BOOM Goes Retirement
Steve Nolan has some baby boomer problems at his doorstep. And he’s one of them. The 58-year-old vice-president at Plitron Manufacturing Inc., a Toronto-based maker of transformers, is overseeing the day-to-day operations of a firm whose 55-strong staff has many key employees closing in on retirement, including senior engineers whose skills and experience will be hard to replace. The factory floor has workers getting on in years, too, including one man well into his 70’s who has eschewed retirement to stay in the job he loves. (Globe and Mail Nov 8, 2015) This situation is starting to play out in most North American organizations, in all sectors. We’ve talked about the impact of boomer retirements for the past few years but the reality is now just beginning to hit home. North American organizations do not have 4-7 years to make plans for replacing their baby-boomers. They have 4-7 years to replace approximately half of them. In Canada, there are 9.6 million baby-boomers (born 1946-1964), comprising 46% of the workforce. This percentage is consistent across much of North America. In 2020, just four years from now, the median age of these boomers will be 65 years old, and the massive wave of retirements will be hitting its peak! Not all boomers will retire on schedule, of course. Nevertheless, roughly half of all boomers will have already retired or been eligible for retirement within 4 years. Since it takes at least four years to develop a new generation of leaders, organizations need to be implementing their plans for dealing with the boomer crisis now.
Ask yourself these questions with your organization:
· How many boomers will be eligible for retirement in your organization in the next 4-7 years?
· How many of those retiring boomers are in senior management positions?
· How many of them are in middle management positions?
· How many are in operating positions?
· Do you have a plan to deal with the boomer retirements; are you executing your plan?
You’re probably saying, “Come on, is this really a big deal?”
Loss of skilled talent, particularly leadership talent, will be devastating for many organizations. Retiring leaders are typically the most experienced employees in the business, and they take with them crucial knowledge, expertise and relationships. Turnover will be heavy at the top and throughout organizations, since retiring boomers are working at all levels of organizations.
Here are a few ideas to consider when designing a solution…
First, you will need to design succession plans to support the organizations short, mid and longer-term plans. Let’s pretend the longer term plan includes sales in a new territory. It would be a bad thing to look at the team and suddenly realize that the most experienced salesperson has or will be retiring and there’s no person available to fill his/her vacant spot plus there’s no person available to train the new hire who will be supporting sales development in a new market. So look to the short term and the future when considering knowledge transfer and training strategies. Don’t get caught flat-footed!
Second, most organizations will tell you they’re feeling stretched. Typically, all levels of an organization will tell you they’re doing more with less and have little time to develop people. We hear this often and I believe it’s sometimes true. I also believe that people can achieve remarkable things if they are willing to take an honest (and sometimes painful) look at where time should be spent versus where people are actually spending time. I’ve experienced situations where people are extremely productive without working a silly number of hours because they’re focused and accountable for their results. Try building a thoughtful plan to focus resources on what is most important while holding people accountable for doing their part. This is more challenging than it sounds but will create success.
Third, don’t forget to build leadership development, at all organizational levels, into your plan. It helps to have a consistent approach that builds leadership skills while completing important work/projects that move the organization forward. But there is a solution (here comes some shameless marketing) … Insightworks has the tools and process to support you in making this happen! We call our approach Performance Coaching, a process that combines classroom learning with online learning and tools to support the development of leadership skills using practical assignments that are important to the organization.
Multiple Layers of Value & Results
Leadership development and succession planning, done well, generate multiple layers of results. Design your systems and interventions proactively to generate all of the desired outcomes · In addition to preparing participants for future leadership roles, each leadership development program should generate concrete business results for the organization—each program should pay for itself by generating a solid return on investment. · Development, done properly, enhances the engagement & retention of the employees and this, in turn, enhances employee engagement & retention. · Done well, leadership development should also build communication, teamwork, and relationships across the organization—as leaders learn, work, and innovate together.
HR needs to step up:
One of the biggest challenges you will face is a kind of general anxiety of your current senior leaders. Many of them will be very nervous about sharing leadership responsibility and passing the baton. And even those who are gung ho about it may not have the skills to do it. People worry that the next generation won’t be ready—won’t be able to learn quickly enough. I worry more about the current generation’s readiness and ability to pass the reigns. We need to address both.