Baby Boomers Bust
Companies get ready as boomers start leaving the work force
The catchy term many are using to describe the impending exodus of baby boomers from the work force sounds like the title of a science-fiction film: “The Brain Drain.”
But there’s nothing fictional about it. The oldest baby boomers, a group that includes more than 78 million Americans born between 1946 and 1964, began qualifying for early Social Security benefits this year. Some may choose to work beyond the traditional retirement age and others could stay on for financial reasons, but the eventual departure of baby boomers will have a serious impact on corporate America. This might be a particular concern in upper-management ranks, where positions are most likely manned by older, more experienced personnel and a talent pool of capable replacements is thin.
“The issue is simply that our population is getting older and the birth rates aren’t equal to the aging of the population,” says Angelo Kinicki, an Arizona State University management professor, author and consultant. “You’re going to have more people exiting than you will have entering (the work force).”
Despite this demographic shift, recent surveys from Ernst & Young and Monster Worldwide agree that few corporations are properly prepared for the challenges ahead.
“What’s going to happen here is as baby boomers retire, you’re going to have a lot of people who have knowledge that are leaving the work force,” Kinicki adds.
Kinicki says it’s vital to create systems for transferring knowledge from seasoned employees and senior executives down to lower levels through the organization.
“I’d say the more progressive companies are engaging in what we call knowledge-management programs,” Kinicki says.
But, according to a 2007 Monster study titled “Building and Securing an Organizational Brain Trust in an Age of Brain Drain,” few companies have taken such steps.
While trying to determine the level of awareness companies have of the coming brain drain and what they’re doing to prepare for it, Monster found that only 20 percent of firms had a formal strategy in place to manage and preserve organizational knowledge.
Monster concludes that “the absence of such planning leaves a valuable asset exposed to a competitive market. Firms must not only recognize the value of knowledge but actively manage and protect it.”
Kinicki says several companies in Arizona, such as Intel, APS and Honeywell, have taken a proactive approach.
One corporation that has been especially innovative is Avnet Inc., a Phoenix-based Fortune 500 company that is one of the world’s largest distributors of electronic components, computer products and technology services.
Lynn Monkelien, vice president of learning and development, says Avnet is very cognizant of the imminent retirement of baby boomers.
“(We) have started looking at all kinds of ways that we can start to manage this transition period,” she says.
Among those is a multiple-tiered program that uses top-level management to teach classes for those viewed as future leaders.
Consider the Global Organizational Leadership Development, or GOLD, program. It does more than just cover particular subjects. Managers are able to expose students to their own experiences, while studentsget a chance to build relationships with senior leaders, paving the way for future coaching and mentoring.
“I think the real benefit is going to come as we start to replace some of the oldguard with the new guard,” Monkelien says.
The company also places great importance on succession planning, according to Linda Biddle, Avnet’s vice president for talent development. Avnet’s goal is to create a steady flow of people at all levels of the organization ready to take on new roles.
“Avnet is always thinking ahead, trying to predict what things are going to impact our business from a technology standpoint, from a process standpoint and, also, from a people standpoint,” Biddle says. “What we’re trying to do is not be reactionary — we’re trying to be proactive.”