Maintaining your workforce in the face of retirements?
The boomer generation, a force of 41 million workers between the age of 50 and 64, will soon be retiring. Every company needs a plan to not only replace them, but to utilize the wisdom and experience to better train the up and coming gen-X'ers.
Is your company planning for the impact of upcoming retirements? Jim Emerman, executive vice president of Encore.org, recently took some time to reflect on the latest research related to whether companies are planning for an aging workforce. The conclusion he gathered is quite evident in his article titled, “Why Aren’t Firms Planning for an Aging Workforce?”
Emerman reviewed the latest survey by Workplace Trends and Forecasting for the Society of Human Resource Management (SHRM). SHRM had conducted a survey of their members to learn how their organizations were preparing for the potential loss of experienced talent as waves of workers approach retirement. The survey revealed that “few organizations are actually, actively preparing for the effects of this sea change.” In fact, only half of the organizations SHRM surveyed even tracked the percentage of their workforce that is eligible to retire in the next two years. And a mere 20 percent, or one in five of the organizations surveyed, reported that they tried to project the attrition of talent six years or more out into the future. With only about a third of the survey respondents beginning to examine internal policies and management practices to address this change, Emerman wonders if “HR professionals recognize this workforce evolution as a real problem (and) or do anything to address it”
Kerry Hannon, a Next Avenue money and work blogger, recently posted on Forbes.com: “There is a genuine sense of denial afoot.” Emerman theorizes that some of this denial is driven by the economy. “When the economy is growing and older workers see options other than sticking with long-term jobs, companies seem to awaken to the implications of a wave of retirements. When the economy is in the tank, workers of all ages don’t think of leaving.”
Emerman also reviewed the October 2014 report by The Conference Board entitled Not Enough Workers: What Retiring Baby Boomers and the Coming Labor Shortage Mean for Your Company. The report made the case that the retirement of boomers represents an imminent danger to the bottom lines of companies that do not prepare — quickly — for the potential loss of talent. The report warns that companies who do not prepare could see “higher wages and lower profits for the next two decades.”
Emerman concludes, “Whether we like it or not, demography has its own inexorable logic; it doesn’t care about the economic cycle in the least. Savvy, forward-facing companies would be well served to face the emerging demographic reality before it wallops them.”
Managers should treat labor as a tangible asset of any company and recognizing the impact of the “boomer” generation removing itself from the workforce is essential for every company expecting a vibrant future. Michigan State University Extension educators who work with the MSU Product Center can assist current and aspiring entrepreneurs to develop business plans that include workforce needs and the impact of such a trend.