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Retaining Skills And Knowledge As Older Workers Begin To Retire

Thursday, December 18, 2008   By Mike Reddy

 

The average age of the workforce is steadily increasing. For employers, that means the average age of their workers is steadily increasing. Baby Boomers, who make up the majority of the workforce, are now aged 45 to 62 years. Over the next few years more and more of them will be retiring turning a trickle into a torrent. In the past new hires would be found easily enough to replace them. In the future the shortage of replacement workers from among the younger generation, the so-called Gen-Y (currently aged 16 to 31 years old), may make finding the right, or any replacement a lot more difficult.

It’s not possible to get a handle on what issues an ageing workforce might present for your business until you have an understanding of the age grouping among your current workers and an idea of when they will start to retire, particularly those that are highly efficient, well skilled or just plain good workers. That can be discovered by carrying out a demographic study to show what percentage overall of employees will become retirement-eligible in the near future. A closer look will identify the key people whose departure would be a real loss to the business.

Next after that is to develop a strategy for tackling any problems the retirement wave might present. You can think in terms of hiring replacements and keeping current people on longer.

Hiring replacements

Most small businesses seem to prefer to hire from among Baby Boomers and Gen Xers with only a minority actually preferring to hire members of Gen-Y for their team. Enthusiasm, a willingness to learn and technological savvy are reputedly among Gen-Y’s greatest assets but their unreliability, lack of experience, frequent job changing, know-it-all attitude and lack of team playing raise concerns for small business employers. But with Boomers going and increasing competition for the small pool of Gen-Xers there won’t be a choice. In the US, typical of advanced economies, the American Society Of Training And Development is predicting that 76 million workers will retire over the next two decades with only 46 million arriving to replace them. Most of those new workers will be Gen-Ys. Employers will be faced with a multigenerational workforce among whom some real generational differences will exist. Generational clashes in the workplace are nothing new. What is new is the size of the gap between their different values and work styles that could threaten to lower morale, increase employee turnover and reduce productivity. Getting them to work harmoniously will be a challenge demanding more focus on enabling and encouraging the ability of different generations to work in a collaborative manner. It’s definitely time to start catching up on information about management techniques for bringing out the best in Gen-Y. On the other hand, employers will be repaid, through the better retention and integration of Gen-Yers into the workplace, for any investment in training they make relating to those basic skills that generation is perceived to be short on such as conflict resolution skills, communication, supervision skills, workplace etiquette and customer service.

Focussing on retention

Keeping on older workers provides an opportunity to retain organisational knowledge for a time and the opportunity to pass it on. Pairing older and younger workers together in a mentoring relationship, maybe guided by some formal training, builds skill level. Having new hires company more tenured employees as they perform their day-to-day tasks, (job shadowing), provides them with an insight into the resources, techniques, and short cuts that make experienced employees more efficient.

Of course, these schemes are predicated on having the old hands around still to pass on their knowledge or to just be doing their job. The fact that Boomers are reaching retirement age isn’t to say that they necessarily will retire. Longer life expectation, poor saving habits and a rising cost of living are keeping many people back at work well after they become eligible to retire. Circumstantial ‘push’ drivers like these may keep people at work but attractive ‘pull’ tactics based on more flexible and innovative working conditions, which suit their needs and circumstances, will ensure you retain or attract the best.

That's why employees need to understand what will make employment continue to be attractive to older workers. For example, older workers tend to prefer a workplace that continues to offer them training, makes some workplace accommodations to suit their reduced physical capabilities, provides flexible scheduling (such as part time work and work from home), offers retirement and health benefits and a phased retirement package.

As the workforce continues to age, businesses that want to stay competitive will plan to retain and use the knowledge of their older workers, as well as arranging for it to get passed on to the next generation.


Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.