Is another perfect storm looming on the economic horizon once we sort through the current financial crisis?
Key industries have not addressed the loss of critical knowledge that will hit them when a huge number of baby boomers head for retirement by 2010. In fact, although the retirement crisis is already well underway, our current economic crisis has bought management a few crucial years or so by the fact that many boomers put off retirement when they saw recent and dramatic plunges in their 401(k) and related retirement accounts. But many companies face huge losses if this looming shortage of skilled labor and management is not addressed now.
What industries are affected and why are we unprepared? Ongoing studies by organizations such as the AARP, formerly the American Association of Retired Persons, and the Society for Human Resource
Management (SHRM), among others, have been sounding warning bells for the last ten years.
In 2005, SHRM President Susan R. Meisinger warned that these demographics present major challenges to America’s workplaces, saying, ”These are serious HR and workforce issues that could undermine the
nation’s global competitiveness and HR must determine how to meet these challenges.” At the same time, SHRM’s own studies showed that only a quarter of HR professionals were convinced that the flood of retiring baby boomers would be a problem for their organization. Not so. The crisis is upon us now and it is far more serious than many in business realize.
This lack of concern by HR professionals elicited a warning this fall from AARP’s Chief People Officer Ellie Hollander, who said that few employers recognized the effect of the brain drain they will suffer when
boomers retire and take all their knowledge and experience with them. Studies in the aerospace industry and manufacturing sectors, two areas likely to be hard hit, back up this concern.
The current economic crisis may have bought companies a few years time to put plans in place. One energy
company saw a withdrawal of requests for retirement among many in management as their portfolios shrank dramatically this year. But this company and others are no longer waiting for their HR departments to take the lead. Instead are bringing in outside experts to set up programs on bench strength and succession. Most organizations should take similar action now.
