This article was updated on Aug. 29, 2018.
According to the Insured Retirement Institute, 10,000 baby boomers are expected to retire, on average, each day in the United States through 2030.
The retirement patterns of baby boomers show a lot of senior members of the workforce — some of whom possibly work within your organization — are leaving many valuable gaps to fill. But with clear, qualified successors waiting in the wings and advanced planning, disruptions due to talent loss can be minimized, reducing the impact that those losses can have on your organization.
Business leaders can use data and analytics to forecast the potential timing and impact of attrition due to older workers retiring, including the cost of disruptions due to talent loss. And having that information in advance can help finance leaders plan for any possible bottom-line impact.
Partnering With HR to Predict Trends
Finance offices are no longer the only ones using data analytics to predict future outcomes. Savvy HR leaders are well-versed in workforce analytics, which applies statistical models to worker-related data, allowing them to understand human capital strengths and challenges. When finance leaders partner with HR, together they can use data and analytics to establish a baseline for measuring risk across the organization and clearly identify and understand how human capital needs may affect production and the bottom line.
For instance, trend analysis programs can determine potential rates of attrition due to retirement across your workforce by measuring workers' ages, health, length of service and other factors. Such programs can also help to reveal whether potential leaders will be available to fill the shoes of retiring employees, as well as the possible costs of moving forward with vacant leadership positions and onboarding — or upboarding — new leaders.
Planning to Avoid Disruptions
When finance and HR leaders work together to understand the upcoming workforce needs of their organizations, they can plan ahead to prepare for potential disruptions. For instance, Bloomberg notes that when NASA leaders realized several years ago that many of the senior engineers who worked on the lunar landing projects were retiring, they launched a knowledge transfer program in which Apollo-era engineers met with new engineers to share their experience and expertise.
Defense and aerospace company BAE Systems adapted the NASA approach to implementing its own knowledge transfer program. When an employee with "deep institutional knowledge" plans to retire, BAE forms a knowledge transfer team of about six employees of varying levels of experience. In regularly scheduled meetings, the team members share tasks, start mentor relationships and exchange valuable institutional knowledge. The program has been successful so far and BAE has expanded it internationally.
As global retirement patterns become reality in your organization, keep in mind that the loss of talent isn't just an HR problem. It's an organizational challenge that can have a financial impact — but you may be able to smooth the negative effects of focused analysis and leadership planning.
Subscribe to SPARK updatesSign up