I recently came across a stunning statistic from the Pew Research Centre: for the next 19 years, 10,000 Americans will turn 65 years old every day, and (presumably) retire shortly thereafter.
Australia faces a similar predicament: In the 12 months to June 30, 2012, the number of people aged 65 years and over increased by 134,700 people, representing a 4.4% jump.
While this greying of the baby boomer generation certainly has implications for health care and social policy (and for me personally, as one of those eventual retirees), it may have even more significance for the nature of the workforce and the job of the manager.
First, there will be a shortage of workers for key jobs. This may sound hard to believe at a time when US unemployment hovers at around 8% and some European countries, namely Spain, are suffering through 25% unemployment. Yet as millions of boomers leave the workforce, there are far fewer younger people to replace them. In the US trucking industry alone, for example, it’s estimated that there will be a shortage of more than 100,000 drivers in just seven years. Moreover, these replacements will have far less experience and know-how, and will need considerable training to get up to speed. This will lead to significant gaps in areas such as engineering, petrochemicals, utilities, defence manufacturing, education, health care and air traffic control.
Perhaps equally significant for managers is that these new workers – no matter how many of them there are – will operate differently than their predecessors. According to Dan Schawbel, who has studied millennials extensively through his consulting firm Millennial Branding, members of this younger generation differ from boomers in a number of ways: They want immediate feedback and attention, and prefer the instant gratification of texting to the slow response of email; they prefer casual attire so they can ”be themselves” at the office; they want more flexibility with scheduling and work location; they value the nature and importance of their work over pay and benefits; and they want to be involved in strategy, not just told what to do. Some recent studies also suggest that growing up with so much media and technology is creating a generation of people with shorter attention spans and less willingness to dig deeply into subjects.
Given these implications, managers (whether boomers or millennials) need to take steps now to deal with the new workforce. Here are a few thoughts about what they can do:
Conduct a demographic risk analysis of your team or organisation
Not long ago I worked with a software firm that supported hundreds of legacy applications for the telecommunications industry. When they created a long-range plan to roll up the applications, they realized that many of the experts – the only ones who knew the code – were going to retire before the planned integration dates. The management team revised the entire plan so that they wouldn’t get caught without the needed expertise.
Accelerate training and transition planning
Most companies have some sort of yearly process for assessing talent and creating succession plans, but they don’t follow through on these strategies with a sense of urgency. If, however, you realise that much of the knowledge and skill in your organisation will be walking out the door – and not returning – in just a few years, it might change your perspective and motivate you to act.
For example, I recently made a presentation about best practices in acquisition integration to a company that was struggling with the aftermath of some recent deals. What’s regrettable is that many of the best practices I discussed had already been developed at the firm – and then lost as people retired.
Create an environment in which the new guard can thrive
Finally, build on the experience of high-tech and startup firms and begin creating a different work environment – one with more flexibility, transparency, engagement and fun. As my colleague Robert Schaffer wrote in a recent blog post for hbr.org, we need to “make the job a game” so that millennials commit the same amount of energy to their work that they do to leisure activities. In the coming competition for talent, this might be one of the key strategies to creating a winning organization.
The baby boomer generation, of which I am a charter member, has held sway over the workplace for much of the past 20 years. But the millennials are making their inevitable way into the workforce – and they may already be here. In order for our organisations to continue to thrive, we need to get ready now.
Ron Ashkenas is a managing partner of Schaffer Consulting and a co-author of ‘The GE Work-Out’ and ‘The Boundaryless Organization’. His latest book is ‘Simply Effective’.
Harvard Business Review, © 2012 Harvard Business School Publishing Corp.