Over the next few years, millions of baby boomers will retire from their jobs. Baby boomers, defined as being born between 1946 and 1964, make up the largest workforce America has ever seen. It’s expected that, by 2020, 31 million jobs will become available as baby boomers retire, and another 24 million new jobs will be created.
As this generation retires, companies across all industries will feel the impact. Although the boomers haven’t left in droves, there has been a steady flow of talent retiring from the workplace. Since the youngest baby boomers are now in their fifties, it is only a matter of time until this generation will be gone, taking their knowledge, skills and experience out of the workforce.
The population of younger workers with skills and education to replace the baby boomers isn’t large enough or growing fast enough to make up for the loss of qualified employees. One study, conducted by Georgetown University, predicts a shortfall of 5 million workers with postsecondary education and training by 2020.
The shortage of college-educated candidates places companies in the position of having to recruit, retain and develop employees of all ages. The ability of companies to manage their human resources strategically will be critical to their success.
Here are four strategies organizations that are facing deep talent losses can use to address their concerns.
1. Encourage some baby boomers to postpone retirement.
Many industries are facing large numbers of employees leaving all at once. Phased retirement programs are one way companies are slowing the loss. Phased retirement programs allow retirement-eligible employees to work reduced schedules or downshift into less stressful positions. Often, boomers want to retire due to workload issues. If you want to keep them, look at work reduction or job-share options.
2. Build a mentoring culture.
Many experienced workers will be leaving the workforce in the next decade, leaving behind a drain of knowledge. Mentoring and coaching are two of the most effective ways for more experienced workers to transfer their knowledge and expertise to younger, less-experienced employees. In some cases, it might make sense to create a new primary job role for baby boomers to transfer knowledge. Working with a mentor can shorten the learning curve of younger employees.
Mentoring can offer a myriad of benefits to the company. It reduces turnover, increases job satisfaction, develops employee capabilities and demonstrates to individuals that the organization is invested in them. While mentoring often occurs informally, there is a qualitative difference when the relationships is structured and formalized.
3. Invest in employee career development.
Many HR professionals are seeing a fundamental shift in the employer-employee relationship as businesses seek to attract and retain talented employees in a declining labor market. Since a principal cause of employee turnover is the lack of attention to career development, programs that address career management, leadership training and employee wellness, can enhance performance, build commitment and decrease turnover.
4. Cultivate millennials.
As baby boomers leave the workplace, millennials will make up roughly half of the workforce by the year 2020. Younger cohorts bring a different set of values and expectations, which requires new recruitment and retention strategies.
According to a survey of millennials conducted in 2016 by Deloitte, the top five priorities of millennials include:
- Work-life balance
- Opportunity to take on leadership roles
- Flexible work-time
- Work with a sense of purpose
- Professional training programs.
Here are seven strategies companies are using to attract and retain millennial workers (and other generations, who often value these same opportunities):
- Paid internships that may lead to a full-time position
- On-boarding and training programs that help workers get “up-to-speed” with the job requirements
- Continuing education, including tuition-reimbursement for graduate school
- Executive and peer mentoring programs
- Opportunities to give back to the community
- Flexible work arrangements that support work-life balance
- Merit-based compensation.
In the future, most businesses will be comprised of a wide-range of employee groups. Your Marsh & McLennan Agency (MMA) representative can help you assess your employee needs and offer benefits tailored to your specific employment market. Contact us here for more information.