The war for talent has recently reached a fever pitch, starting with the Great Resignation back in 2021 and then really heating up with the Great Reshuffle, when roughly half of the workers who quit their jobs made an entire change in occupation.
Now, the talent war is moving into its next phase with what can best be described as the “Great Retirement.” Though it started right around the same time as the Great Resignation, it’s only been picking up pace. In fact, Baby Boomers who haven’t already turned 65 will do so over the course of the next seven years, which will inevitably lead to an uptick in retirement.
How the Retirement of Baby Boomers Could Affect Your Business
For businesses, the loss of Baby Boomers in the workforce will pose significant problems, and not just in terms of labor shortages. By and large, this generation is known for its strong work ethic and job loyalty, with more than 40% of Baby Boomers remaining with their employers for more than 20 years. That’s a lot of institutional knowledge set to walk out the doors. They also come to the job with extensive work experience and often hold leadership roles with diverse backgrounds. If the current Baby Boomer retirement trend continues, employers will need to get serious about developing the next generation of leaders.
Capturing this institutional knowledge is a great first step. It can be invaluable for maintaining efficiency and continuity in a range of operational processes and services. Without a conduit between different generations in the workforce, it just increases the chances that business performance will suffer.
Still, there’s no reason to be pessimistic. These changes in the workforce also present great opportunities. Vacancies in leadership left by retiring Boomers provide the room necessary to promote younger talent (e.g., Gen Xers and Millennials) from within — talent that may bring new energy and perspectives. Besides, the move sets up the next generation for success and puts your business in a much better position for the future.
Preparing for Changes in the Workforce
Preparing for changes in the workforce can be challenging for many organizations, especially when it concerns Baby Boomer retirement trends. Here are the best places to start:
Rethink talent engagement.
As Baby Boomers in the workforce continue to leave the corporate world, younger generations will become a larger part of the talent pool. It’s important to recognize that these workers come with their own unique traits, behaviors, and aspirations. This being the case, the time has come to rethink some of the tactics used to engage talent and look for ways to cater to a multigenerational workforce.
Engage in succession planning.
Certain roles within organizations will be more critical than others, and you’ll want to develop an action plan for who will take on those positions in case someone were to retire or leave. Without a plan in place, you may find yourself with a leadership role that’s difficult to fill, leading to disruptions and instability in management and operations. Invest in succession planning to mitigate these and other risks.
Create knowledge transfer processes.
Though technically part of succession planning, the knowledge transfer process merits its own mention because its absence can lead to skills gaps and a lack of expertise within your organization. And while knowledge transfer can be either formal or informal, it’s better to avoid the latter so that nothing slips through the cracks. If your company is able, institute a process (e.g., coaching or mentorship programs) through which seasoned employees can share their knowledge with younger workers well before their retirement.
Leverage contingent workers.
Sometimes, plans just don’t work out. Perhaps a newly promoted worker hasn’t yet gotten up to speed. Maybe the replacement doesn’t possess the right skills yet. Fortunately, utilizing the contingent workforce can help bridge any gaps you experience. You can even inquire whether a retiree would be open to becoming a contingent worker to provide additional training or take the helm of a project or two on an as-needed basis. A recent survey found that approximately two-thirds of people who retired during the pandemic would be willing to rejoin the workforce. If you’re uncertain of how to handle the process, an employer of record can keep retirees on your “bench,” allowing you to access the knowledge and expertise you need as you need it.
The Baby Boomer retirement trend will deplete your talent pool year after year, removing millions of skilled workers from the workforce. While the talent pool is constantly being refilled, this does nothing to restore the institutional knowledge and expertise that retiring workers take with them.
To protect your organization from this kind of depletion, start reimagining your recruitment efforts, get to work on a succession plan, and bridge any gaps along the way with contingent workers. Otherwise, you risk harming your bottom line.
If you would like more information on this topic, contact Innovative Employee Solutions (IES) today. A member of our team would be more than happy to answer any questions you might have.
Written by: Kara Hertzog, President of Innovative Employee Solutions
