Preparing for the inevitable wave of retiring employees
About 10,000 baby boomers turn 65 each day, with the entire generation projected to reach retirement age by 2030*. Is your organization adequately prepared for this demographic shift?
As a significant number of employees approach retirement age, it is crucial to proactively prepare for their departure to ensure a smooth transition. Is your organization ready to navigate this inevitable wave of retirements?
When the next wave of retirees begins to leave the workforce, some organizations will inevitably fumble the transition that comes with losing experienced employees. It is crucial to acknowledge the impact of retirements extends beyond mere headcount reduction. When experienced contributors and leaders are expected to retire, your organization must proactively de-risk its operations. This involves crafting a seamless transition of people, knowledge, and customer relationships in the post-retirement era. Are you prepared to mitigate these risks by facilitating a smooth transition of knowledge transfer, skills, and customer relationships for your organization?
The first step is to identify the areas of risk within your organization. When contemplating retirement risks in your organization, certain groups may come to mind: senior leaders, technical experts, legacy product teams, geographies. It is important to resist the temptation of relying solely on average ages within business units to determine your focus. Remember, the devil is in the details; Take into account the following areas that contribute to and influence your organizational culture and operations:
Geography: Assess demographic data across regions, locations and specific offices, as applicable. If a single office were to experience a mass retirement, it would necessitate careful planning and management.
Organizational Level: While leaders are often the focus when discussing retirement, it is important to recognize that other levels within the organization may also be vulnerable to retirement waves. Identify individual contributors, managers, directors and other critical and niche roles that could be impacted by a significant number of retirements.
Diversity: Remember that diversity exists in various forms within an organization. Coinciding retirement timelines could potentially affect any aspect of diversity and jeopardize organizational culture and overall success. Look beyond age and delve into your demographic data to identify and address any potential risks.
Understanding the intricacies that drive your organization is essential for a comprehensive risk analysis. Considering the above factors in combination with traditional attrition risk factors such as retirement likelihood, technical and institutional knowledge, client relationships, and cultural impact will create a holistic risk rating system. By employing a robust risk rating system, you can effectively discern and quantify different facets of risk, enabling you to prioritize groups with confidence and implement highly effective strategies for risk mitigation.
Stay tuned for further insights into preparing for the retirement bubble, including a crucial aspect: How can you ensure that your leaders are adequately empowered to drive retirement preparation efforts effectively?
Sources
* United States Census Bureau, “By 2030, All Baby Boomers Will Be Age 65 or Older” December 10th, 2019.