It’s estimated that by the year 2020, people 55 and over will make up 25 percent of the workforce in the United States. As the Baby Boomer generation nears retirement, companies face the challenge of preparing for their departure. Unfortunately, a recent survey by the Society for Human Resource Management (SHRM) found that most organizations are unprepared, with just over one-third examining policies and practices to address the demographic change, and 20 percent reporting they had examined their workforce and determined no changes in policies and practices were necessary.
While this is troubling in many industries, it’s particularly alarming in industries like manufacturing that require extensive knowledge, experience and technical skills. As workers retire, finding and training new talent to replace them will become increasingly difficult.
So how can companies plan ahead and be prepared?
Analyze Your Workforce – Make sure you’re evaluating your workforce demographics on an ongoing basis so you have a good idea of how many people are reaching retirement age as well as their functional roles and leadership levels. This will allow you to project the timing of potential retirements as well as staffing needs and costs to replace them.
Increase Training and Cross Training– Make sure you leverage the skills, knowledge and talents of your aging workers. Companies will often let veteran employees at the top of the pay scale go in a cost-cutting effort. However, it’s often at the high cost of losing institutional knowledge. Work ahead to ensure your newer, younger workforce is properly trained and also utilize your close-to-retirement-age workers to cross train and mentor younger, more inexperienced workers.
Review Policies & Develop Succession Plans – Given the large number of aging workers, you’ll want to look at your company’s retirement policies and practices. You may want to consider offering a phased retirement plan that allows interested employees to gradually reduce their work hours over time or a flexible work arrangement. And don’t forget to “build your bench” – succession planning and identifying the next leaders for your company and making sure you train and keep them is crucial.
Increase Recruiting Efforts to Replace Retiring Employees – The number of skilled workers isexpected to fall short of the huge number of job openings that the retiring Baby Boomers will leave vacant. Therefore, it’s crucial that you get smart about recruiting and hire the right employees to fill your empty roles and lead your company into the future. In some instances, you may want to allow overlap time for the new hire to shadow and learn from the retiring worker to foster knowledge transfer. Work with a reputable recruiting firm that has expertise in your industry and can also help you navigate the changing workforce environment.
With a little preparation and planning, the knowledge and expertise of your aging workers won’t walk out the door with them when they retire. And at Horton International – NA, our experts can help you identify, attract and retain the top talent that will successfully lead your organization into the future.