How many Baby Boomer employees (those born between 1946 and 1964) will be leaving your organization in the next five years? When retiring employees clear out their desks and walk out the door for the last time, they often leave with fond memories — as well as vast amounts of intellectual property stored in their brains.
Unfortunately, few organizations take the time to “debrief” retiring employees before they exit. Increasingly, companies are rethinking their approach and deploying innovative work arrangements that provide for the transfer of invaluable intellectual capital before employees retire. This can include:
- Four-day work weeks;
- Work from home arrangements;
- Job sharing;
- Part time work; and
- Consulting and special project assignments.
Slowly easing retiring employees towards the exit sign can ensure that your company retains its intellectual property, as well as help employees smoothly transition into the next phase of their lives. With a proactive plan, important information and processes can be conveyed effectively from retiring employees to those remaining.
But that’s not all. Here are some more considerations:
Phased retirement plans can avoid compromising relationships with customers and clients. Understanding your clientele’s expectations and responding accordingly can make the difference between financial success and failure. Employees often establish long-term relationships with customers and clients that are based on trust and mutual respect. When an employee with decades of experience leaves an organization, the effect on the customer base can be dramatic. People inherently dislike change. If a connection with an employee is suddenly broken, customers may take it as a sign to move their business elsewhere.
You can delay hiring and training expenses. Finding suitably qualified candidates for vacancies can be time consuming and expensive. Once a candidate accepts the position, the hard work really begins. Depending on the size of your company, teaching a new employee the “ins and outs” of the company’s processes and technologies can take months or sometimes years to accomplish. That is assuming that the employee doesn’t leave for a more promising opportunity before their months or years of training are over. If that happens, the process begins over again, much to the frustration of staff members asked to train yet another new employee.
Keeping retiring employees engaged in some way is far less costly than it might have been in previous decades. People are living longer, healthier lives. With advances in the medical field, as well as an increased awareness of the dangers of certain lifestyles, life expectancy continues to increase for most segments of society. Since employees expect to live longer, they are taking better care of themselves. Healthier employees result in lower health expenses and less sick time taken.
At the same time, due to business technological advances, it’s now easier to have older employees in many jobs work from home on a part-time basis. And as noted in the research report described in the right-hand box, today’s older people don’t necessarily want a leisurely retirement where they don’t work at all.
Older employees are less likely to waste time on social media and other Internet distractions. While some members of younger generations spend hours glued to their phones and other devices, older employees may embrace social media, but it does not generally control them. According to various studies, businesses are losing billions of dollars a year as a result of employees spending work hours online. Mature employees are less likely to spend hours updating their statuses and tweeting at work.
Bottom line: Offering Baby Boomers a phased exit plan allows exiting baby boomers to gradually prepare for retirement while allowing employers to maximize the value from the employees’ efforts — often at lower effective salaries. If structured correctly, alternative work options will not limit the potential for younger employees to advance. In fact, such arrangements may actually accelerate the advancement of younger employees since they are able to fully incorporate the lessons learned from the previous generation’s experiences.
McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.