Filling the baby boomer vacuum

Abstract

Millions of people are retiring from the workforce in the next two decades. In the U.S. and Europe Union birth rates have been plummeting and a workplace generational gap is widening. Using project management to facilitate the transfer of knowledge and skills from seasoned employees to incoming generations will ease the way.

“As aging baby-boomers begin retiring, the effects on the overall economy and on certain occupations and industries will be substantial, creating a need for younger workers to fill the vacated jobs, many of which require relatively high levels of skill”.

– Arlene Dohm, Office of Employment Projections, US Bureau of Labor Statistics

Immediately following the Second World War the baby boom began in 1946 and continued through 1964. During those 19 years, in the USA alone, 76 million people were born. According to assessments based on the U.S. Census, an average of 4.6 adults turned 65 each minute in 2007. In 2025, an average of 8.0 adults will turn 65 each minute (see Exhibit 1). The demographic shifts coming to North America, and Europe also, in the next two decades will be profound. How organizations choose to identify their highest priority talent and knowledge management concerns today, and focus on the greatest potential problems will play a significant role in their long-term survival and growth. A critical component in facilitating this transition is the deployment and support of project management across the business. Only by embracing a shared platform for implementing meaningful change, thereby bridging gaps between levels of subject matter expertise, will organizations be able to ride the wave of this workplace transformation.

Source: Tay K. McNamarra, Ph.D.

Exhibit 1 – Source: Tay K. McNamarra, Ph.D.
Boston College – Center on Aging and Work

Even with advances in healthcare, the “retirement” age, as calculated by the US Bureau of Labor Statistics, has remained fairly stable over the last 20 years. There are signs that it may be starting to increase, but certainly not enough to offset the number of people projected to leave the workforce in the next 20 years. As they walk through the door and into their retirement years, they are taking with them, not only subject matter knowledge and skills gained over a lifetime of employment, but also a vast array of implicit knowledge gained through navigating the work environment and resolving business issues. The person who discovers a business process shortcut and refines it over years, without sharing that knowledge in a meaningful way, may be crippling the effectiveness of that process the day they leave. Depending on the realm of expertise, the implied knowledge of an organization can represent up to 70% of its competency assets according to Canadian researchers. The issues revolving around the identification, the representation, the sharing, the validation, the reuse and the evolution of valuable knowledge are thus critical for organizations. The coming crisis is not one of talent management; rather the vacuum created by departing baby boomers is forcing a market-wide talent re-evaluation.

Up to 42% of the knowledge that professionals need to do their jobs comes from other people's brains—in the form of advice, opinions, judgment or answers.
Source: Delphi Group

In the corporate world many professional occupations also have a disproportionate number of older workers, particularly those requiring postgraduate degrees. The opportunity costs for these high-wage earners leaving the labor force is greater than for most other occupations. Only one third of businesses in the U.S. have analyzed their workplace demographics and made projections about the impacts of retiring workers. Less than a quarter of businesses in Europe have considered the implications of their retiring workers. Many organizations are only now beginning to ponder the implications of their most seasoned employees leaving, while facing the demands of a new generation of employees who are seeking a higher degree of access and involvement in operational decision-making. These new workers also come with their own demands; they are not satisfied with sacrificing the lives for work, as they arrive in the workforce seeking a work/life balance. This new generation also represents a significant departure from the more pervasive and homogenous mindset of the “baby boomers,” and they are not afraid to highlight that difference.

Strange as it may seem, the needs of one could be married neatly to the demands of the other, with appropriate planning and forethought. If we need to prepare the workers of tomorrow for more senior roles, far earlier than in the past, why not create an environment in which the exchange of learning through structured coaching and mentoring is the order of the day? This work should be conducted in and around the needs of the business to ensure relevancy and engagement. It should also be conducted in such a way that the transfer of knowledge and skills has an explicit return on investment. In some organizations this approach is already underway. The answer lies in the way in which projects are structured so that knowledge transfer is an explicit component which carries with it clear measures and standards of success.

The Tennessee Valley Authority (TVA) is America's largest public power producer. Through a network of 158 municipal and cooperative power distributors it serves 8 million customers, across 7 states, through the efforts of 13,300 employees. With a capacity of 31,000 MW delivered via 3 nuclear plants, 11 coal-fired plants and 29 hydroelectric dams the TVA faces one of the most complex workforce transitions in the coming years. The average age of their workforce is 47 and fully one third of which will be eligible for retirement within the next five years. At the TVA they found that risk was greatest in specialized technical positions and in problem-solving strategies. This process also revealed that current procedures were sometimes weak; there was also a reliance on experienced personnel rather than strong processes and detailed plans. To combat the risk of losing a significant amount of tacit knowledge the TVA has developed Knowledge Retention Program. Several of the core ways in which they are installing this program are through coaching, shadowing, mentoring and apprenticeship programs. These processes link more junior employees with more seasoned employees and stress opportunities for multi-skilling and crosstraining in the context of business need-driven projects.

According to the Bureau of Labor Statistics, more educated workers have a tendency to stay in their careers longer. Factors producing this affect are: greater job satisfaction, the costs of lost income in leaving the job, strong social connections, as well as other factors. At the same time, however, these workers often have better pension and health benefits than other workers, enabling them to retire younger. Something needs to keep their attention while the exchange of learning takes place. The difficulty is that for many people knowing how to transfer their knowledge to others is a skill they may not possess. They need to, “show what they know.” Strategic workplace initiatives that are project-based are key targets for this kind of in-place transfer of knowledge. These initiatives are highly visible and, as such, will demand more from their participants in a public domain.

As mentioned earlier, the new generation of employees is looking to make a significant impact in the workplace while many of the soon-to-be-retiring generation are looking to leave a positive legacy. In the European Union however, a paradox exists: many jobs lie vacant, waiting to be filled, while many European young people remain unemployed. The European Commission puts it bluntly:

The statistics are bleak. More than one out of ten young people aged 25-29 are unemployed –10% in Denmark, Ireland, and the Netherlands and over 25% in Finland, Poland and Slovakia. One in six young Europeans drop out of school early, and yet jobs are hard to find if you're underqualified, and career structures are precarious. In total, young people between 15-29 represented almost 40% of the total unemployed in 2006 in the EU [and that figure increased in 2007.]

– “Fight against unemployment”, European Commission website

The EU is directly addressing this issue through a three-pronged approach: (1) member countries are urged to step up their efforts to reduce school drop-out rates, improve the job prospects of school leavers and forge stronger links between business and education, (2) a series of “Job Days” is being promoted to encourage workers to seek employment outside their home countries, and (3) tightening up the rules on internships so that current abuses are minimized (such as no-pay internships or few paths to full-time employment). In all three cases the EU is missing a significant lever to improve performance—the integration of project management into the knowledge and skill transference mix. This would reach beyond internships to more fully integrated paths to careers. But it requires engaging retiring workers in the design of effective and meaningful solutions.

The Center on Aging & Work conducted the National Study of Business Strategy and Workforce Development in 2006. In this study they found that these two groups of employees (retirees and newcomers) had areas of common ground which could serve the basis for meaningful, relationships and exchanges. In Exhibit 2 you can see the area of that common ground. The implication of this commonality is that by engaging these seemingly widely divergent employee groups in endeavors that stress the need to take initiative, organizations can reap significant returns. It is therefore incumbent on current organizational leadership to seriously consider how they can use the needs of the business today as a conduit through which the learning of the past may be transferred to the leaders of the future.

Areas of Common Ground in Workforce Generational Divide

Exhibit 2 – Areas of Common Ground in Workforce Generational Divide

“The technology industry has demonstrated that high technology, when used properly, is a key competitive advantage that can positively impact the long-term growth and success of organizations across our economy, from financial services and healthcare, to transportation, manufacturing, education and scores of other industries,” said John Venator, president and chief executive officer of CompTIA. “But a skilled and experienced workforce is required to assure that technology is used properly.” No amount of technology can fill the gap of lost human capabilities. Software companies and hardware companies alike are realizing this on a regular basis. In order maintain a skilled workforce, it is essential to focus on the transfer of knowledge through business result-oriented actions such as projects.

A large software producer has launched simultaneous programs to connect senior research fellows with incoming software engineers in order to “bake” quality into their efforts and fight the disconnections and errata that creep into code when many resources work on sections of a software project in isolation. At IBM, under Louis Gerstner, a program called Extreme Blue was created that even precedes employees coming on board. Its focus was on having prospective interns (and eventual employees) work on critical projects with senior researchers to experience the value of joining IBM and consider a career with the organization. In this case the bridge from the past to present was being created as part of a worldwide talent management effort, not driven solely by a concern to foster and support knowledge management.

Critical to this project-based approach to workplace change is the initial identification and prioritization of the most germane issues to business performance. Conducting an organization-wide assessment can galvanize all groups of employees to that end. During this project teams of cross-generational employees can identify and probe the concerns of the business and consider how they should be resolved. Jointly they would then determine whether the concern reflects a problem to be corrected, a choice to be made, an action to be taken, or a project to be initiated. They may also discover that more separation and clarification of issues may be needed. Based on this sorting of issues, the project teams would reflect on the relative importance of the issues to the business (based on supporting guidelines driven from strategic statements, functional strategies, business plans, operational plans and financial data), and would prioritize them in order to maximize their impact. Correspondingly, the senior leadership of the business might choose to turn the cross-generational teams loose on the organization's previously established strategic project portfolio.

The key skill in organizing this effort is without question, project management. The ability to define goals, structure the work, assign responsibility, schedule resource and activities, and manage risks is critical. Co-mingling longstanding project managers with newer project associates will facilitate the transfer of best practice methods and techniques. Another aspect of project management as a method for change is how scalable it is. It may be applied to simple issue resolution and to large scale, organization-wide, culture change projects. In every case it will be necessary to identify which process steps will be useful. To resolve a complex and poorly understood concern may require the use of all the basic steps of a problem analysis or decision analysis process, or even several processes (for example, finding the root cause of a problem may then lead to choosing the best way to fix it, and making sure the solution is implemented successfully may require effective risk mitigation techniques). In each case the cross generational teams would be expected to determine what is already known about the concern and the amount of additional analysis needed for resolution.

Other concerns may require only those techniques needed to gain understanding and commitment to action. For example, alternatives may have already been offered for a capital acquisition but objectives may not be fully understood. Or, a cause may have been accepted as most probable for a market failure of a new product launch but it may still need to be confirmed. In all cases, the work will require project planning and guided implementation.

Clear, shared, systematic, approaches for making thinking visible through project management are critical to ensure the success of this workplace transformation. Each project should be designed to meet the demands of the issue to which it is being applied. Each project should be meaningful to the business. Each project should consistently apply project management fundamentals. To meet these criteria each project should also be founded on the principles of best-practice thinking and should engage, through meaningful questioning approaches, the experience of all participants and not only those with perceived subject matter expertise and domain mastery. When you consider the projects under way in your organization, do they meet these criteria? If not, your employees, regardless of generation, are experiencing impediments to the ready exchange of ideas in their daily work. Impediments that will be amplified as more senior employees retire or withdraw from the workplace.

At the individual level, knowing how to transfer one's own knowledge remains challenging. Knowledge-transfer aptitudes and structuring competencies are not innate. Moreover, those who excel in their field are not necessarily aware of the manner in which they perform their work. Tacit knowledge is challenging to externalize. Most of the time, experts use their knowledge “live” and rarely have the opportunity to consciously reflect upon what they are doing. Basically, they cannot verbalize what they know. Critical projects could serve as the background for an effective transfer of knowledge and skills required for the long-term health of organizations. By forging a strong working relationship between the incoming and outgoing workforce generations this changing of the guard may unleash an era of unexpected innovation. The key component is to create a foundation of commonality through which this transformation may occur. Systematic, rational and visible approaches for exchanging ideas and addressing meaningful business issues through the application of project management are the answer.

References

Boyles, E. (2006, September). Industry best practices for managing an aging work force, School of Nuclear Knowledge Management: Annual Technical Meeting on “Managing Nuclear Knowledge. The Abdus Salam International Centre for Theoretical Physics.

Delong, D. W. (2004, December) Lost knowledge – Confronting the threat of an ageing workforce. Oxford, United Kingdom: Oxford University Press.

Dohm, A. (2000, July). Gauging the labor force effects of retiring baby-boomers. Monthly Labor Review, 17-25.

Employment and social rights - Fight against unemployment - “EU pushes investment in youth”. (2007, May 09). Retrieved on January 4, 2008 from http://ec.europa.eu/news/employment/070905_1_en.htm

Kazennov, A. (2004, November). Preserving and transferring knowledge in the nuclear power industry. International Atomic Energy Agency Seminar, Trieste, Italy.

McNamarra, T. K. (2007). Age and the Labor Force. Boston College Center on Aging and Work. Retrieved on March 28, 2007 from http://www.bc.edu/agingandwork

Pitt-Castouphes, M., Kane, K., Smyer, M. A., & Shen, C. (2006, Dec. 12). The benchmark study: Executive summary – Phase I of the national study of business strategy and workforce development. Boston College Center on Aging and Work. Retrieved on March 28, 2007 from http://www.bc.edu/agingandwork

Population Reference Bureau. (2007) Fertility Rates for Low Birth-Rate Countries, 1995 to Most Recent Year Retrieved on January 12, 2008 from http://www.prb.org/pdf07/TFRTable.pdf

Schweitzer, T. (2007). Retiring baby boomers expected to hurt companies: report. Retrieved on April 19, 2007 from http://www.reuters.com/articlePrint?articleId=USN2327023120070327

Spencer, G. (2001, October). The direction of fertility in the United State. Alexandria, VA: Council of Professional Associations on Federal Statistics.

Tennessee Valley Authority. (2007). Knowledge retention: Preventing knowledge from walking out the door an overview of processes & tools at the Tennessee Valley Authority. Retrieved on March 28, 2007 from http://www.tva.gov/knowledgeretention

Ware, J., Craft, R., & Kerschenbaum, S. (2007, April). Training tomorrow's workforce. Training + Development, 58(4) 58-60.

© 2008, Andrew C. Marshall
Originally published as a part of 2008 PMI Global Congress Proceedings – Malta

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