Sign up for our
Good Company e-newsletter:
March 25, 2008 | Volume 2 | Number 2
March 25, 2008
By Jessica McKenzie Peterson, MS
The countdown has begun for the first of 78 million Baby Boomers to reach retirement age in 2011. Even as Boomers express mixed feelings about leaving the workforce, employers face daunting figures: the prospect of 40 percent of employees retiring within the next two decades and only 50 million Generation Xers (born 1961-1981) poised to fill those jobs. In spite of the growing presence of Generation Y (born 1982-2002), the Economic Policy Forum predicts a shortage of 35 million workers by 2030. This forecasts not only a statistical drop in the labor force growth rate from 1.6 percent per year between 1950-2000 to 0.6 percent anually between 2000-2050, but also an exodus of talent and knowledge and the need for adaptive solutions on the part of employers (Toossi, 2002).
Although some debate the magnitude of the impending gap between Baby Boomer retirement and Generation Y’s ascendance, this period guarantees tremendous change in the workforce. In a study examining the impact of shifting employee demographics on organizations during the next three to five years, 81 percent of executives in the field of learning rated the effect as significant or moderate (American Society for Training & Development, ASTD, and IBM, 2007). Despite their overwhelming awareness of the impending workforce changes, only 16 percent of respondents considered the issue a priority and 19 percent said they have no plans in place to handle the challenges.
While the data may be dramatic, the number of vacancies left by a retiring generation does not even begin to capture the true impact of the loss of expertise, insight and know-how accumulated throughout a career. Bracing themselves against this loss, employers increasingly turn to training and career development for solutions. In 2006, American organizations invested nearly $130 billion in their employees (ASTD, 2007). The trend continues as 46 percent of employers plan to spend more on training and development in 2008 and 51 percent plan to spend more on career development, making these the fastest growing areas of organizational investment (Mercer, 2007). In addition to fostering employee loyalty and increasing productivity, retention and job satisfaction, training and development initiatives provide an ideal opportunity for the organization to preserve existing knowledge.
Knowledge transfer or sharing refers to identifying and communicating both explicit and tacit information that helps an organization achieve its goals. Surprisingly, only four percent of organizations report having formal knowledge-transfer processes and 44 percent not only have no knowledge sharing structures in place, but no plans to initiate any (Novations Group, 2007). A variety of formal and informal knowledge management methods exist to help build and retain institutional knowledge, from high-tech solutions to face-to-face processes. While retaining formal knowledge may seem more crucial, capturing implicit know-how often proves to be the more difficult challenge.
Time saving strategies or advice from seasoned workers can greatly affect job satisfaction, especially as employees face increasing productivity demands. Considering that the average American will have had 10.5 jobs between the ages of 18 and 40 and that 75 percent of employees looking for new jobs cite increased career opportunity and dissatisfaction with the potential for professional development among their top reasons for searching, employees’ desire for growth and development is a key factor in the retention equation (Bureau of Labor Statistics, 2006; Society for Human Resource Management, SHRM; 2006).
According to a survey of small business owners, 37 percent of respondents said their older employees were planning to delay retirement (National Association of Professional Employer Organizations, NAPEO; 2008). Meanwhile, the knowledge and experience possessed by Baby Boomers has 45 percent of hiring managers planning to recruit retirees or offer incentives for workers approaching retirement age to extend their employment (CareerBuilder.com, 2005) and eight in ten Baby Boomers say they plan to work at least part time after retirement (AARP, 2006). Mature workers not only have the skills and experience, they also want to contribute and plan on staying involved long after they have officially retired. With Baby Boomers willing to offer their expertise, knowledge sharing is a key strategy to retain and engage mature employees while bridging the workforce gap.
There is no one size fits all approach to knowledge sharing, and different methods will be most effective for individual employees and organizations. Corporate alumni networks provide retirees and former employees with a sense of community, facilitate candidate referrals and rehires, as well as build loyalty while retaining valuable resources. Pairing junior employees with senior mentors is another strategy that helps new employees climb the learning curve and focuses on the trainees’ specific needs. Although mentoring requires a substantial time commitment, mentoring positively impacts job satisfaction (Koberg, Boss, Chappell, & Ringer, 1994) and has been shown to reduce turnover intentions (Viator & Scandura, 1991).
Both job shadowing and job sharing can help smooth transitions through first-hand experience and action learning, a process where people of varied skills and experience come together to focus on problem solving and solution planning, can foster a culture of knowledge sharing. Other ideal forums for addressing multigenerational knowledge sharing are communities of practice. Grouping employees based on the shared concern of bridging the knowledge gap provides opportunities to identify areas in jeopardy and strategies to prevent loss.
Knowledge sharing also strengthens an organization as a whole, by demonstrating that the employer values the contributions of each employee. As Baby Boomers transition into the next stage of their lives, developing processes to help them share their expertise not only serves as a way for retirees to leave a legacy and help ensure the well-being of future generations, but also provides the mechanisms for career growth and development sought by Generations X and Y. A practical solution for organizations, knowledge sharing delivers a return on experience for younger employees, Baby Boomers and employers, alike.
AARP. (1999). Baby Boomers envision their retirement: An AARP segmentation analysis. Retrieved March 24, 2008, from http://www.aarp.org/research/reference/publicopinions/aresearch-import-299.html
American Society for Training and Development (ASTD). (2007). 2007 State of the industry report. http://www.astd.org (Industry Highlights tab)
Bureau of Labor Statistics. (2006). Number of jobs held, labor market activity, and earnings growth among the youngest Baby Boomers: Results from a longitudinal survey summary. Retrieved March 24, 2008, from http://www.bls.gov/news.release/nlsoy.nr0.htm
CareerBuilder.com. (2005, December 29). Higher Starting Salaries, Better Compensation Packages and More Flex Time in 2006, According to New Hiring Trends Survey by CareerBuilder.com and America Online. Retrieved March 24, 2008, from http://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?id=pr207&sd=2005%2F12%2F29&ed=2005%2F12%2F31&cbRecursionCnt=1&cbsid=033152823b534ff6b85c27e27d351966-259716367-W7-2
Employment Policy Foundation. (2004, March 11). The balancing act. Retrieved March 24, 2008, from http://wfnetwork.bc.edu/downloads/EPF/EPF_Telework.pdf
IBM and the American Society for Training and Development (ASTD). (2007). Closing the generational divide. Retrieved March 24, 2008, from http://www-07.ibm.com/events/au/ghcs/pdf/Closing_the_Generational_Divide.pdf
Koberg, C. S., Boss, R. W., Chappell, D., & Ringer, R.C. (1994). Correlates and consequences of protégé mentoring in a large hospital. Group and Organization Management, 19, 219-239.
Mercer. (2007). Employers expect training investments to grow faster than investments in other HR categories. Retrieved March 24, 2008, from http://www.mercer.com/pressrelease/details.jhtml?idContent=1282915
National Association of Professional Employer Organizations (NAPEO). (March 5, 2008). Report on the February 2008 survey of small businesses. http://www.napeo.org/newscenter/research.cfm
Novations Group. (November 9, 2007). Few employers capture Boomer know-how.
Retrieved March 24, 2008, from http://www.novations.com/news/11-09-2007,144.html
Society for Human Resource Management (SHRM). (2006, December 19). Nearly three fourths of employees polled are job hunting. Retrieved March 24, 2008, from http://www.shrm.org/press_published/CMS_019635.asp
Toossi, M. (2002). A century of change: the U.S. labor force, 1950-2050. Monthly Labor Review. 125(5). Retrieved March 24, 2008, from http://www.bls.gov/opub/mlr/2002/05/art2full.pdf
Viator, R. E. & Scandura, T. A. (1991). A study of mentor-protégé relationships in large public accounting firms. Accounting Horizons. 5, 20-30.
E-mail questions or comments to: email@example.com