terms of retaining existing boomers and developing less experienced workers to assume their roles in the coming years.
Next, take a look at key elements of your organizational culture and employment structure to identify areas that could be made more boomer-friendly:
Flexible schedules
Many organizations prefer a full-time commitment from employees, especially those in key positions. But where schedules are inflexible and only full-time options are available, boomers are less likely to remain on staff. A recent NPR article examined the case of Michelin, where more than 40 percent of the workforce is approaching retirement age.
Michelin is actively encouraging retirees to stay on part time after reaching retirement age, even if it’s only for a limited number of hours each week. This may require an adjustment to the pension plan as well: flexible work options will fail to entice when employees are penalized with a lower pension if they choose to stay on part time instead of moving straight from full-time employment to retirement.
Career latticing
Giving older workers the opportunity to explore new career directions can also create a powerful incentive to stay on after reaching retirement age. A 2011 Metlife Foundation/ Civic Ventures report showed that as many as nine million people between the ages of 44 and 70 in the US had already embarked on “encore careers”—late-career work that’s personally fulfilling and gives them a chance to contribute to something meaningful.
As priorities shift from power and prestige to making a difference and giving back, organizations that support a lattice-style approach to career development—in which employees can make lateral as well as vertical moves—can help boomers transition into new and rewarding roles within the company.
Inclusive culture
There can be a fair amount of antagonism between generations in the workplace, with boomers and Millennials seeing one another as entitled and selfish. But inter-generational workplaces are both necessary and desirable. Every company benefits when youthful enthusiasts and elder statespeople know how to get along and complement one another’s talents.
One way to connect the generations and support the transfer of knowledge is to develop strong mentoring networks. For example, Lockheed Martin created a Critical Skills Management Program, which pairs junior employees with seasoned experts who can enhance their knowledge base and pass on both institutional and industry knowledge.
Similarly, General Motors launched a mentor portal specifically designed to connect younger and older employees in mentee-mentor relationships to preserve knowledge and support continuity.
Some companies are also leveraging enterprise social networks such as Yammer or Socialcast to enable boomers to provide guidance directly to younger workers as well as develop permanent repositories of knowledge that help to mitigate the brain-draining effects of retirement.
For more retention strategies, read “Retain and develop talent with competencies.”
For more leadership strategies, read “Competency-based leadership development.”