The disappointing December US Jobs Report which pointed out a slight slowing of unemployment (falling to 6.7%), also showed a shrinking labor force (347,000 less in December amid the addition of just 74,000 new jobs). Recent articles show that some economists and Wall Street pundits believe this is partly due to growing retirement rates for aging baby boomers, a demographic group which still makes up about one-third of the workforce. The Department of Labor estimated that 76 percent of the job decline was made up of people over the age of 55 who say they do not want to work.
While there have been competing reports about baby boomers planning to work longer, partly due to financial need and partly due to generally better health and continued engagement with work, organizations are and will continue to lose not only these experienced workers, but also a substantial amount of the knowledge they have gained and contributed during their careers. It’s just a matter of time.
In the past several years, as the trending chart shows below, news about unemployment has overtaken trends about retirement, the coming brain drain – more aptly termed a “knowledge chasm” in KM circles. The Google trend chart shows the significant differences in interest over time about “retirement” – blue – vs “unemployment” – in red.
Are the two related?
During the recent, global economic downturn, a number of companies offered incentives for early retirement—and more are continuing even as the economy recovers. As early as 2009, two years before the oldest baby boomers started celebrating their 65th birthdays on January 1, 2011, the National Bureau of Economic Research published a University of Chicago study that found there was no impact between incenting retirement and the reduction of unemployment of the young, pointing out the issue that not only are we facing a Knowledge Chasm, there may also be a compounding factor – fewer people employed to do the work. The study found:
“…no evidence in favor of the common claim that there are a fixed number of jobs into which the young will move when older workers retire…. In short, these results provide no evidence that inducing older persons to leave the labor force frees up jobs for the young. If anything, the opposite is true; paying for old persons to leave the labor force reduces the employment rate and increases the unemployment rate of youth and of persons in their prime age working years.”
Are we ready?
A joint poll conducted by the Society for Human Resource Management (SHRM) and AARP in 2012 showed that:
“many U.S. organizations are largely unprepared for the brain drain and skills void that talented, retiring older workers will leave. Roughly 71 percent of those polled still have not conducted a strategic workforce planning assessment to analyze the impact of workers 50 and older who will leave their organizations.”
Not only are we facing the prospect of up to 10,000 retirees every day, and potentially fewer people being hired to do their work, companies—which will be arguably more reliant upon the knowledge of those who are retiring—are not prepared to avoid the coming knowledge chasm. Knowledge has a compounding effect: Lack of it, combined with fewer people to do the work, may create a perfect storm of disastrous results.
What to do
On the other hand, knowledge amplifies the work that employees do, and can enable fewer employees to be more effective. Ultimately, enabling all of your employees to access the Long Tail of Collective Enterprise Knowledge—including the knowledge created and held by retiring baby boomers—will increase the value of each and every employee’s effectiveness, and lead to much higher contribution of this asset to the value of your company overall.
Here are a couple of basics to start thinking about:
First, what will motivate your soon-to-retire baby boomers to contribute their knowledge? As a basic tenet, people want to contribute, but they generally will not unless they are given a context and an audience. Otherwise, they know their efforts will likely be wasted—they will not trust that it will be found again, unless your organization is among the leading few who are finding ways to connect their employees with knowledge, in real time, and within their own context.
Second, many organizations are using collaboration tools – Yammer, Salesforce Chatter, ECMs such as SharePoint, alumni communities and more – which is right and necessary; however, knowledge still becomes locked away in these systems and not available to most employees. Alumni social networks, for example, will provide an audience and a context, but this is just a beginning piece of the puzzle. How will the right alumni be located in the community?
Even more important, however, is the issue of prediction: It’s impossible to predict all future knowledge needs, today.
You’ll need to think about more than the technology you use to capture and connect people. What are the processes you’ll change or create to ensure that your Generation X and Millennials can utilize the knowledge that you don’t know will be needed when, but which your baby boom employees have?