- 88% of UK finance leaders are already taking steps to mitigate the risk of departing baby boomers currently aged between 51 and 69
- Concerns increase as retirement age for baby boomers gets closer and skilled professionals plan to leave the workforce
- Almost half (45%) of finance directors are increasing training and professional development programmes to mitigate the risk
- New aspirations of Generations X and Y will dictate significant change in the workplace
UK employers are anticipating a significant skills gap when baby boomers retire over the next two to five years and are already taking steps to mitigate the risk. New research1 from leading recruitment specialist Robert Half UK reveals that 74% of finance directors are concerned that the skills gap resulting from widespread retirement of baby boomers will have a negative impact on their organisation over the next two years. An even higher proportion (77%) say that the departure of older workers will have a negative impact over the next five years.
Born after the-Second World War and before 1965, baby boomers are associated with the soaring post-war birthrate and the last generation to experience and take advantage of regular improvements in the socio-economic landscape. Baby boomers also represent a bulge in the workforce that will soon be at retirement age.
Not only will employers need to consider the impact of the skills shortage that this mass-departure will create, but they will also have to accommodate different demands and expectations from younger Generation X and Y workers coming to replace them.
Finance directors in small businesses looking further ahead are the most concerned about losing their experienced baby boomers, with 84% predicting that the departure of older professionals over the next five years will have a negative impact on their business. This compares to 77% for medium businesses and 69% for larger businesses, where the impact of key leavers can be more easily accommodated.
Companies are already preparing for the loss of older workers by increasing training and development programmes (45%), enhancing benefit programmes to retain baby boomers (32%), hiring mid-level talent to develop a skills pipeline (27%), increasing mentoring programmes and knowledge transfer (25%), hiring senior-level talent to replace retiring employees (22%) and offering flexible and/or part-time work arrangements to attract and retain baby boomers (16%). Only one-in-10 (10%) finance directors said that they did not foresee a potential skills gap.
Phil Sheridan, UK Managing Director of Robert Half, commented: “Employers are facing a profound shift as baby boomers look to exit the workforce, compounding the existing skills gap. With employers challenged in finding the skills they need to grow their businesses, establishing a succession plan with a robust attraction and retention strategy will be critical to succeed in today’s economy. In some cases, offering project or interim contracts to employees nearing retirement will open up positions for aspiring managers to move up the career ladder, while still operating under the guidance of a mentor. However, it is important to recognise that younger generation X and Y employees will expect different social contracts with their employers and that this should form the second phase of any baby boomer transition planning.”
Robert Half offers the following strategies to retain retiring baby boomers’ skills and experience within the company:
- Offer a phased retirement. Phased retirement options allow boomers to retire gradually while providing time for them to train successors. These arrangements can include consulting, part-time work, flexible hours, telecommuting or specialised project work.
- Don’t just pay attention at the top. Don’t just plan for senior-level vacancies. Having a capable successor for key roles at all levels is important.
- Prepare future leaders. Work with employees with leadership potential through mentoring, additional career development or education, and ensure they can see a viable career path within your organisation.
