The working population demographics show a quickening pace of retiring employees with 83% of employers reporting a significant number of employees at or approaching the traditional retirement age of 65. One reason for the increase is attributed to the millions of baby boomers approaching retirement.
Is Your Company Prepared for the Approaching Retirement Wave?
Long-time employees often fulfill leadership positions and possess an invaluable wealth of knowledge and experience from their tenure with their company. If you don’t take steps to preserve their knowledge and prepare for a transition to a less-experienced and smaller workforce, you could experience a leadership crisis, particularly in small to mid-sized companies.
There are precautionary actions you and your HR team can take now to prepare for the unprecedented number of senior staff retiring in the coming years to mitigate, or even completely avoid, negative consequences of their retirements.
Gather and Share Information
Start by gathering data on your company’s employee demographics including the anticipated number of retirees over the next several years. Determine which business lines and customers will be most affected. Share this information with the necessary departments and managers and implement strategies to capture and retain senior staff’s knowledge about the business and its customers. Determine how best to notify customers of any staff changes and be prepared to address any customer concerns about the transition.
Seek Ways to Defer Retirements
You may also consider working with department managers and your HR team to engage in an open dialogue with soon-to-be retirees about potential ways to delay their retirement. Some ideas to discuss are a decrease in hours, flexible or telecommuting work arrangement or modifications to job responsibilities. You should convey how important the employee is to the company and your desire for them to remain with the company a bit longer.
Develop a Succession Plan or Update an Existing Plan
If you don’t have a corporate succession plan, develop one. A succession plan ensures that retiring executives, managers, and other key personnel will be replaced by employees who are trained and well-prepared to assume those key roles. When identifying who should fill these roles, consider the following: What special attributes and competencies will those individuals need? Are your preferred choices willing and able to actually accept the responsibility? Are there other members of your leadership team who need to know and agree to it? If you have a succession plan in place, periodically review and update it so that it is current and meeting your company’s needs.
Small, closely held companies usually do not have the same level of succession planning in place that is common in larger corporations. Additionally, smaller companies may face bigger challenges with their succession planning because fewer people may be readily available with the special skills necessary to be effective leaders. These issues can create special challenges for smaller companies when it comes to succession planning.
Create Ways to Impart Knowledge
Encourage the creation of programs that bring senior leaders and junior managers together to identify and pass on the knowledge and skills needed to hold senior level positions. These learning opportunities are many and include leadership development programs, classroom training, online training, mentoring and coaching. The goal of these programs and training should be to include a well-rounded balance of executive training (leadership development, team building, communications, budgeting, program development, etc.) as well as a thorough knowledge of the general day-to-day activities of the role. As the manager in training progresses, the company can increase their opportunities to deal with progressively more difficult scenarios such as dealing with conflict or delivering employee feedback. Remember to give them as much practice as possible so they can become as effective as your seasoned executives.
Develop or Update the Company’s Vision Statement
Finally, have your current senior leaders create a vision statement that the company leadership can embrace in the future or update an existing vision statement as needed. Once completed, encourage future company leaders to use it when making decisions about succession planning and future strategic decisions.
Contact the Experts at Smart HR for More Information
By employing the steps suggested, you can be proactive in preparing for the approaching retirement wave and weather the storm! The HR consultants at Smart HR are readily available to assist you with any and all the aforementioned steps. Whether you need guidance on developing a succession plan for your small business, gathering data on your company’s employee demographics or developing a mentoring program, we are here to help. Contact us today for more information.