Preparing for the Baby Boomer Exodus
If your staff is heavy on the over-40 crowd, here's how you can be ready when they start leaving the nest.
It's no secret that the Baby Boom generation is getting a little long in the tooth. Within the next five to 10 years, over 76 million Baby Boomers are scheduled to retire from the workforce, with only about 44 million Generation X'ers available to pick up the slack. Companies that don't start planning now for this mass exodus of talent will find themselves in a gut-wrenching transition. Who will help them?
Enter The Hyde Group Inc., a human resources firm based in Greenwich, Connecticut that specializes in helping companies cope with change and transition in the workplace.
"I realized several years ago that without proper planning, companies both large and small will be caught with their pants down when their Baby Boom employees retire en masse," says company founder Anne Hyde. Hyde, a native of Great Britain who survived the London blitz during World War Two (as a child, she was buried for three days in a bomb-collapsed house, with no food or water), decided she would create a new consulting product to help companies transition quickly to a younger workforce.
She began by seeking the help of an old friend, New York City management consultant G. Todd Jagerson. Coincidentally, Jagerson had just completed a remarkably similar project: helping formerly state-owned companies in Russia recover from the "brain drain" that occurred when millions of people suddenly fled the country after the collapse of the former Soviet Union. Together Hyde and Jagerson developed The Boomer Transition Service, a step-by-step program that helps HR executives identify the extent to which the Baby Boomer exodus will affect their companies, decide which Baby Boomers should be encouraged to stay on board into their 70s and which should be let go, and provide training, mentoring and support to those Generation X executives who will be asked to assume a lot more responsibility in a very short time.
"It may seem silly to talk about all this at a time when companies are laying off people right and left," says Hyde, "but if companies don't start retraining people and planning for this right now, they don't realize how desperate they'll be for talent in the years to come." As an example, adds Jagerson, "70 to 80 percent of all airline pilots are scheduled to retire in the next five years."
The Boomer Transition Service sets out a four-step strategy:
- Immediate: "Stop doing things that force good Baby Boomer executives to take early retirement," says Jagerson, and forego traditional practices (such as "Golden Parachute" payments for retiring execs) that will dramatically increase the cost of a mass exodus.
- Short-term: Get selective Baby Boomer executives to stay on beyond normal retirement age for at least five to seven years, with appropriate incentives. "I think many Baby Boomers can be persuaded to work into their 70s," predicts Hyde, "but I don't think they'll want to do the same jobs. Companies will lose a great deal if they don't continue training their Baby Boomers and help them develop new skills."
- Middle-term: Develop Generation X talent through a massive internal mentoring and training program.
- Long-term: Adopt an "employment branding" strategy to make the company's jobs more attractive than its competitors' jobs. "This will be very important as companies start fighting aggressively over a shrinking pool of talent once the Boomers leave," says Hyde.
What about the Baby Boomer execs who are left behind in the transition? Hyde says her firm's executive coaching services, offered as part of The Boomer Transition Service package, will help aging executives ease into retirement or find another career. "Companies will want to help these people, if for no other reason than they'll be swamped with age discrimination lawsuits if they don't," says Hyde.
Hyde believes it will be particularly difficult for many Baby Boomers to make this transition. "The Baby Boomers didn't suffer through the Great Depression, the World War and the Cold War as [my parents] did," she says. "They grew up in one of the strongest economies of all time and have been 'living for today' with the expectation that things would always continue that way. They haven't really saved as much for their retirement as they'll need, and as a result, they're going to have great difficulty getting over what will probably be their first major setback."
And that's a problem that's never plagued Anne Hyde, who claims that "if you can survive the Blitz, you can survive anything."
Cliff Ennico is host of the PBS TV series MoneyHuntand a leading expert on managing growing companies. His advice for small businesses regularly appears on the "Protecting Your Business" channel on Small Business Television Network. E-mail him at firstname.lastname@example.org. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. Copyright 2003 Clifford R. Ennico. Distributed by Creators Syndicate Inc.
Cliff Ennico is a syndicated columnist and author of several books on small business, including Small Business Survival Guide and The eBay Business Answer Book. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.