Companies in the U.S. are facing a pending loss in brainpower like nothing they have ever seen. According to the Census Bureau, when the approximately 76 million people born between 1946 and 1964 retire, it will create the largest exodus from the workforce ever by a single generation. This baby boomer brain drain is creating a ripple of fear about how significant the impact on enterprise will be.
The good news is that you can do something about it. Understanding why you should prepare now will benefit your company today and help create a more secure future for tomorrow. Let’s explore the “Baby Boomer Brain Drain,” an infographic created by MBA@UNC, the University of North Carolina’s online MBA program.
Why You Should Prepare Now
You’ve most likely heard of the “brain drain” phenomenon — in which well-educated and highly skilled workers move from one country in search of better opportunities in another. Since the U.S. is one of the top regions for such influx, there typically isn’t that concern here.
However, for businesses in the U.S., the impending retirement of so many in leadership positions is creating a distinct threat to the future of those they leave behind. Consider a few facts:
- 31 percent of the workforce is made up of baby boomers.
- 56 percent of baby boomers hold leadership positions.
- In 2029, all baby boomers will be at least 65 years old.
There are also specific risk factors that companies should pay attention to:
- Company location: Those located in regions with dense baby-boomer populations face a higher risk — including Maine, New Hampshire, Montana, Vermont, West Virginia, Michigan, Connecticut, Wisconsin, Ohio and Alaska.
- Industry type: Specific knowledge-intensive industries are also at increased risk — like education, petrochemical utilities, finance, the federal government, engineering and defense manufacturing.
- Company ownership: If you have a baby boomer at the helm, that brain drain could place a company at significant risk. Since 66 percent of all businesses with employees are owned by baby boomers, and it’s expected that businesses worth an estimated 10 trillion dollars will change ownership over the next 20 years, the economic impact could be dire.
Unfortunately, many companies are not preparing as they should. Despite the fact that 62 percent of employers at Fortune 1000 companies believe that the upcoming retirement wave will create skilled labor shortages over the next five years, few are doing anything about it. However, you don’t have to be one of them. By planning ahead and taking a few strategic steps, you can help to make the most of what the baby boomers have to offer before they head out the door.
Strategies to Secure Your Company’s Future
In general, senior leaders express a willingness to pass on their expertise to younger generations. Taking advantage of this fact can be beneficial for both parties. A few specific steps can help to establish a framework to make this happen:
- Conduct a strategic workforce analysis. Understanding the specific generational mix of your workforce will help you create a more effective plan.
- Refine your retention strategy. This is particularly true when it comes to baby boomers—many of whom may be planning to work well beyond the traditional retirement age of 65.
- Identify, prioritize and engage potential retirees. Appreciation goes a long way, and if they are valued for their experience, and given flexible working options, you may be able to keep them longer than anticipated.
- Prepare senior and emerging leaders. Identify who the upcoming talent is within the younger workforce, and begin preparing them with new training and responsibilities.
- Create knowledge transfer opportunities. Incentivize baby boomers to share what they know with those who will follow in their footsteps. This generation is high on both work ethic and company loyalty, so they’ll want to help everyone succeed.
Armed with a strategic plan, and the actions needed to carry it out, you can help your company prepare for what lies ahead to decrease the negative impact on its future.