M Squared helps clients attain market leadership through the intelligent use of the high-end flexible workforce.  Consequently, we closely track the economic and social factors that affect working professionals.  And in the current economy, “baby boomers” (those persons born between 1944 and 1964), face particular challenges.

Prior to the economic slowdown, companies were focused on preparing for the exit of baby boomers from the workforce. While many boomers are staying on the job longer to compensate for their depleted retirement accounts, they will retire sooner or later, and talent managers need to take both those factors into account.

“You probably will see less of an impact as far as the retirement of the baby boomers than [was] originally thought,” said John H. Hudson, CEO and owner of The Growth Coach of Ventura County and author of Choosing the Right Path: Insights on the Changing Face of America’s Workforce. “I’ve talked to a number of people, and essentially they aren’t sure what they want to do in this next chapter of their lives, but they really don’t want to continue to do what they’re doing.

“The problem is if they are not able to leave the workforce on their own terms, organizations are going to have to deal with a lot of older workers who are there and don’t want to be, but are sort of held captive because of their economic situation.”

In order to re-engage boomers who were originally planning on retiring soon, Hudson suggested providing them with more free time.

“Many organizations are going more to telecommuting, part time [and] those sorts of situations - allowing people to have more free time but remain engaged and not have that brain drain occur in terms of people just walking away from the workplace altogether,” he said. “Organizations are going to have to think about how [to] keep that level of talent, history and information in the organization in creative ways, so that it’s not the same situation where [workers have] to do a 9 to 5 every day as they have been for the last 30 or 40 years of their lives.”

In addition to meeting the needs of boomers, companies also must ensure they continue to prepare for the coming boomer retirements.

“The first thing companies must do is understand the magnitude of the problem, including the knowledge and skills at risk - and it’s going to be different for different organizations,” he said.

“Secondly, they’re going to have to develop a strategy to capture and transfer knowledge and core skills from these retiring employees and to identify and retain new workers with those critical skills, either internally or externally, to fill those gaps.

“Third, they’re going to have to manage and measure the progress of the entire effort. They have to have metrics to measure how well they’re doing because capturing critical workforce knowledge and skills can’t be left to chance.”

Hudson said using soon-to-be retirees as trainers and coaches and having them assist in the identification and mapping of key job competencies would be good for both the organization and the boomers.

“If organizations allow [boomers] to walk out the door, that loss of experience and skill will drop straight to the bottom line in terms of lost productivity,” Hudson said. “That’s how organizations remain viable - the experience base and the knowledge base of how things get done - if that walks out the door, we start to lose a lot.”

Knowledge retention, knowledge transfer, and the intelligent use of talent are issues that we are passionate about at M Squared.  We remain focused on providing our clients with innovative, flexible consulting solutions delivered through the skills of our people and the abundant expertise that resides within our consultant network.

The Dow Jones Industrial Average rises above 10,000. Warren Buffett says that the economy has “plateaued at the bottom”. The rate of job cuts abates, at least temporarily. Reasons for hope for U.S. businesses and consumers perhaps, but what may put a damper on the recovery parade is the phenomenon of knowledge workers voluntarily leaving the States to return to their home countries.

A recent essay by Vivek Wadhwa, a Visiting Scholar at UC-Berkeley and a Senior Research Associate at Harvard Law School, brings this critical issue to light. In “Beware The Reverse Brain Drain to India and China”, Wadhwa contends that Indian and Chinese professionals are returning to their homelands by the thousands. What this foreshadows for the skilled labor force in the United States remains to be seen, and this is a trend that M Squared Consulting is following closely.

(Excerpted from the full article.*)

I spent Columbus Day in Sunnyvale, fittingly, meeting with a roomful of new arrivals. Well, relatively new. They were Indians living in Silicon Valley. The event was organized by the Think India Foundation, a think-tank that seeks to solve problems which Indians face. When introducing the topic of skilled immigration, the discussion moderator, Sand Hill Group founder M.R. Rangaswami asked the obvious question. How many planned to return to India? I was shocked to see more than three-quarters of the audience raise their hands.

Why would such talented people voluntarily leave Silicon Valley, a place that remains the hottest hotbed of technology innovation on Earth? Or to leave other promising locales such as New York City, Boston and the Research Triangle area of North Carolina? My team of researchers at Duke, Harvard and Berkeley polled 1203 returnees to India and China during the second half of 2008 to find answers to exactly this question. What we found should concern even the most boisterous Silicon Valley boosters.

What propelled them to return home? Some 84% of the Chinese and 69% of the Indians cited professional opportunities. And while they make less money in absolute terms at home, most said their salaries brought a “better quality of life” than what they had in the U.S. (There was also some reverse culture shock—complaints about congestion in India, say, and pollution in China.) When it came to social factors, 67% of the Chinese and 80% of the Indians cited better “family values” at home. Ability to care for aging parents was also cited, and this may be a hidden visa factor: it’s much harder to bring parents and other family members over to the U.S. than in the past. For the vast majority of returnees, a longing for family and friends was also a crucial element.

Many students wanted to stay for a few years after graduation if given a choice—58% of Indians, 54% of Chinese, and 40% of Europeans. But they see the future being brighter back home. Only 7% of Chinese students, 9% of European students, and 25% of Indian students believe that the best days of the U.S. economy lie ahead. Conversely, 74% of Chinese students and 86% of Indian students believe that the best days for their home country’s economy lie ahead.

To some degree, these responses reflected the moribund U.S. economy and the rough job prospects facing students. With U.S. unemployment at 10%, who cares if we lose the next generation of geeks? There won’t be jobs for them for years, anyway, until the U.S. job market recovers. And sure, I know the xenophobes are going to cheer my findings. They believe that foreign workers take American jobs away.

But a growing body of evidence indicates that skilled foreign immigrants create jobs for Americans and boost our national competitiveness. More than 52% of Silicon Valley’s startups during the recent tech boom were started by foreign-born entrepreneurs. Foreign-national researchers have contributed to more than 25% of our global patents, developed some of our break-through technologies, and they helped make Silicon Valley the world’s leading tech center. Foreign-born workers comprise almost a quarter of all the U.S. science and engineering workforce and 47% of science and engineering workers who have PhDs. It is very possible that some of the smart Indians who sat in the room with me holding their hand up on Columbus Day will start the next Google or Apple. Many of them will build companies which employ thousands. But the jobs will be in Hyderbad or Pune, not Silicon Valley.

*Read the complete article at http://www.techcrunch.com/2009/10/17/beware-the-reverse-brain-drain-to-india-and-china/

I recently came across two interesting data points which provide some important clues to what the emerging, post-recession, marketplace for labor might look like.

These data points have extra significance because in recent weeks we’ve seen an increase in consulting opportunities across all our practice areas, and we’ve also begun to notice a tightening of the knowledge worker labor force.

You might ask, how can it be that we’re still hearing about the recession and unemployment almost every night in the news, yet you’re saying there is both business opportunity and a lack of talent in the market?!

Here’s my explanation.

First of all, unemployment statistics are a lagging indicator. The rate of unemployment in the market will peak long before the government agencies report it. A much more reliable indicator of labor market trends is Gross Domestic Product (GDP). When it grows, the labor market will grow.

Second, unemployment for those with a college degree or higher (i.e. the knowledge workers that M Squared Consulting depends on to deliver results for clients) remains at near historic lows. The reality is that many members of the knowledge workforce have delayed their retirement. Once we begin the post-recession economic cycle we will see an increasing number of Baby Boomers (the most educated and experienced component of the current labor marketplace) begin to retire from the workforce. I predict this dynamic will cause a renewed war for talent.

August 2009 ExecuNet Recruiter Confidence Poll

Executive hiring by healthcare companies is expected to set the pace for management recruitment across all industries now through the end of 2009, according to ExecuNet’s latest Recruiter Confidence Poll. The survey found that nearly 150 responding executive search consultants anticipate seeing the most executive hiring in the healthcare space, followed by the clean/green technology sector, energy/utilities, and the life sciences market, including companies in the pharmaceutical, biotech and medical sectors. Senior management hiring in the publishing and media/advertising/entertainment industries is expected to be the weakest, extending a longstanding trend line.

“With the economy showing signs of stabilization, corporations are beginning to strategically upgrade their leadership teams and fill positions that were put on hold during the downturn,” says Mark Anderson, President and Chief Economist of ExecuNet. “In light of the deep cuts many companies made during the past eighteen months, the pace of job growth during the year ahead could be stronger than expected in many industries.”

In the poll a representative sample of executive recruiters are asked what industry they anticipate yielding the highest growth of management hiring in the next six months. Here are the top ten responses from the poll:

• Healthcare = 13.8%
• Clean/Green Technology = 10.6%
• Energy/Utilities = 9.1%
• Life Sciences (pharma, biotech, medical) = 8.4%
• Environmental Products and Services = 7.2%
• High Technology = 6.3%
• Tie-Business Services = 5.3%
• Tie-Government/Nonprofit = 5.3%
• Defense/Aerospace = 5.2%
• Financial Services = 5.1%

Source: ExecuNet Recruiter Confidence Poll 8/09

The Aging of the American Workforce - Pew Research Center

The aging of the American workforce has accelerated during this recession, both because older workers have stayed in the labor force longer and younger adults are staying out of it longer, according to a recent study by the Pew Research Center.

One government estimate forecasts that 93 percent of the growth in the U.S. labor force through 2016 will be among individuals ages 55 and older.

By a ratio of nearly two-to-one, survey respondents said they would prefer a job that offers better security (59 percent) over one that offers higher pay (33 percent) but less stability.

Yet even in the face of widespread layoffs, pay freezes and involuntary furloughs, nine-in-ten employed adults say they are either completely (30 percent) or mostly (60 percent) satisfied with their job. In recent decades, the Pew study reports, levels of job satisfaction have tended to remain stable through good times and bad.

As it turns out, older workers are the happiest workers. Some 54 percent of workers ages 65 and older say they are “completely satisfied” with their job, compared with just 29 percent of younger workers. That’s because a much higher percentage of older workers is working not because they need to, but rather, because they want to.

While we are in the midst of a recession it might seem inappropriate to bring up the war for talent. But the market reality is this: even with overall unemployment rising, employers are still challenged to find the talent they need.

As many companies are discovering, while this labor market might be flooded with job seekers, that doesn’t necessarily mean they have the needed talent. In particular, companies can’t always find people with the exact skills and experience they need, when and where they need them. Today, it’s also not uncommon to hear executives express frustration about under-skilled, inexperienced, unproductive, and even unreliable employees who will quickly jump ship for another opportunity.

As you might expect from the generation that has had such a significant impact on our society throughout their lives, the Baby Boomers will also dominate this talent market discussion for the next decade.

How can this be? Aren’t the Boomers supposed to be retiring?

Well, let’s start with the fact that they are the single largest component of the U.S. workforce, so their effect is huge. Then, layer in the fact that with the economic downturn many leading-edge Boomers who under normal circumstances might now be retired (or nearing so) must continue working in order to replenish their battered retirement savings. Finally, we must recognize that the next generation (Gen X) is half the size of the Boomers and quite simply has not had enough time in the workforce to build up the same level of knowledge and experience.

The New War for Talent

Baby Boomers were born between 1946 and 1964, which means that today they are somewhere between the ages of 44 and 63. Many worked their way up the corporate ladder - they are happy to continue working in their area of expertise, where their wisdom and experience are valued. Others are choosing to embark on second, or “boomerang” careers.

The fact is, with their decimated retirement accounts many boomers can’t afford to retire. Others recognize that in addition to the monetary rewards they receive there are many psychic rewards from their careers, so they have no plans to ever retire.

The US Bureau of Labor Statistics (BLS) reports that by 2010, more than 51% of the workforce is expected to be 40 or older, a 33% increase since 1980. The number of workers aged 55 and older will grow from 13% of the labor force in 2000 to 20% in 2020.

All of this is good news for employers because most companies are operating much leaner than ever before, and they need to cost-effectively find the most experienced, skilled people they can in order to achieve their objectives.

How to Leverage the Boomers

Now is the perfect time for organizations to assess their workforce. Strategic business owners and executives should evaluate their workforce demographics and the key positions within their organizations in order to identify current and projected talent gaps. It’s also time to develop programs that will strengthen knowledge retention and sharing throughout the company in preparation for the inevitable “brain-drain” that will occur when the Boomers exit the workforce.

How can employers retain the key knowledge and information that is resident in their workforce?

First, they must recognize who has the knowledge. If they want to hold onto Boomers they must adapt to their needs. Many forward thinking organizations are developing policies and programs geared towards recruiting, retaining, and training older workers. Key options that will help attract and retain these mature workers include flexible work arrangements (such as adjustable schedules and job sharing) and should also part-time or contingent employment options. Fortunately these types of work arrangements require lots of self-discipline and maturity, which the Boomers have in abundance!

Next, companies should institute mentoring programs to help train the next generation of knowledge workers and business leaders. Companies concerned about retaining institutional knowledge can’t afford to have their older employees walk out the door with a career worth of expertise and experience.

Finally, employers must have an honest dialogue with their seasoned team members to help them plan for the next phase of their careers. Companies that demonstrate loyalty towards their older employees by offering flexible employment options, will be rewarded with loyalty in return.

Conclusion - Experience Counts

Because of their proven talent, Baby Boomers will be in high demand for the balance of this decade and beyond. They add value not only to employers’ bottom lines but also to the long-term health of our workforce and our economy.

It is a phenomenon we see every day at M Squared Consulting. When clients want experienced business professionals, those seasoned experts who have translated their knowledge and insight into consulting expertise, they call us. Our talent-on-demand business model is an enabler for companies who need seasoned experts, focused on delivering results. We also enable seasoned experts, who no longer want a full-time role, to bring their expertise to market as consultants.

In the final analysis this whole discussion can be distilled down to two words: Experience counts!

It should come as no surprise that many “older” workers are delaying their exit from the workforce. The recession has ravaged most retirement accounts, a fact that is most damaging for those nearest to retirement: the Baby Boomers.

A recent poll by Watson Wyatt, a global HR consulting firm, finds that 44 percent of those aged 50 and over plan to delay their retirement, compared with only 25 percent of those under 40. Although the average planned retirement age for all employees is 65 years old, half of those aged 50 or more plan to retire at age 66 or later.

“The economic crisis has affected many worker’s retirement plans and nest eggs, but those nearest to retirement have been especially hard hit,” says David Speier, senior retirement consultant at Watson Wyatt. “Older workers do not have the time to offset declining retirement account values. For many, the only choice is to delay retirement.”

Three-quarters (76 percent) of older workers (aged 50 to 64) cited the decline in the value of their 401(k) accounts as the most important reason why they are planning to postpone their retirement, followed by the high cost of healthcare (63 percent) and higher prices for basic necessities (62 percent).

Experience Counts

This phenomenon is a double-edged sword for employers…

It will be good news for many of the companies who in recent years have acknowledged they are unprepared to facilitate the transfer of key business knowledge to a new generation of knowledge workers. They now have more time to document critical knowledge and processes, and train the next generation. The downside is that companies will be saddled with inflated benefit costs and subsequent hiring issues once the Boomers do begin their inevitable retirement and the War for Talent again comes to the forefront.

A significant positive factor for employers is that this older talent pool has a wealth of qualities that only come from age (and the resulting workforce experience!) This wisdom is priceless as organizations continue to navigate in these uncharted economic waters and searching for the path out. There is much to learn from experienced business leaders who have confronted many economic, market, and organizational challenges in their careers.

A major part of the value proposition behind M Squared Consulting is that we deploy seasoned experts on our client engagements. These project professionals have years of industry and functional experience that they bring to each client project. Clients benefit from this consulting experience and industry knowledge as our consultants drive results on their critical business issues.

The Churchill Club recently held their 11th Annual Top Ten Tech Trends event. This event brings together a group of industry panelists who attempt to predict the next big trends in the industry. This year was a bit different from previous years as each of the five panelists outlined one trend of their own choosing and the rest were “crowd-sourced,” whereby the moderators picked them based on criteria like which areas are getting venture funding and the number of press mentions.

After each trend was presented, the panelists voted (a green paddle held up if they agreed, a red one if they disagreed). They then debated the pros/cons, before the audience voted. Here’s a rundown of the 10 trends that were identified:

1. The Millennials are here. Everything is changing. Rapidly! - Joe Schoendorf, Partner, Accel Partners

The Millenial generation is about to graduate from college and enter the workforce. Schoendorf’s observation was that this generation doesn’t remember what it was like not to be online. He feels this generation will advance innovation farther than ever because they grew up with technology and the web. From a workforce perspective it will be very interesting to see how this generation pushes the evolving world of work.

The audience mostly agreed on this trend.

2. Advanced batteries will be the most popular alternative energy investment in ‘09 and’10. But the medium term will provide the best returns - Crowd-sourced Idea

The panel noted that while the press seems to love talking about this trend, it never seems to happen. Battery technology has been very slow to develop, and there isn’t much to suggest that this will change anytime soon. Having said that, if a company can bring an advanced battery to maket, it will be huge.

The crowd was evenly mixed on this trend.

3. The unstructured data deluge will create the next great information leaders - Ann Winblad, Partner, Hummer Winblad Venture Partners

Enterprise data will continue to grow at a huge rate. In five years, 80 percent of that will be unstructured, says Winblad. Some argued that this idea isn’t particularly new - but most agreed think the time is indeed right for addressing this issue.

The crowd mostly agreed with this trend.

4. Wireless broadband will be one of the only IT sectors to see increased funding this year - Crowdsourced Idea

Everyone agreed that this is an old idea. Even with more investment, bandwidth demand will continue to grow.

The crowd almost entirely disagreed with this trend.

5. “Maintech” not “Cleantech” - Increasing carbon efficiency of global GDP - Vinod Khosla, Founder, Khosla Ventures

Khosla thinks that it’s not necessarily the hot “greentech” trend that will thrive in this economy, because it’s still too small a part of the market. Instead, he looks for innovation in more traditional energy technology. A lot of the smartest students in this country are getting into the energy tech field, he noted.

Most agreed with this trend.

6. Power and efficiency management services will see a growing level of investment and innovation - Crowd-sourced Idea

The idea that energy in the future isn’t just going to be about building new power plants, but instead will be about figuring out how better to distribute the power we’re already creating. The smart grid will be increasingly important and a number of companies are working on this.

The crowd mostly agreed with this trend.

7. The triumph of the distributed web - Steve Jurvetson, Managing Director, Draper Fisher Jurvetson

The distributed web is “the aggregate power of all of you,” according to Jurvetson. The theory is that crowds will control most of the interesting things people look for on the web. People are already spending more time in social networks than on email.

The audience was about half and half on trend.

8. Healthcare administration will see the best growth in B2B software in ‘09 and ‘10 - Crowd-sourced Idea

Because they were running short on time, the group skipped this one, which everyone dubbed as old news.

9. Consumption of digital goods on mobile devices is the biggest growth story of the coming decade - Ram Shriram, Managing Partner, Sherpalo Ventures, LLC

Shriram believes the ad-supported model cannot continue to fuel growth in the mobile space. He thinks application building may be the model that succeeds, noting that we’re already seeing it across a variety of platforms in both the mobile and social networking space. He also believes that there’s a trend towards paid applications - especially cheap ones - and that will be enough to grow the industry.

The audience mostly agreed with this trend.

10. Electronic displays will prove the hottest investment in hardware this year and the next - Crowd-sourced Idea

Again, running short on time, the panel barely talked about this one, but suggested there’s no real money to be made here even though the trend is hot.

The audience almost completely disagreed with this trend.

Two More Ideas

The two moderators, Tony Perkins, and Jason Pontin, also put up two trends:

1) DC will prove to be a poor VC

Washington DC trying to get involved in funding new ventures in technology will fail. Entrepreneurs need to be allowed to do what they do best, without government meddling.

The audience completely agreed with this trend.

2) The rumors of the demise of the reporter have been greatly exaggerated

While newspapers and magazines will continue to struggle, there must be a place for real journalism in the world - even if it is online. Bloggers cannot replace trained journalists - it’s a collaborative process between professionals. Some of the panel took exception to the notion that bloggers can’t also do journalism, but all agreed that there needs to be objective reporting on things like the Iraq war.

The audience mostly agreed with this trend.

Summary

Overall, energy, data and the web were the main themes discussed this year. It is worth noting that predictions like these must always be taken with a large grain of salt. While forward-looking views do no always come to fruition they are often directionally correct, and as such provide clues for how companies should strategize and react.

One thing is clear to me from this discussion; the U.S. technology sector addresses a wide range of business challenges and opportunities. As our M Squared Consulting teams are out in the marketplace having conversations with clients and prospects they are finding the need to innovate is still a priority. Companies will continue to need seasoned professionals, like the talent we have in the M Squared Talent Network, who can quickly execute and deliver results.

Although the recession has likely delayed some of their retirement plans, there is no question that at some point in the future the Baby Boomers will retire. A number of experts are predicting that after they’ve retired from the workforce many will be looking to return for what’s now being called an “encore” career.

For the World War II generation (demographers often call them the “Traditionalists”) retirement was the happy end and the reward for a long working life. For the Baby Boomers, who have redefined pretty much everything in their lives, retirement may just be a transition to an all-new encore career or “a new stage of work after a midlife career,” says Phyllis Segal, vice president of Civic Ventures, a nonprofit focused on redefining the second half of life.

The recession, which has battered everyone’s retirement savings, has had a severe effect on those already out of the workforce. Many newly retired Boomers are now in the uncomfortable position of having to revisit their retirement plans and consider how to replenish their portfolios.

An obvious solution is to seek employment. An increasingly popular choice is to re-enter the workforce as a contingent worker. The growing acceptance and wisdom of the flexible workforce will be an enabler for encore careers.

Between 5.3 million and 8.4 million people ages 44 to 70 already are involved in encore careers, according to a new survey by Civic Ventures and the MetLife Foundation, a philanthropic arm of the insurance giant. A total of 3,585 people were interviewed by research firm Peter D. Hart Research Associates. Half of those in the survey who don’t have encore careers would like to pursue them. Yet they face a number of obstacles.

“The older workers and retirees I study would like to do something meaningful or just make connections with people,” says Phyllis Moen, the Endowed McKnight Presidential Chair in sociology at the University of Minnesota. “They can’t find flexible jobs, though, and they don’t want to work full time anymore. They don’t see the kinds of situations they want.”

Moen says retirees with non-disabling but chronic health problems want to work as much as those who are in good health. They also need flexibility so they can manage their health concerns, but can’t find it.

Most people already in encore careers, however, report sufficient flexibility, even among the 59 percent of survey respondents working 40-plus hours a week. Of those, 73 percent have the flexibility they desire, and 85 percent have enough time outside of work to pursue their interests.

“Flexibility is not just about the number of hours you work but about having control over your time,” Segal says. “The type of work you do and the organization you work in can increase that control, even if you’re working full time.”

Not many people today can sustain themselves on retirement income and Social Security. Segal also shared that, “Employers need good, experienced, passionate candidates. People in encore careers are a potential talent pool with ability, commitment and a passion to do the work.”

Laws that constrain post-retirement employment and corporate policies mandating traditional work schedules also pose obstacles to encore careers, but Segal thinks the necessary changes can be made.

For encore careers, “We need to help social sector employers, nonprofits, government and others become aware, create pathways and training programs for individuals and help individuals find ways to hook up with employers.”

Such pathways are being built. The federal Partnership for Public Service, aimed at bringing talent into government, makes a point of recruiting 50-year-old-plus workers. Several states, including Arizona, Maryland and California, are setting up offices and task forces to recruit older adults to fill vacant jobs and help their communities.

Two bills have been proposed that could help. The Incentives for Older Workers Act, introduced by Sens. Herb Kohl, D-Wisconsin, Gordon Smith, R-Oregon, and Kent Conrad, D-North Dakota, would remove barriers to phased retirement and help people return to work after their midlife careers have ended. For those who postpone receiving Social Security, the act would extend the retirement-delay credit from age 70 to 72.

In this far-reaching discussion there is one certainty: those nonprofits, government agencies, and for-profit businesses who figure out how to find and retain Baby Boomers coming out of retirement will be at a significant advantage when the war for talent heats up. These strategic organizations will greatly benefit from the knowledge and experience which the Baby Boomers can bring back into the workplace.

At M Squared Consulting our mission is to help clients solve critical business problems. Typically this involves getting clarity around the problem, defining a project, and then identifying the expert from our Consultant Network who can deliver the expected results. The M Squared Consultant Network, and the value we can deliver to clients, will likely grow as many Baby Boomers elect to re-enter the workforce as project-based professionals.

Last month we were reminded in dramatic fashion about the value of professional experience and expertise. The real-life example was U.S. Airways flight number 1549 piloted by Captain Chesley B. Sullenberger, III.

After experiencing bird strikes in both engines he expertly glided the crippled airliner to a water landing in the Hudson River. While the 150 plus passengers were shaken up and wet, they all survived with only a few minor injuries.

Aviation experts all agree that the successful landing was a rarity. It was the first time in 50 years that a major aircraft crash-landed in the water - and every passenger on board made it out alive. Captain Sullenberger successfully executed one of the most technically challenging maneuvers, landing a jetliner, with no power, on water. There was absolutely no margin for error.

“I was sure I could do it,” Sullenberger said to Katie Couric in an interview. (See complete 60 Minutes here.) When he said he had to “force himself to use his training to force calm on the situation” Katie asked, “Was that a hard thing to do?” He replied, “No, it just took some concentration.”

In true hero fashion, before “Sully” exited the plane he walked the aisle of the sinking jet twice to make sure no passengers or crew remained.

It was truly a remarkable feat by an accomplished pilot.

There are many interesting parallels to the business world. I believe Sullenberger deserves notoriety not just for his flying skills but for what a seasoned, tenured, professional can bring to an organization.

In this time of economic turmoil and downsizing many companies don’t fully realize the enormous value that is locked up within their most senior-ranking employees. It is a mistake to just look at salary savings alone when reducing headcount. In many cases the older workers are the storehouse of institutional knowledge. When the economy recovers and the Baby Boomer generation again thinks of retirement, this dynamic will become even more acute.

Another parallel is the management consulting profession. Companies typically hire consultancies to solve problems. Their expectation is that the consultants have the knowledge and experience to help. At M Squared Consulting our tagline is “targeted expertise, driving results.” This symbolizes our value proposition, and is truly represented by the high caliber consultants we deploy on engagements. The average M Squared consultant has over 15 years of professional experience. To say they have “been there and done that” is an understatement.

Our consultants are seasoned professionals who have elected to practice consulting as a career. Like Captain Sullenberger, their tenure, seniority, and decades of experience have polished, honed, sharpened, and perfected their business performance. It is a win-win deal. The consultants benefit because they get to do the work they love for interesting clients. Clients benefit because of our consultants’ ability to identify and solve challenging problems, and deliver bottom-line results.

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.

With California facing a $42 billion deficit in the current economic downturn, a gloomy Governor Arnold Schwarzenegger has warned that the Golden State is on the brink of insolvency.

According to government statisticians over the past year more people have left California than any other U.S. state. No doubt many leave because they are disenchanted with snarled traffic, scarce jobs, expensive housing, and some of the highest taxes in the nation. Add to that the prospect of still higher taxes and fewer public services, and it would appear that normally optimistic Californians have little to celebrate.

But despite these negative sentiments, many experts now say the most populous state in the U.S. (and the world’s eighth-largest economy if it were a country) is extremely well positioned to rise again. In fact, the financial crisis could spur major changes in the state economy that will pay huge dividends in the long term.

How?

Well, California is blessed with abundant natural resources, large ports and access to the Pacific Rim, a large and relatively young work force, a strong entrepreneurial culture, and a huge technology industry. Once we get past the Great Recession of 2008/09 all these factors become significant assets for California’s future.

“The prophets of doom and gloom are just not looking at the reality of California,” said Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast.

“The government has created kind of a mess and that’s a problem to be solved, but the negatives are actually fairly small. I think you can expect a lot of good out of California,” he said.

We must remove the rock upon our chest

The typically positive Governor Schwarzenegger recently made headlines when, instead of delivering his usual cheery “state of the state” speech, he issued a bleak message about California’s roughly $1.5 trillion economy.

“California is in a state of emergency,” said the Governor. “Addressing this emergency is the first and greatest thing we must do for the people. The $42 billion deficit is a rock upon our chest and we cannot breathe until we get it off.”

At the heart of California’s problems, economists say, is the government’s heavy reliance on personal income taxes as a funding source. This produces wild swings in revenue as State coffers overflow in good years and then dry up in leaner times.

A big reason for the state’s reliance on income taxes is Proposition 13, a voter-approved change to the state Constitution that limits property tax increases and requires any plan to boost taxes to receive the approval of at least two-thirds of the legislature. As a result, state Legislators have responded by burdening state residents with some of the highest income and sales taxes in the U.S.

This has worked up till now because of steadily increasing employment and wages. But now unemployment rates have turned grim, with the state’s jobless rate in December rising to a 14-year high of 9.3 percent, well above the national average of 7.2 percent. This rate is approaching the same level as the recession in the early 1990s, when California’s economy suffered from the post Cold War decline of the aerospace and defense industries, and unemployment rose to nearly 10 percent.

Clearly income and sales tax revenues will come up short if more Californians aren’t working.

Time to re-set the economy

Many economists say California has long needed to fix that revenue roller-coaster ride and are hopeful that this current crisis will force state leaders to take action.

Is the problem going to be compounded by the exodus of people? Probably not, since California’s population (currently 38 million) is actually still growing thanks to immigration and births. It is misleading to compare absolute numbers with other states when California’s population is so much larger than any other state. California’s population could hit 60 million by 2050, according to some projections, six times 1950’s 10.5 million people and 60 percent more than today.

Looking ahead

Despite the recession, California remains a leader in technology, green energy, biotechnology, aerospace and other industries that are expected to fare well in the world economy and create many new job opportunities.

Demographics give California one other bit of good news: the state’s relatively young work force will certainly give it an edge as the economy recovers and baby boomers once again think of retirement.

Hard-hit by the mortgage crisis and foreclosures, home prices have dropped across California - making home ownership achievable for the first time in nearly a decade for many young families. Although this is not good news for current homeowners, it will prove to be important as the war for talent heats up and the cost of living in California potentially becomes a detriment to recruiting.

The time for industry and government to re-invent themselves is now. The sooner we stabilize things and make realistic plans for the future, the better positioned we will be to capitalize on the recovery. At M Squared Consulting we’re actively helping many clients to both weather the storm and build solid foundations for future growth.