The world of work is facing a perfect storm when it comes to retaining talent and knowledge. As the baby boomer generation – those born between 1946 and 1964 – reaches retirement age, younger workers are changing jobs more frequently than ever before. Youth unemployment is at record levels in many countries, meaning the next generation is failing to pick up suitable work experience.
Aon’s 2015 Global Risk Management Survey, which surveyed senior decision-makers across 60 countries, found the failure to attract or retain top talent was the fifth-most significant risk facing businesses worldwide. This has been confirmed by other studies — more than 38% of hiring managers are struggling to find or retain the talent they need, according to a recent survey of 41,700 managers in 42 countries, with 22% citing lack of experience as a key challenge. Aon’s 2015 Trends in Global Employee Engagement report confirmed this — the average employee’s work experience has dropped by 28% since 2013.
Skills, knowledge and experience are vital to a successful business, but also necessary to innovate and evolve with the needs of the marketplace. So retaining existing institutional knowledge is an increasing priority. If finding people with the knowledge you need is getting harder, a good starting point is focusing on keeping and developing the knowledge and people you’ve already got.
Although the loss of data is an increasing concern in the age of cyber threats, the primary way organizations lose institutional knowledge is by losing valued employees with that knowledge.
Every year, four million baby boomers leave the workforce in the U.S. alone, with 10,000 people a day hitting retirement age. In the U.K. and many other developed countries, more than 30% of the workforce is older than 50.
Many baby boomer workers are in leadership positions, and when they leave the workforce almost all are taking with them decades of accumulated skills, experience, networks and personal business relationships, as well as first-hand knowledge of the reasons why their businesses have evolved the way they have.
To make sure this valuable experience isn’t lost, organizations need to take a strategic approach, starting with a thorough analysis of their workforce, including:
- How many employees are coming up to retirement in the next five years?
- How many have key skills, knowledge or experience?
- How many have a succession plan in place?
Next, identify key soon-to-be retirees whose knowledge you most want to retain and begin to develop or expand your retiree-specific knowledge retention strategies. Just be aware that one size does not fit all — to get the best results, you may need to tailor your approach to the individual.
There are three primary methods businesses are using to pass older workers’ expertise on to the next generation: knowledge hubs, mentoring programs and staggered retirement.
Knowledge hubs are familiar to most organizations — a form of corporate intranet that pull together important knowledge in an easy-to-access central digital repository. The challenge is twofold: getting the right information into the hub and making it useable. Older employees, in particular, may struggle with digital technology, meaning you will likely need to provide training or assistance to help them enter the information you require. Equally, identifying what that information is can be difficult, which is why the most successful knowledge hubs are backed up with dedicated teams to manage and maintain them, as well as to measure their effectiveness and use. Apple takes this to an extreme, with dedicated university-style courses organized via an employees-only site backed up with in-person training.
Mentoring programs have become increasingly popular over the last couple decades and have been proven to have a positive impact when implemented effectively. However, not every experienced employee will make an effective mentor — clear desired outcomes need to be communicated, expectations need to be set, training may be necessary to maximize benefits and you may need to introduce an incentive program to encourage participation. Both mentors and mentees will also benefit from third-party support. While it’s worth noting that the most successful mentoring programs tend to run over an extended period, there are no immediate, overnight benefits.
Staggered retirement is a relatively new concept and one with much to recommend it. There are multiple variations in execution, but the basic concept is simple: Rather than retiring completely, employees are retained by the company in some capacity, perhaps shifting to part-time, perhaps to a contingent or contract basis. There is often a renewed focus on training or advising colleagues over their previous work. This enables the organization to continue to have access to valuable expertise and the retiree to top-up their pension with some additional earnings. However, there are some potential pitfalls, as Bankrate explains; depending on the nature of your retirement and health care plans, the retiree extending their working period may end up losing out, so seeking expert advice is vital.
The broader benefits of active knowledge retention
An added advantage of encouraging older employees to share knowledge is a boost in engagement — and with that retention levels — of younger employees. Career opportunities were the number one employee engagement driver in every region in Aon’s 2015 Trends in Global Employee Engagement survey, and opportunities to learn and develop new skills are a vital part of career development.
Mentoring programs can also act as successor training schemes, giving more junior employees a clearer sense of their career path. Strong training programs are in demand among today’s increasingly mobile workforce, and well-constructed knowledge hubs can be a valuable pull-factor for jobseekers when supported with the right mix of internal communication and encouragement.
Finally, while the very act of trying to systematically collate the knowledge and experience of your staff can help to increase their sense of value, it can also increase your organization’s capacity to make the most of its employees’ skills.
While conducting an initial workforce analysis to identify key employees whose knowledge you want to retain, it may also be possible to start developing an internal skills database to maximize the potential impact of staff who may not be utilizing all of their expertise in their current roles.
With failure to innovate or meet customer needs the sixth biggest concern for businesses in Aon’s 2015 Global Risk Management Survey, knowing what your organization knows is a crucial first step in ensuring that you’re able to adapt. The best way to retain your knowledge is to be aware of what knowledge you have in the first place.
“Organizations need to get to grips with the aging workforce challenge today or face skills shortages that will affect their ability to grow or deliver key services in the very near future… Too many employers are sleep-walking toward a significant skills problem that risks derailing their business strategy if not addressed. Not enough organizations are thinking strategically about workforce planning or even know enough about the make-up of their workforce.” – Ben Willmott, head of public policy, CIPD
“The retirement of the current generation of corporate leaders will lead to cultural changes that most organizations are unprepared for. In order to thrive in the post-baby boomer landscape, companies need to put serious thought and effort into smoothing the intergenerational transition for leaders from generations X and Y.” – Richard Boggis-Rolfe, chairman, Odgers Berndtson
“Retirement is currently seen as ‘all or nothing,’ where you are falling off a cliff. This problem comes from the way our public and private pension policies are framed. People would like to be able to work, but not as much, or work part of the year only. Instead of retiring all at once, they could enter phased retirement — that is perfectly feasible from a workplace policy perspective, but goes against some national policies.” – Ruth Finkelstein, associate director, Robert N Butler Columbia Aging Center, Columbia University
“This article originally appeared on TheOneBrief.com, Aon’s weekly guide to the most important issues affecting business, the economy and people’s lives in the world today.”
- Baby Boomer Retirement: Avoid a ‘Senior Moment’ in Your Business – Business.com, 30 September, 2015
- Preparing for the ‘Silver Tsunami’ – Government Executive magazine, 25 September, 2015
- More Employers Want Workers to Put Off Retirement – Benefits Pro, 11 August, 2015
- Phased Retirement Programs: Will They Make a Comeback? – The Huffington Post, 24 September, 2015
- Why Planning to Work in Retirement is a Risky Business – Reuters, 3 September, 2015
- Flexible Working Key to Keeping Singapore Seniors at Work – Enterprise Innovation, 19 August, 2015
- 6 Ways to Turn Managers into Coaches Again – Harvard Business Review, 10 August, 2015
- Avoiding the Demographic Crunch: Labour Supply and the Ageing Workforce – Chartered Institute of Personnel and Development, June 2015
- 2015 Trends in Global Employee Engagement – Aon report
- 2015 Global Risk Management Survey – Aon report