UK employers anticipate a ‘significant’ skills gap as baby boomers retire over the next two to five years and are already taking steps to offset the impact that this will have on business, reports Robert Half UK.
Research by the recruitment firm suggests 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, while 77% expect the departure of older workers to begin affecting them over the next five years.
Finance directors in small businesses looking further ahead are the most concerned about losing their experienced baby boomers, with 84% anticipating a negative impact on their business. This compares to 77% for medium-sized businesses and 69% for larger businesses, where the impact of key leavers can be more easily accommodated.
‘Baby boomers’ is the term applied to those born between 1946 and 1964, who are associated with the soaring post-war birthrate. The last generation to experience and take advantage of regular improvements in the socio-economic landscape, they also represent a bulge in the workforce that will soon be at retirement age.
The Robert Half report notes that not only will employers need to consider the impact of the skills shortage created by this mass-departure, but they will also have to accommodate different demands and expectations from the incoming younger Generation X and Y workers that replace them.
Many UK companies are already preparing for the loss of their older workers; 88% of finance leaders are already taking steps to mitigate the risk. Only 10% said that they did not foresee a potential skills gap. Companies are responding with various contingency measures, of which the following are the most popular:
- 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%).
- Offering flexible and/or part-time work arrangements to attract and retain baby boomers (16%)
“Employers are facing a profound shift as baby boomers look to exit the workforce, compounding the existing skills gap,” comments Phil Sheridan, UK Managing Director of Robert Half. “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.”
For companies keen to hold on to their older workers and retain their talents, the firm offers a three-point plan:
- 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, or plan for senior-level vacancies only. 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.
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