As the corporate world braces for the first wave of baby boomers to begin exiting the workforce, companies are stepping up methods for retaining mature workers' vital skills and knowledge.
It's now a matter of time. The baby boomer generation -- comprised of nearly 83 million people, according to the U.S. Census Bureau, and getting ever-longer in the tooth -- will soon begin filtering out of the workforce. The threat that has long been on the horizon is now knocking at the door: Boomers will be leaving behind the jobs -- including many C-level posts -- they've held for years, taking with them the wealth of experience and knowledge they have accrued.
Charged with filling those positions, companies will draw on a pool of workers that, at least in terms of numbers, doesn't seem capable of replenishing the ranks. The U.S. Bureau of Labor Statistics projects a labor force of 162 million in 2012, and anticipates the economy will require 165 million jobs. Those figures -- accounting for factors such as outsourcing and the hiring of newly arriving immigrants -- don't necessarily equal a shortage of 3 million workers, but do pose questions for many U.S. companies.
On the whole, "employers simply can't afford to see this generation retire en masse," says Roselyn Feinsod, principal at Towers Perrin HR Services in Stamford, Conn., without witnessing significant effects on productivity, the ability to serve customers and, ultimately, the bottom line.
The good news for business is that, despite the fear engendered by a potential mass exodus of boomers, and the ensuing fallout, there are signs that most workers nearing retirement age aren't going anywhere just yet. According to a recent survey by AARP, a Washington-based nonprofit advocacy group for older adults, 79 percent of baby boomers plan on working past age 65. In addition, a poll of 845 professionals, conducted by Woodcliff Lake, N.J.-based Lee Hecht Harrison, asked participants their plans upon reaching traditional retirement age. Just 9 percent of them indicated they intend to stop working entirely.
While it may not be so easy to determine when the majority of boomers will be leaving, the fact remains that finding ways to hang onto their skills and capture their knowledge is increasingly important.
Some companies have taken pre-emptive measures to fill the potential void left by unprecedented numbers of retiring workers. Armonk, N.Y.-based IBM Corp., for example, has started a consulting service that, through data and analytics, helps clients "profile" their workforces based on jobs, competencies and skills within their organizations; pinpoint what areas they may be most at-risk of losing talent to retirement; and determine what actions to take in response.
In light of the impending phase-out, many organizations are beginning to learn the value of offering alternative work arrangements, increased development opportunities, flexible schedules, phased-retirement programs and competitive retirement benefits in order to better accommodate them, and to begin the process of transferring their knowledge to the next generation poised to assume their critical roles.
To understand mature workers' needs and maximize their talents, says Marcie Pitt-Catsouphes, co-director of the Center on Aging & Work/Workplace Flexibility at Boston College, a few myths about aging workers must be dispelled (see sidebar).
"Aging does not mean what it meant 30 years ago," Pitt-Catsouphes says. "A person who is 55 or 60 today is likely to not only have a different current life experience and health status, but [his or her] past experiences are different.
"[Boomers] became teen-agers when an entire country was reacting to a youth culture. They hit college age, and the country was reflecting on important issues, such as Vietnam and the civil rights movement.
"This is a group that, at every life stage, has been able to take a step back and say, 'Maybe there's a different way to do this.' " Hence, she says, the assumption shouldn't be made that baby boomers will take a "traditional" approach to retirement.
Nor should many older workers' requests for flexible schedules or reduced hours be mistaken for signs they are slowly switching off.
"Oftentimes," Pitt-Catsouphes says, "there's a sense [among employers] that workers cross an age threshold and, all of a sudden, they start disengaging." That, she says, is a misconception.
According to a survey conducted by Stamford, Conn.-based Towers Perrin, employees 55 and older were found to be more engaged and committed to their work than their younger colleagues. Workers in the 55-plus age group rated an "average motivation score" of 78 on a 100-point scale, ahead of those in younger age groups.
Each generation may differ in its approach and attitude toward work. But, individuals at all career stages, says Pitt-Catsouphes, crave flexibility and some degree of autonomy. Those nearing retirement just may have different reasons for seeking increased independence; caring for an elderly parent or getting more involved in community activities, for example.
Thus, she says, employers must make the distinction between older employees' desires for flexibility and their willingness to continue carrying their share of the load.
Rather than cut back on their responsibilities, she says, the majority of mature workers may simply wish to "work in a different way," in an atmosphere they feel helps them excel--in all facets of their lives.
To foster that kind of environment, Pitt-Catsouphes says, a good way for supervisors to start is by simply initiating conversations with older employees about what they feel they need to be successful.
For example, an older worker may assume that training and development opportunities within the company are reserved for their younger counterparts "on the way up." A simple conversation, she says, may go a long way toward assuring mature workers their contributions are still very much valued, and that such opportunities are open to workers throughout their careers.
"The way managers communicate," Pitt-Catsouphes says, "can make a difference."
As Pitt-Catsouphes points out, boomers seek many of the same things from their jobs--flexibility, independence, recognition--as younger generations.
At Nutley, N.J.-based Roche -- named in 2005 to AARP's "Best Employers for Workers Over 50" list for the third consecutive year -- the pharmaceutical company doesn't have "a targeted retention program for mature workers," says Brad Smith, director of staffing and diversity. "A retention program should be for everyone. Mature workers want the same things as other workers."
But, Smith says, Roche does have a "strong benefits program as it relates to mature workers." He points to a long-standing flex-time program used by many mature workers, a 401(k) plan with a company match -- when an employee enrolls, the company contributes 50 cents for every $1 of the first 6 percent of an employee's base pay -- and a defined-benefit pension plan as attractive offerings for current and potential Roche employees.
A reality of the pharmaceutical world, Smith says, is that many jobs require specific experience that can be gained only within the industry, which leads to companies often plucking skilled, seasoned employees from its competitors.
To attract and hold onto the talent it needs to thrive, Smith says, the organization starts by taking care of its current employees.
The culture and benefits package the organization has to offer, Smith says, makes employees want to stick around. Forty-five percent of its workforce, he says, has been with the company more than 10 years, and 22 percent have at least 20 years of service.
Smith also cites a "very active diversity program" as a key driver of retention. In addition to offering diversity-training and supplier-diversity programs, Smith says, the company supports numerous diversity projects and organizations in its community. Staffers in Roche's diversity department also manage a diversity Web site with resources and information for employees, and assist three company-sponsored affinity groups for African-Americans, women and gay, lesbian, bi-sexual and transgender individuals.
The demographics of Roche's workforce, he says, also aid the organization in attracting older workers with the requisite experience. "Potential employees looking around Roche are going to see a very diverse workforce," says Smith, "and they're going to see many mature workers."
Deere & Co. joined Roche on AARP's 2005 list, and figures to "see some impact" from the first batch of retiring boomers, says Rick McAnally, director of global diversity and talent management. More than half of Deere's salaried employees, he says, have five years or less of service with the company.
That fact does "create a knowledge-transfer issue," he says, one that has made retaining senior employees and their wisdom a top priority for the Moline, Ill.-based maker of farm equipment. The corporate HR organization, working with the company's business leaders, "has done significant workforce planning for several years," he says, including analyzing the demographics of its workforce to determine where the company may be at risk of losing talent if it doesn't take a more proactive hiring approach.
Like Roche, the organization does not gear benefits or work arrangements toward any particular group of workers. But, McAnally says, it does offer options that may be especially appealing to those looking to "move their work around," including mature workers seeking more freedom in how and when they work.
Programs the organization has implemented include flexible scheduling, job-sharing and telecommuting options, as well as a paid-time-off policy McAnally describes as "pretty liberal."
The policy, McAnally says, allows Deere's U.S. salaried employees to take time off with pay for "personal and compelling" reasons, and does not set limits on its use "since each employee's situation is unique." To date, he says, employees have been fair and judicious in their use of this time, and have shown great respect in their use of the benefit.
Deere's leadership is also educated on age-related issues in the workplace. In 2004, the company, using in-house counsel, developed a course on avoiding age discrimination. The course, delivered in both classroom and online formats, is required for all supervisors and managers.
One of the primary goals of instituting such programs, McAnally says, is to create a culture in which continuing career development is strongly encouraged.
"We really do want to develop people until the day they retire."
Pass It On
Just when that day will come for the majority of baby boomers is tough to predict, says Carleen MacKay, practice leader for third careers at Ft. Lauderdale, Fla.-headquartered Spherion Corp.
"Very few people are retiring in a traditional sense," says MacKay, co-author of Boom or Bust! New Career Strategies in a New America. Financial issues, the need to stay mentally active, passion for their jobs and other factors are fueling workers' desires to stay on the job; gradually transitioning into full retirement.
In fact, in a survey of 1,000 workers and retirees at or near retirement age, conducted by Washington-based Watson Wyatt Worldwide, 33 percent of respondents said they would delay full retirement if their organization offered a phased-retirement program.
MacKay recommends voluntary phased-retirement plans to keep mature workers active and engaged, and to allow organizations "the time to transfer knowledge."
Retaining that knowledge is a key issue, she says, given the sheer number of senior positions held by employees in this particular age group, and the vast amount of intellectual property companies stand to lose if not prepared for their departures.
Although few companies were willing to discuss their specific methods of knowledge transfer, experts say some of the latest approaches may include creating knowledge networks within organizations, videotaping "key knowledge" workers on the job and redesigning the jobs of employees near retirement in a way that allows them to pass on knowledge while staying on in a capacity that makes sense for the company as well.
At the UCLA Anderson School of Business, the college has tapped into technology to gather and preserve knowledge. UCLA relies on Mediasite, a tool developed by Sonic Foundry, a Madison, Wis.-based provider of media technology, designed to record, manage and view rich media content.
The university, says Manuel Burgos, senior manager at the school, records information -- classroom lectures, guest speaker presentations, etc. -- for archiving purposes and to capture knowledge shared in the school's classrooms, among other purposes. The tool enables professors to have less of a "physical presence" on campus if they so desire, and provides their successors access to their wealth of information.
The corporate sector, Pitt-Catsouphes says, could embrace technology for the purposes of knowledge transfer as well. Based on her experience, she says, many companies would likely be "very receptive to technological strategies for training and education," adding that such an approach allows employees to review materials and interact with one another at times convenient to them.
To groom the next wave of leaders, many companies have taken, or will take, what Pitt-Catsouphes calls a "traditional approach, encouraging older workers to be involved in some kind of mentoring" as they ease into retirement.
Midland, Mich.-based Dow Chemical Co., for instance, uses a formal mentoring program in which mentors are assigned a small group of protégés, with whom they meet regularly to share insights and experiences.
Los Angeles-headquartered Northrop Grumman has established a number of "communities of practice" to facilitate knowledge sharing, via in-person meetings and online communication.
At Deere & Co., employees have formed "common interest" groups within the organization, McAnally says, where colleagues discuss business issues and senior employees can dole out wisdom gleaned from their past experiences.
Such meetings, he says, "really get knowledge out there among the groups that need it," providing a sounding board for workers and allowing younger employees the chance to hear how their more seasoned peers worked their way through various crises.
Once Deere employees do ultimately retire, McAnally says, the company frequently brings them back to work on temporary assignments and/or as contractors on a part-time basis. Younger workers receive valuable mentoring, he says, and the company leverages the expertise of its most knowledgeable employees, who are, in turn, able to contribute to the organization on their time and on their terms.
Most retirement-age workers, MacKay says, want -- or need -- to continue contributing, but may ask for certain accommodations to do so.
Granting mature workers' requests -- adaptable schedules, shorter work weeks, telecommuting options, consultant and contractor work, etc. -- helps employers hold onto them for a few more years so knowledge transfers can be completed, says MacKay.
Finding ways to use the considerable abilities of this well-trained, highly-skilled and battle-tested segment of the workforce "enables companies to keep talent for less cost," she says, "and it keeps [mature] employees engaged and productive.
"There's just no downside to employees working longer in some capacity."