As I travel around the country conducting leadership coaching, I frequently get posed interesting questions. I would like to share one of those questions and my response:
“How do we retain the intellectual capital that resides in our baby boomer work force? I’ve heard that boomers are already leaving the workforce en masse. Is this trend for real?”
Yes, it’s true that there is a growing trend of early retirement for employees within the age ranges of fifty to sixty–five (the normal retirement age). The good news is that it creates opportunities of advancement and greater responsibility for the next generation of employees. The not so good news is the loss of training and knowledge invested in these employees, exiting prematurely. There are a number of recent studies supporting this ominous trend.
This can be expensive for your firm! If you experience a 25% annual turnover rate, in four years you lose 100% of your knowledge base. And the main reason customers stop doing business with a service firm is the frequency of employee turnover. Even more costly is that you have invested twenty-five years in an employee, and when he or she leaves, it will take three years to fully replace the intellectual capital lost – much longer than the typical two weeks we allow to “train the replacement.”
There are several things you can do now in order to manage the retention of critical knowledge during this employee exodus. Many of these, if part of your corporate culture, will prevent key employees from leaving or entertaining offers.
- Create a succession plan for every one of your key employees. Start with the assumption that they will be gone within two years from today (hopefully this won’t happen, but you never know).
- Make sure you have your key processes documented so that the work gets done no matter who does the job.
- Turn your experienced personnel into trainers and mentors for your less experienced employees.
- Add to your employee recognition program by directing rewards towards those long-term employees who are among your most valuable assets in terms of intellectual capital and knowledge.
- Move towards a team culture that partners your more experienced personnel with your less experienced personnel. Make sure this goes beyond pure cross-training. The best teams are cross functional—those that cross departmental lines or specialty areas.
- Change your policies and job descriptions so that if a valuable employee wants to work less than full time, you have that option available. Many boomers are tired of working the 60 hour-a-week pace and are willing to trade income for time off.
- Finally, if you don’t have one, institute a sabbatical program based on tenure. Allow employees to take from three to twelve months off to pursue other interests. Then welcome them back with open arms. A recent study showed that companies with sabbatical programs in their corporate culture had an astounding 97% retention rate.
The Baby Boomer retirement crisis will soon have a huge negative impact on business, government, and education in the United States. But the problems created by these departing employees need to serve as a wakeup call for companies like yours that don’t have a good plan for managing turnover.
Employee turnover is a fact of life for business, and successful businesses need a process for knowledge retention and smooth transitions as a cultural norm.