The aging workforce issue has reached top-of-mind awareness among HR professionals in major corporations, but no single company has developed or deployed a comprehensive solution dealing with the entire problem. That conclusion is based upon the results of the latest Aging Workforce Survey conducted among HR executives in Fortune 1000 companies by Ernst & Young. The follow-up survey was conducted by E&Y approximately 18 months after their initial survey about HR’s response to the aging workforce challenge and the results were released in October.
Among the survey’s key findings: The number of respondents citing that retaining key employees and maintaining intellectual capital were the human capital issues of most concern rose from 38% in the prior survey to 68% in the current survey. Also 70% of respondents in the recent survey said that the impact of the aging workforce will reach beyond the members of the C-suite to members of middle management, compared to 48% in the last survey.
One of the gaps noted in the survey is around succession planning activity. The survey noted that senior-level executive positions is where 75% of HR executives say they are focusing their succession planning time and efforts, while 41% of respondents say that the retirement of middle managers is the area most likely to be affected by the brain drain and skill shortages. According to the survey, lack of succession planning for middle managers is resulting in unplanned turnover and higher recruiting costs.
“One of the key findings in the survey is that middle management is going to be more affected by the retirement of the baby boomers, but succession planning stops at the top executive levels,” says Bill Arnone, principal with the Ernst & Young Employee Financial Services Practice. “There’s been a great deal of slimming down at the middle management level, so now those employees play a vital role in company operations, and because there are fewer of them, any loss can impact wisdom continuity.”
While the survey reveals that companies are aware of the potential impact of retiring middle management boomers, few have engaged in formal workforce planning activities, so some retirements are catching HR executives by surprise.
“I think one of the biggest lessons from this survey is know your workforce,” says Arnone. “Companies are having a tough time knowing how many workers are likely to retire. They need to move beyond anecdotal evidence, so they aren’t finding out about the loss of a valuable older worker at the eleventh hour.”
Another key survey finding was that most HR executives have engaged in some planning and solution-driven activity surrounding the aging workforce issue; however, Anone says that in looking at the survey responses, no one company or HR leader has created a comprehensive solution for the entire challenge. That leads him to believe that the position of competitive leader is up for grabs.
“I really didn’t see that any one company has developed an encompassing strategic model to deal with the aging workforce issue,” says Arnone. “The company that figures it out will have a clear competitive advantage.”
-This article has been corrected from an earlier version.