But They Can't Leave!!

BusinessManagement

  • Author Jill Russell
  • Published April 4, 2011
  • Word count 1,059

Part IV of TPO’s IV Part Series on Succession Planning!

SERIOUSNESS OF THE PROBLEM

In our first article of this series, we talked about how the current climate makes excellent succession planning a "must" rather than a "nice to have" today. The Hay Group McClellan Center for Research and Innovation recently looked at this subject and determined that there are insufficient numbers of younger workers to fill the roles currently held by retiring Matures and Baby Boomers.

Although the current economy has resulted in many "boomers" who planned to retire sooner rather than later re-thinking their timing, the fact remains that: "An estimated 75 million workers will retire in the U.S. in the next 5 to 10 years, including 50% of CEOs from major corporations," said Mary Fontaine, Vice President and General Manager of Hay Group's McClelland Center for Research and Innovation. "There's an urgent need for leadership with only 45 million younger workers available to fill roles. Some sectors and markets are already battling for talent and leaders. Within a few years it will be a full-scale war. Those companies that are not already preparing are putting their futures at risk."

DIFFERENT EXPECTATIONS

While benefits for retirees have been slowly eroding over the past few years, many employers are beginning to plan ways to assist those workers approaching retirement to deal with the issues. Planning exit strategies that meet the needs of the Matures and Baby Boomers is a good business move because it both sends a message to those not yet at the retirement stage that the organization values the contribution of employees at every stage, and is a way to find opportunities to avoid the "brain drain" through retirement by offering options for continuing with the organization.

The concern about retiree’s benefits was recently discussed on a global level by Constance Morella, Ambassador to the Organization for Economic Cooperation and Development (OECD). She pointed out that governments have been forced to restructure governmental retirement wage programs by raising the retirement age and other steps to reduce the very large deficits that would be expected otherwise. The crisis is not only because of the large numbers of retirees possible in the next 5-10 years, but also the much increased potential life span of those retirees. The average pension promise in the 16 OECD countries studied was cut by 22%. For women, the reduction was 25%.

This situation makes it possible for organizations to hold on to some of its valuable knowledge longer than they have in the past. Baby Boomers are a generation that "lives to work" and many are inclined to continue to work during retirement years if they can combine that with the lifestyle they have always anticipated during retirement.

The Associated Press reports that retirement communities are beginning to see evidence of a division between older residents and so-called "younger-olders." Those on the leading edge of the Baby Boom who are choosing to join these communities are demanding more comfortable accommodations and amenities than those who are twenty-or-more years their senior. Products of the Great Depression, those in their 80’s are used to a more Spartan lifestyle. Community managers report that squabbles are arising over everything from food and dining room attire to monthly fees for computer access and spa services.

A similar difference exists in the attitude towards work. Baby Boomers want to continue to fill a place in the corporate culture.

HOW TO MAKE IT HAPPEN

Corporations who have stepped up in the early stages of this crisis have begun to revamp benefits offerings to develop plans that work for the employees it wants to retain past traditional retirement age. There are several ways to adapt programs. A few ideas are captured below:

Offer health care benefits to part-time Returnees – Traditionally, many organizations have offered healthcare benefits only to full time employees. Healthcare is a serious consideration for employees who are over the traditional retirement age. Providing healthcare benefits for part time work is likely to be a positive move for leaders the company wishes to keep on in some manner.

Provide more leave time – The next generation of retirees has watched from afar as retirees enjoyed more travel, golf, fishing, volunteering and other recreational and social activities. This generation has been the "workaholic" generation where pleasure has been postponed. It has also been a group that didn’t stay long at organizations and so may not have the tenure to get the highest level of leave provided. Allowing more leave time to this group is work enough to some to make the difference in retiring and staying with the organization.

Pay a higher portion of health care benefits – Offsetting the cost of retirement benefits against the health care that are relevant and valuable to the older group in the organization is another way to provide what is of interest to the employees. Employers MUST find a way to retain in order to continue to be competitive.

In addition to making benefits more available and affordable, there are other rewards that are attractive to this group. Corporate leaders have long known that the most important part of learning how to be a leader is having the right mentor early in a career. Mentoring younger leaders is an area where they already have some expertise. Using a formal system to manage a mentoring program to develop organizational talent is motivational for both the continuing employee and for new employees who see this as a development tool that will allow them to move up in the organization.

Providing consulting opportunities is another way to make use of the talent that may have already left the organization as a full time resource. Bringing back in the talent that made a program happen on an "as needed" basis allows organizations to employ fewer full time people for the program and utilize the additional intellectual talent only when needed.

CONCLUSION

As the retirement age for tens of thousands of top leadership approaches, organizations must find a way to fill the gaps left by those who are leaving. Creativity and changing ways of looking at how employees are defined and rewarded provide the keys to surviving the talent drain expected in the next five to ten years.

TPO can help you develop a complete Succession Plan program for your organization or any portion of it. Contact us to begin to plan for y

Jill Russell, SPHR, is the Principal and Co-Founder of TPO The HR Experts http://www.tpohr.com. With over 20 years of increasingly broad HR Management http://www.tpohr.com/services/tpo_complete_hr experience, Jill has trained and coached hundreds of supervisors, managers, and executives in basic and complex employment skills and techniques to decrease legal exposure, and increase employee relations and productivity.

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