As a savvy business owner, you know that one of the ultimate keys to your success is the many men and women working behind the scenes every single day. These employees take pride in your company and work as hard as you do to ensure it remains profitable. Without their dedication and general know-how, you’d be a fish out of water.
For better or worse though, eventually, even the very best employees are going to leave your business. Whether it is for an opportunity to take on more responsibility elsewhere or for retirement after years of faithful employment, it is necessary to plan for the possibility of their departure. Especially in the latter situation, planning accordingly for the retirement of key employees can help reduce the risk of brain drain in your business.
Brain drain due to retirement can have profound impacts on the efficiency and general workflow in your organization. Understanding the potential risks of brain drain and making a plan to prepare for it can be critical in transitioning new employees into leading roles successfully.
The Brain Drain Phenomena
Baby boomers have long been the largest generational cohort in the U.S. workforce, but their numbers are quickly dwindling as many reach retirement age. For many companies, this can mean the loss of a great deal of institutional knowledge that has propelled the company forward for years. Many senior employees are so ingrained in their day-to-day work, neither they nor anyone working alongside them can really explain how much the company will lose without their experience.
In many situations, the retirement of certain employees can leave a gap large enough that no one can really fill it without years of technical experience. In others, a lack of desire from younger generations to fill positions could be a lasting business problem. Take truck driving as an example; as older men who make up the prime demographic retire, younger generations are not filling those positions.
The loss of many senior employees can greatly reduce productivity, especially if the position must be filled with a new person with limited experience. It can take years for someone new to learn the ropes and become as productive. For this reason, making a plan for when either you, the company owner, leaves or your long-term employees retire can really benefit your company and prevent brain drain.
Making a Plan
One of the best things you can do as a company owner is to come up with a long-term knowledge retention plan early on. This will help transition new employees into important roles and allow employees to knowledge dump on their way out. Doing so can help keep everything running as smoothly as possible.
It is also beneficial to sit down and have conversations with employees who are likely to retire in the near future. Gain an understanding of where they are with their retirement plans. Although retirement brain drain is certainly a growing phenomena, there are also significant issues of the opposite kind — when older employees have failed to plan for retirement and, therefore, are remaining in positions well past 65.
Older employees remaining in positions past normal retirement age can also have numerous negative consequences for your business, long-term. For instance, if you have a good training plan in place, younger employees will be trained and ready to enter these upper-level positions. If older employees refuse to leave in a normal timeframe, the lack of upward mobility can frustrate younger employees and cause them to leave the company — creating another training and knowledge loss expense.
Combating Brain Drain
So, you’ve talked with your older employees and have a greater sense of when they are likely to retire. This gives you just enough time to put into place a plan for preparing younger employees to step up and take the reins in a, hopefully, seamless transition. There are numerous ways to avoid retirement brain drain out there — don’t be afraid to try a couple of options.
Perhaps the best option is to develop a mentorship program that enables up and coming employees to work alongside older ones. Younger employees can learn the ins and outs of a certain position before becoming fully in charge of it, much like an apprentice learning a trade. Although this is a great way to promote a seamless transition, a mentorship program can be difficult to implement if there is a limited staffing budget and overlapping positions isn’t exactly feasible.
One way around this is to create a knowledge base. Essentially, this is a place where former employees can put how-to guides, tips, and suggestions that can be used like a job manual for newer employees. With the right type of structure and employee buy-in, this can be a great way to compile years of knowledge all in one place. However, it is completely dependent upon the ability of retiring employees to jot down this information in an understandable way and submit it.
Retiring baby boomers are having and will continue to have a substantial impact on the job market. One of the biggest factors is the loss of institutional knowledge and efficiency. To prepare for this, it is important to communicate with older employees about retirement plans and begin working on a strategy to combat brain drain within your company.