There are currently five generations that are active in the workforce, ranging from the oldest group, the silent generation, which has all but exited the workforce, to the youngest group, Generation Z, which is just beginning to enter the workforce.
Smart Business spoke with Jody Wheaton, executive director, client solutions and programs at Cuyahoga Community College’s Corporate College, about the coming generational transition, its impact on businesses and how to facilitate knowledge transfer while there’s still time.
What is the effect of today’s mix of generations working together?
When business leaders and management talk about the generational mix in the workforce, it’s often characterized by differences and conflicts. That fails to account for the many similarities shared between the generations.
For example, baby boomers and millennials, the two largest workforce cohorts, have complementary dispositions. Millennials like to learn and baby boomers like to share information. This is an especially important link given the rate of retirement of the latter generation and the threat their exit poses to the transfer of institutional knowledge.
How is the rate of boomer retirements impacting employers?
There has been a surge in boomer retirement, with some reports saying as many as 10,000 boomers are retiring every day. This is expected to persist, and the impact will be felt for many years to come.
One area where the impact will be felt the most is in management where some 50 percent of boomers in those positions will soon retire. Not many companies are prepared to have half of their management team turn over in the next five to 10 years.
What is the greatest effect of losing this management talent?
Allowing knowledge to leave the organization becomes a bottom-line expense for companies because the newly retired had a unique skillset and organizational understanding that will no longer exist within the company. Businesses will sometimes find themselves in the position of hiring former employees back as consultants because they have no other way to fill the knowledge gap.
Businesses generally are not prepared for the impact baby boomer retirements will have on their organization. Many companies have done little to document or share that knowledge before it walks out the door. It’s a challenge companies must address now or they stand to lose a great deal of their organizational knowledge if nothing is done.
How can companies facilitate the sharing of knowledge among employees?
It’s important to create a transfer strategy to impart that knowledge on the younger generations. One way to address this is to have older workers mentor people from the younger generations and share their knowledge. Mentoring relationships should be semi-structured, more informal. Some companies organize gatherings where older and younger generations have the chance to meet and talk. It also helps to provide general guidelines that define what makes an effective mentor and mentee. Ultimately, however, that relationship should be put in the employees’ hands.
Conduct a workforce analysis to determine what the older generation values and use that information to make sure they stay engaged. Baby boomers’ contributions to the business are meaningful, so they shouldn’t be made to feel as if they’re being replaced.
What steps should companies take to engage both boomers and millennials?
The management team should have timely career conversations with aging team members to understand their plans and not be caught off guard by a seemingly sudden decision to retire.
Managers should also ensure the younger generation has a development plan so the path to their next career step is clear. They should work with HR to ensure that talent pools exist and proactively identify who is capable of advancing to fill leadership positions.
Taking practical steps today to address the wave of boomer retirements gives companies the best chance of mitigating its impact.
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