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Benefits July 6, 2012
University of Michigan Prepares for Employee Exodus
July 6, 2012 (PLANSPONSOR.com) – The University of Michigan is expecting nearly one-fifth of its workforce will retire in the next five years.
Reported by Rebecca Moore
By the end of 2017, 39% of faculty and 35% of staff will be eligible to retire, Laurita Thomas, university associate vice president for human resources, told AnnArbor.com. University officials expect roughly half of those eligible will actually retire.
In 2002, employees older than 50 comprised 39% of the workforce. In 2011, that number had risen to 46%, according to a Human Capital Report for the University. In 2012, 762 staff will become newly eligible to retire. In 2017, there will be 1,060 newly eligible retirees.
The news report noted that the aging of the population coupled with a recovering economy is why officials are predicting a larger than usual wave of retirements. “The economy has adjusted somewhat. People aren’t quite as concerned about sustaining their incomes through retirement,” Thomas said.
Timothy Slottow, the University’s chief financial officer, told AnnArbor.com the university is cognizant of encouraging new leaders to step up in order to avoid a leadership void after the impending wave of retirements. “For staff it’s a real issue with succession planning and leadership development, because when people have been here for twenty years they know a lot about the complex way a university runs,” he said. “You have to build that skill base.”The Human Capital Report predicted that 28% of administrative staff would retire between 2012 and the end of 2017, or 812 employees. Among projected administration retirees, 36%, or 135 employees, are managers. University-wide, 546 managers were expected to retire between 2012 and 2017.
"The United States is on the cusp of a significant demographic change as baby boomers plan for and retire from their careers," the report stated. "Like many large organizations, the University of Michigan will experience these trends through new retirement patterns that will require flexibility and action planning."
The action planning consists of developing leadership skills in existing employees, offering market-rate benefits and raises to keep faculty and staff in Ann Arbor and ensuring the University’s work environment remains comfortable enough to attract new talent.
In addition, the school has doubled the number of apprentices in skilled trade areas, preparing for 159 workers, or 35% of the trade workforce, to retire within the next five years. The University has also tried to keep raises steady, offering faculty 3% raises last year and projected 3% raises this year.
For both faculty and staff, the university conducts retention interviews to get a sense of an employee's contentment and whether they are contemplating leaving or looking for an opportunity to move up. For those that wish to advance, the university has existing leadership training programs and is in the process of creating more.
The University of Michigan’s Human Capital Report is at http://hr.umich.edu/humancapital/retirement/index.html.