March 20, 2017 – The mass migration of baby boomers from the workplace is beginning. While their full departure will take years to set in, the transition is unquestionably underway and it is creating a significant puzzle for every company and those in charge of staffing them to solve.
“The dilemma is twofold,” said Paul Croteau, managing partner of talent management solutions provider Legacy Bowes Group, who shared his latest thinking on the shifting demographics predicament by outlining eight strategies to stay ahead of the problem.
“First, it is well known that the incoming new generation of leaders, (typically in the ages of 35 to 49), do not have the skills or experience of more senior leaders,” said Mr. Croteau. While this to be expected, recent research conducted by i4cp, a Florida-based research firm, identified that younger generation leaders were lacking skills in five critical leadership areas. These included critical thinking, the ability to create a vision and engage others, the ability to collaborate with other areas of a business and manage change, overall leadership and understanding how different business sectors needed to work together.
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“Second, my own professional experience suggests that younger leaders have higher expectations with respect to salary and compensation,” Mr. Croteau said. “They are also more demanding with respect to perks and other benefits such as vacation, vehicles, flexibility and executive education. As well, many young people are impatient, relying too much on their graduate education instead of being willing to engage in a longer apprenticeship type of career model.”
In other words, the latest generation of leaders ‘coming of age’ want to leapfrog up the career ladder and if opportunities are not found in their current employment, they won’t think twice about moving to another company.
Millennials Still In Their Formative Years
The vast majority of Millennials see ongoing skills development as an important part of their future careers – and in that respect, they are light years ahead of previous generations who stepped onto the corporate treadmill for a long, arduous and, frankly, unpleasant jog to the future. Millennials, thank heavens, are different. They see personal development as so important that many say they would pay for it personally and give up their own time to expand themselves by establishing new skills baselines. And, they come hard-wired with innate intellectual curiosity, which allows them to learn in real-time at a faster rate. Contrary to the lazy label, the data pouring in about Millennials actually tells a different story. They work as hard, if not harder, than other generations. But happiness and self-fulfillment – that’s really what matters to them ….. Here’s some further reading from Hunt Scanlon Media.
Millennials Choose Career Over ‘Being Boss’
Instead of climbing corporate ladders, Millennials are focused on learning technical and personal skills to ensure long-term career security as they seek to build a ‘career for me.’ Millennials learn quickly and seek out intellectual stimulation. As a result, they view their work roles as steppingstones on a continuous learning path.
So, where does this situation leave current business leaders, especially since it’s well known that a large percentage of the companies they oversee have no succession planning strategies in place? And what solutions would help to rectify this situation? Mr. Croteau believes that working with an external expert and undertaking the following strategies could provide significant benefit to any organization.
Here are his eight recommendations for replacing retiring baby boomers in a thoughtful manner and a possible approach to succession planning as seen through the lens of two top executive search professionals:
1) Demographic survey – conduct a survey of all your employees with respect to their age demographics as well as the skills required for each job.
2) Map your situation – develop a risk management chart for each and every job in your organization and identify at least two individuals who could move into each job along with their potential timeframe. Confirm gaps and risks.
3) Identify training needs – prioritize those jobs which are crucial to the ongoing success of your organization, identify the competencies and training required for a successor and create a career development plan.
4) Identify potential internal talent – while good job performance may be evident, undertake a series of psychometric assessments to identify individuals who have the skills in the five critical areas mentioned above. Being a strategic and visionary thinker is a unique skill and if you don’t have this skill within your organization, you will have to bring in an external candidate.
5) Map candidate pool – once you have completed your assessments, create a map of your talent pool. This will enable you to determine short and long term gaps and create a development plan for each individual. Invest in your people.
6) Link competencies to strategic business plan – after the competencies have been developed for each job role, compare and contrast them to each of the strategic business goals. Determine which of the competencies will be the drivers to move you forward and then assess your strengths and weaknesses for each.
7) Confirm organizational values – while the younger generation might want higher compensation, most in my experience seek better life/work balance than their parents. Take time to examine your organizational values and workplace philosophy. Determine what would attract new employees, what would set you aside from your competitors and utilize these elements in your recruitment strategies.
8) Develop a recruitment strategy – finding the right candidate with the right skills at the right time and getting the cultural fit just right is not as easy as it looks. Most high caliber candidates are happy in their current work and are not on the job hunt. They need to be tapped on the shoulder and invited to look at your opportunity. Many times this must be done on a highly confidential basis.
An HR Recruiter’s Perspective
Donna Friedman, chairperson and CEO of Tower Consultants, which specializes in human resources recruitment, said that the resultant dilemma when an entire generation heads for the exit signs is succession planning and it is something that is currently posing huge challenges for corporations. Not only are the baby boomers leaving the workforce in exceptionally large numbers but oftentimes executives in this demographic group are departing at the same time, often around bonus season.
“Companies are trying to deal with the problem on multiple levels,” said Ms. Friedman. “For one, the total rewards people, where I specialize, are working to design strategies and incentives to encourage the near-retirees to stay longer, giving them retention bonuses. They are also rewriting job descriptions to allow for part-time jobs so that the senior people could be there to help recruit, mentor and train the incoming generation of worker bees. But finding new people is a huge challenge as well.” She’s right, study after study has explored the rising talent gap, and Ms. Friedman said she sees no closure in the people supply and demand curve anytime soon.
As an HR specialist search firm, Tower Consultants is frequently asked to bring in heads of talent management to help client companies deal with the need for proper succession planning, and not only in the C-suite. That work starts, of course, with analysis, through climate and engagement surveys, as to how much at risk the company might be of losing employees, at what levels and within which functions, and what it can do to mitigate that risk by providing a better work environment to get them to stick around longer.
Indeed, younger employees today can be a challenge to keep. “Organizations are struggling to maintain their high potential talent,” said Ms. Friedman. “Young people can be very impatient, and some, though not all, are looking to make a lot of money quickly and ascend the career ladder. And if they don’t move quickly they’re very much at risk of headhunters coming along and snatching them up to go to another opportunity.”
Many of the younger generation, of course, have seen their parents ushered out of jobs before they were ready, and as a result Millennials now oftentimes put themselves before their company. “There is no loyalty anymore,” said Ms. Friedman. “Young people are taking care of themselves. They want to make money quickly and they are going after the best opportunity. They’re not ready to wait around. It’s a new generation.”
Indeed, the latest reports on Millennials suggest this generation might be more impulsive. But they also work well with baby boomers, and companies that can bring the two generational groups together usually benefit vastly more than those that ignore this new age workforce combination.
Another Recruiter’s Perspective
Nancy Green, vice president of the Washington, D.C., office of Vetted Solutions, which focuses on the non-profit and association search market, said that the central tenet of succession planning is to avoid disruption as much as possible, especially in the C-suite. “Really, at the end of the day when you’re thinking about succession planning you’re thinking about keeping continuity in place, and keeping the confidence of the board and the leadership and the stakeholders,” she said.
Succession planning should take into consideration more than the measurable ingredients of a successful company. A retiring CEO, for example, should have insights into cultural matters that would be helpful to pass down to his or her successor. Some examples: “What is the philosophy that that person has in working with the board?’ said Ms. Green. “How would you characterize the staff and board partnership? How are partnerships formed? What does that look like?”
Another piece to consider is managing communication and the messages that will go along with a CEO’s departure and the arrival of his or her successor. “As soon as that CEO is thinking about leaving, and this is going to become public information, who needs to know first?” she asked. “How do you think about how you tell the staff and manage that communication? If it is an association or non-profit, how do you tell the members of the organization? And then, obviously, there’s telling the key leaders.”
Paying attention to communicating about impending change instills confidence, as opposed to uncertainty. “It’s a sense of, ‘Hey we’ve got this; this is something we are planning ahead for; we have a strong strategic plan in place; we have a succession plan in place.’” Ms. Green said. “If it’s a retirement or a very positive transition you can talk about that and get out in front of it.”
Ms. Green cited a number of factors that are vital to a good succession plan. “One of the most critical pieces that needs to be in place is a good strategic plan, that road map for the future, that clear outline of the metrics that go toward what success looks like. That’s No. 1, because if the board and the staff are on the same page about the direction, it does help guide the other pieces pretty effectively.”
No. 2, she said, is having a clear understanding of how the future CEO will be put in place. “What is the search committee going to look like?” Ms. Green pondered. “Who needs to be involved? What are the voices that need to be included in that conversation? And how will the conversation about input take place?”
Why is it important to have a succession plan, and what can happen to a company if it fails to have one? Uncertainty and possible instability is one answer. “At the very least, said Ms. Green, if you’re not prepared it creates an uneasiness and unpredictability that could cause anxiety and disruption.” Enough, she added, to prevent the continuity of the work from happening. “Fear of the unknown, of who is coming in and what might change, can cause people to leave their jobs.” The better approach, she said, is to manage expectations in order to keep baby boomers, any everyone else for that matter, in place for as long as possible.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor — Hunt Scanlon Media