There is a “perfect storm” brewing. Today in the US, we are experiencing the greatest level of retirement-aged employees in our history. The US “Baby Boomers” (born between 1946 and 1964) will retire at an alarming rate for the foreseeable future.
According to the US Census Bureau, beginning January 1, 2011 baby boomers are reaching the retirement age of 65 at a rate of 10,000 per day, which will continue for the next 20 years.
This phenomenon will force insurers to find creative solutions to address the loss of experienced subject matter experts. According to the US Bureau of Labor statistics, 24% of employees in the insurance industry are age 55 or older. However, recent studies show that many companies are not prepared to handle the loss of key resources. The results from a February, 2015 Gap Analysis Report highlighted that:
Most organizations are primarily focused on assessing the impact of the aging workforce and the impact of retirements within a relatively short period of time (1-5 years) versus a more long-term recommended view.
There is a lack of urgency around preparing for impending demographic shifts. Many either are at the early stage of examining the issue or believe that no changes are necessary. Thirteen percent reported that they are not even aware of this potential change to the makeup of the workforce.
Organizations lack formal long-term forecasting, planning and assessment related to changing workforce demographics and an aging workforce. Most organizations do not have a process for assessing the impact of demographic changes in their workforce beyond the next one to two years.
Are you prepared for the changing demographics in your company? Answering “yes” to this question is key to the sustainable success of your organization. If you have even a shadow of a doubt, it might be time to take a second look at your internal demographic staffing models. There are a number of things that you can do today to help you prepare for these changes.
Option 1: Complete a long-term assessment of the impact of your aging workforce:
Identify areas of vulnerability and develop action plans to address them. For example, many employees who are ready for retirement have been working with their clients for many years and have created trusted relationships. Your assessment should highlight these key trusted relationships and include actions on how best to facilitate the transition to the new employee. It’s important that you make this assessment part of your standard business planning practices.
Option 2: Evaluate your existing benefit programs and look for opportunities to implement flex based and/or phased retirement programs.
As part of these programs, document requirements specifying that the retiree will dedicate time and resources mentoring other employees. Although implementing a flex-based or phased retirement program may be expensive, the primary goal is to provide some form of incentive with the retiree to foster an effective transition and knowledge transfer. You can even leverage low or no cost benefits, like company sponsored discount programs and existing reward and recognition programs, to grease the wheels.
Option 3: Allow retired workers to return on a part-time or project basis and participate in company benefits like the 401(k) plans.
Allowing retired workers to work part-time or on a project basis you can incur cost savings by deferring hiring replacements while fostering mentoring of younger employees to preserve your business knowledge.
Option 4: Leverage your technology
Consider creating a comprehensive infrastructure for storage and maintenance of your business processes and procedures to facilitate knowledge transfer.
With adequate planning and creative work options, your business will be better prepared to meet any labor shortage. By identifying the required skills of your current and future workforce, monitoring your key person relationships, and implementing succession planning for these positions, your company can weather the storm caused by the “baby boomer” retirements.
 Comparison of the 2014 Older Workforce Survey conducted by the Society of Human Resource Management (SHRM) and The Alfred P. Sloan Foundation