Baby Boomer Knowledge Transfer
Effective knowledge transfer and retention will prove to be a vital core competency for companies as their Baby Boomer employees retire.
Among some HR practitioners it is an open question as to whether the eminent retirement of the Baby Boomer generation will lead to a massive labor shortage in the U.S. or if there will instead be a skills shortage and increased unemployment as organizations offshore jobs in search of cheaper skilled workers.
According to the U.S. Bureau of Labor Statistics, the overall labor force will grow 12 percent by 2012. But the percentage of workers aged 55 and older will increase by 49.3 percent over the same period. More than a quarter of the current working U.S. population will reach retirement age by 2010. Although the economic recession will likely delay the decision to retire for many, there is no question that they will retire at some point.
But despite these statistics and the exodus of skills and experience that the retirement of these aging workers will bring with it, many HR professionals in the U.S. question whether this really will result in a labor shortage.
According to the “Future of the U.S. Labor Pool Survey Report” from the Society for Human Resource Management (SHRM), only a quarter of HR professionals believe that the flood of retiring Baby Boomers will be a problem to their organizations, and 43 percent only believe that it has ‘the potential’ to become a problem.
These survey results are alarming, for there is no question that the upcoming demographic shift will present major workforce challenges to U.S. companies.
According to SHRM President, Susan R. Meisinger, “We know there will be millions of Baby Boomers retiring and that some workers now entering the workforce lack core competencies. These are serious HR and workforce issues that could undermine the nation’s global competitiveness. And HR must determine how to meet these challenges,” she said.
Offshoring has been touted as the solution to our domestic talent shortage. The SHRM report suggests that while almost no organizations have made plans to move, 17 percent have outsourced or offshored jobs, with another 17 percent planning to do so in the near future. But the long term viability of this strategy is less clear: wage normalization is happening across the globe, talent flight, and increasing instability and safety concerns in many popular outsourcing locations (like India) are causing companies to re-evaluate.
Other HR professionals see the lack of core competencies from employees now entering the workforce as the key challenge to the future of the workforce. About half of respondents said they are seeing new workers entering the workforce lacking overall professionalism, written communication skills, analytical skills, or business knowledge. A lack of core competencies poses a serious challenge to HR professionals because this issue is closely tied to public and higher education, and HR may be constrained in its ability to address the problem.
Perhaps the biggest issue, according to research conducted by Accenture, is that many U.S. organizations are failing to capture critical knowledge and experience from their older employees who are approaching retirement and few seem able to transfer this valuable knowledge to newer employees.
The survey of more than 500 full-time U.S. workers between 40 and 50 years of age found that nearly half (45 percent) of employers have no formal workforce planning processes and/or tools in place to capture their workplace knowledge. Moreover, a quarter of those surveyed said that their employers will let them retire without any formal transfer of knowledge.
Only one in five said they anticipated an intensive process of knowledge transfer prior to their leaving, while fewer than one in three (28 percent) said they expected to undertake a formal process lasting one or two weeks. For a further 16 percent, the extent of the transfer process would be some form of informal discussion with others in the organization prior to their retirement.
If they don’t act soon, organizations will face a major exodus of institutional knowledge, as their most experienced employees leave the workforce. Companies must undertake workforce development and training initiatives to capture their knowledge and minimize its loss.
As Debra Cohen, Chief Knowledge Officer of SHRM, pointed out: “When the talent and knowledge of retiring workers walks out the door, every organization needs to make sure they have others ready to fill the gaps.”
The research also revealed that few companies take advantage of the experience and expertise of their retired workforce. Only a third of respondents said that their companies ever hire retired employees as contractors so those former employees could come back to the workplace and transfer their knowledge and skills to their replacements.
Companies should take three critical steps to meet the challenge of transferring knowledge from retiring employees:
- First, they must understand the extent of the problem, including the knowledge and skills at risk, and their organization’s ability to tackle it.
- Second, they must develop a strategy to capture and transfer knowledge and core skills from retiring employees and to identify, attract and retain new workers with critical skills.
- Finally, they must manage and measure the progress of the entire effort. The bottom line is that leaders in this arena know that capturing critical workforce knowledge and skills can’t be left to chance.
M Squared Consulting’s core competency is helping our clients when they’re facing critical gaps in knowledge, experience, or bandwidth. Our ability to bring in targeted experts and focus them on delivering engagement results is unparalleled. Part of our process is to ensure complete knowledge transfer at the end of every engagement. Our sister company - Collabrus - also offers clients an innovative solution called the Retiree Re-engagement Program. This tailored approach can simplify the process if you bring back retirees to transfer knowledge, mentor, or train current employees while mitigating independent contractor and worker misclassification risks.
