| Consider these stark statistics:
50 percent of all companies recently surveyed say they expect to lose more than half of their senior managers in the next three years (RHR International study)
15 percent say they expect to lose 75 percent or more (RHR International study)
More than 6 out of 10 respondents to an Ernst & Young survey say expected retirements over the next five years will cause a major ‘brain drain’ in at least some business functions.
The best and brightest of businesses are on their way out, and a generational exodus like we haven’t seen in decades will soon be upon us. Companies will see their best and brightest and most experienced head off to golf courses while their businesses are left in a lurch. Complicating matters is the fact that newfangled investment strategies are shaving years off retirement age for many.
Eric Herzog, Ph.D., president of Quest Consulting & Training Corporation, and author of the book Future Leaders, is at the forefront of sounding a clarion call for the business world to wake up and see the problem, before it hits them in the face. It will be too late when they wave goodbye to long-term technical staff and leaders and then try to conduct business bereft of key personnel.
“Some are aware and preparing, but far too many CEO’s and senior leaders are not seeing the handwriting on the wall,” says Herzog. “It’s easy to focus on long term business development, R & D, and innovation, but losing sight of the today’s aging workforce can make achieving those goals problematic.”
Consider Arlene Dohm’s — Economist, Office of Employment Projections, Bureau of Labor Statistics — warning: “As aging baby-boomers begin retiring, the effects on the overall economy and on certain occupations and industries will be substantial, creating a need for younger workers to fill the vacated jobs, many of which require relatively high levels of skill.”
Herzog has worked with many large companies including JP Morgan Chase, COSTCO Wholesale, Hyundai Motor America, and Honeywell, helping them establish foolproof leadership development programs to prepare future leaders, he notes that the massive effect of Baby Boomers leaving applies to skilled workers in all areas of the organization and at all levels.
“While the exodus of senior leaders is certainly critical, many knowledge workers and skilled workers at mid and lower-levels will also be leaving,” Herzog adds. “This presents a dual problem: while junior positions are easier to fill, if companies haven’t prepared some of their talented workers before they move into management positions, companies may have performance issues as well as unfilled positions, which will affect results for years to come.”
One workplace change which may help reduce the impact is that eight in ten Boomers are planning ‘phased retirements.’ They plan to work at least part-time and gradually leave (AARP Segmentation Analysis: Baby Boomers Envision Their Retirement). “Phased retirements will help, if organizations make it possible for retirees to work part time and share jobs” notes Herzog. “But fully preparing younger workers ahead of time to move up the ladder to assume management positions makes it possible to promote from within and not have to fight the battle for new hires.”
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