Succession and Retention with an Aging Workforce

We hear the terms ‘succession plan’ and ‘retention’ often and usually in reference to a larger talent management strategy within an organization.  The concept of having identified a group of employees or sources of future employees, to replace departing employees is only logical.  A well designed plan will take into account the Canadian workforce environment and build a strategy that leverages the realities.  Employers need to understand where to draw their future talent from, and how to do it better than their competitors.

According to the 2006 Canadian Census data:

  • The median age of the Canadian workforce was 41.2
  • There were 2 million individuals between ages 55 to 64 in the workforce
  • Immigrants made up over 20% of the Canadian workforce
  • Unemployment rate for Aboriginal people was 13.2% versus a rate of 5.2% for non-Aboriginals

What does this mean for succession and retention plans?  Effective plans must consider these four points without sacrificing the ‘overlooked contingent’ and still support organizational needs.  The Census data above can be translated into four strategic imperatives for succession planning.  Organizations need to ask themselves these questions:

  • The Aging Workforce – how do organizations keep aging employees engaged?
  • Knowledge Transfer – if 2 million people will be potentially leaving the workforce this decade what happens to their knowledge?
  • Inclusion Practices – if 1/5 of the workforce is made up of immigrants are we shifting organizational culture to embrace their ideas and perspectives?
  • Outreach – are we reaching all potential sources of talent?  Do we have any community partnerships with Aboriginals or other communities?

Now that you have the answer of how your organization currently views these imperatives, here are some suggestions on how your succession can benefit in future:

The Aging Workforce

You do not need to be a mathematician to realize that if the average age of the workforce is over 40, employers need to recruit replacement talent.  Most employers tackle this via campus recruitment programs, social media recruitment, and management development programs for new hires.  These are all important parts of any talent management solution, but what about workplace environment?

As the generations of employees in the workplace change so do their needs, values, and expectations.  Employers need to ensure that they are working to create an organizational culture that supports the needs of those joining the organization this decade.  For example, graduates today look for different things from employers than graduates 10 years ago did.  Some of the most common expectation include:

  • Flexible work arrangements
  • Mentoring and development programs
  • Frequent performance appraisals and feedback
  • Meaningful Work
  • Up-to-date technology
  • A culture of trust versus oversight

Knowledge Transfer

With a large percentage of employees preparing to leave the workforce every employer should be working to retain as much corporate knowledge as possible before the mass exodus occurs.  The valued employees preparing for their retirement are the holders of vast amounts of expertise.  Effective succession plans must include a methodology for sharing this knowledge.  Here are three ideas for how this can be achieved in your organization:

Offer part-time employment to Retirees: Many retiring employees no longer want to work full time and year round but would be very interested in a more flexible arrangement.  Explore the concept of part-time and seasonal continued employment for this group.  Flexibility is the key.  Perhaps it is a short term stint with defined days of the week.  A schedule of a number of days per month may work for all parties.  Of course, a schedule that allows for lots of holidays, summers off, and short weeks is always appealing.  Work with your retirees to determine what approach meets both their needs and those of the organization.

Work with Impact: The work should not simply be the previous position held pre-retirement.  Continued employment post-retirement is a partnership that needs to be respectful of the fact that the retiring person has already decided to leave their permanent position.  Instead, consider a role in an advisory capacity where the former employee’s knowledge can be spread amongst several departments/projects/activities.  Ask yourself ‘what knowledge does my organization need to gain from this individual?’ and then plan the best arrangement to achieve this.

Recognition: The post-retirement employee is not looking for a career.  They are looking to have an impact on their previous organization.  Recognize their expertise and knowledge – this is why you have asked them to return after all.  It may help to realize that the balance of power between employer and employee has shifted.  The post-retiree does not need employment with the organization; rather it is the organization that has a need to retain its corporate knowledge.

Inclusion Practices

Diversity strategies are prevalent in the workplace. Employers need to be recruiting diverse talent in order to remain competitive.  However, recruiting for diversity without an inclusion strategy can be a costly mistake.  Employees, regardless of gender, race, culture, creed, or sexual orientation need to feel comfortable at the workplace and trust their employer in order to fully engage. What is your organization doing to create an environment of inclusion?

Some employers provide a forum for networking, professional development, recruiting and building relationships with local communities.  This build a relationship between employers and entire communities of individuals which in turn elevates everyone’s understanding of each other’s needs and perspectives on the workplace.  Other employers create a mentoring program that pairs high potential performers from an under-represented group with board members for formal mentoring and career development.  This arrangement ensures that under-represented employee groups feel like they have a voice in the workplace.  Whatever your approach, an investment in inclusion is an investment in corporate success.  It will allow your organization to tap into frequently unheard perspectives and expertise that translate to a business advantage as it will increase the populations who resonate with your corporate messages.

The fact that immigrants comprised 20% of the workforce according to the 2006 Census means that employers who are not reaching out to and working to be more inclusive to these communities will soon find themselves with a shortage of talent.

Outreach

With the non-aboriginal, Canadian-born workforce shrinking, the competition for talent from traditional sources is getting fierce.  From where are your employees being recruited?

The Canadian Aboriginal population is Canada’s fastest growing human resource.  Employers have not done an effective job in the past of engaging this population.  Is your organization working to attract aboriginal talent?

Internationally trained individuals are another potential source of talent.  Finding that first Canadian employment opportunity can be very difficult for new immigrants despite vast qualifications and education.  Is your organization overlooking this population?

Many employers always recruit from the same sources.  This can lead to a continued overlooking of great sources of talent.  Implementing an outreach strategy allows employers access to all of the available talent instead of the only the traditional sources.  An effective strategy includes:

Advertisements in Target Markets:  This is no different than traditional sales.  You need to advertise to the market you are trying to attract.  Post jobs in community newspapers, at community organizations, or with organizations that do outreach such as the YMCA or other not-for-profit groups that assist under-represented communities.

Partnering with Communities: Employers have brands.  From a recruitment perspective the brand is how your organization is viewed through the eyes of potential employees.  Organizations want to ensure that their brand stirs up a positive connection in potential talent.  An effective way to do this is to partner with communities to ensure that your organization puts forward a good impression.  Great ways to partner include sponsoring events, donating products to specific community organizations, or sponsoring a community sports team.

Ensuring your Selection Practices are Bias Free: Traditional recruitment methods that focus on mainstream Canadian cultural values may be causing your organization to miss out on the best candidates.   Be careful not to judge candidates on cultural differences such as handshakes, eye contact, or self-promotion.  Use behavioural based interviewing techniques to ensure you give the candidate a chance to outline everything they have to offer.

What Else?  Don’t Forget the Middle

Many employers have programs aimed at the more senior employees and ones for the new graduates, but what about those in the middle?  Employees aged roughly 30 to 45 are often overlooked in succession plans.  Employers should spend resources trying to retain knowledge from the post-retirees or getting employees to work a bit longer before retirement.  Employers should also allocate resources to the cadre of new graduates to ensure they have a source of future talent and that this talent is knowledgeable enough to step into big roles.  What about the middle?  Those employees in the ‘overlooked contingent’.

This is the first group who will be asked to step into the fold when the mass exodus of retirees occurs.  However, too few employers focus on this group in their succession plans.  The middle or overlooked contingent of employees has corporate knowledge and experience.  They also have been slowed in their rise within the organization due to a lack of movement at the top.  This group represents a relatively small cadre of employees but one that is crucial to the success of an organization.  This group can, if properly developed and supported, be the ideal transition between soon-to-be-retiring and the incoming graduates.

All of the innovations, mentoring and development programs being used to target and nurture new graduates can be applied to this contingent.  Moreover, this group will be the managers of the up and coming talent being recruited in campus recruitment programs.  A failure to invest in the middle can lead to a retention problem if these employees are not prepared for their subsequent roles.  Avoid this with:

Leadership Mentoring Programs: A leadership mentoring program targeting the middle is beneficial to employers in two key ways.  It not only develops this group in preparation for their next roles, it offers a way to begin the knowledge transfer from older employees before they retire.  It will also make this group better managers to the new graduates currently being coveted by most organizations.

Developmental Mentoring Programs: This group will be asked to step up and lead in the very near future.  Why not start a program pairing this group with new graduates to allow them a chance to lead sooner?  This would allow this group to pass on their corporate knowledge to the group that will replace them and help to prepare both groups for their next role in the organization.

One Final Thought….Retention isn’t For Everyone

A good retention strategy focuses on the key talent the organization wants to retain.  A retention strategy does not mean that an organization should seek to retain every employee.   The point is to ensure turnover is manageable given the supply of talent available and the positions that are changing.  Organizations need to listen to exiting employees’ explanations as to why they are leaving and determine if changes or improvements need to be made.  However, organizations also need to realize that some people thrive on change and that not everyone will feel at home in the organizational culture that exists.  A small percentage of turnover is not only normal, but it has a positive impact on the organization with the infusion of fresh ideas, perspectives and experiences.  The challenge is for an organization to determine what their acceptable level of turnover is and to work to ensure that level is not exceeded.

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3 thoughts on “Succession and Retention with an Aging Workforce

  1. I think you bring up several good and valid points. Great post. And I’d add that ageism plays a part with tensions in the aging workforce. A baby boomer might assume that a Gen Xer isn’t experienced enough to author a thought-leadership blog. Or vice versa… a younger employee might think an older employee doesn’t know anything about social media marketing. It’s important to incorporate practices into a succession plan that eliminate age stereotyping – and promote collaboration across all ages. AchieveGlobal just conducted a study on different generations in the workplace and ageism… pretty interesting stuff: http://agestereotypes.com/

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