Forty-one percent of respondents to the Ernst & Young survey say middle management level employees will be most affected by the retirement of baby boomers; however, of those with formal succession-planning programs in place, 75% said they are focused on monitoring senior management only. In part the study found inadequate succession planning could be linked to increasing costs.
Fifty-two percent of respondents acknowledged they have seen increased costs related to hiring new staff, while 43% said they have seen an increase in training and development needs.
Further evidence that companies are not prepared for the effects of the aging workforce: 68% of survey respondents said the single greatest organizational risk is retaining key employees and maintaining intellectual talent, but 15% said they did not know what percentage of their workforce would be eligible to retire in the next five years.
Seventy-seven percent of the HR executives surveyed said they had identified financial risks associated with the aging workforce, but 54% are neither making nor considering changes to their benefits and compensation programs in light of potential financial risks. Fifty-eight percent said either they have not or do not know if someone at their company has analyzed their benefits plans and conducted a compliance review to determine if employees are receiving accurate benefit amounts.
While 44% of respondents said it would be desirable to have senior management stay beyond their normal retirement age, 60% admitted current compensation programs are “neutral” in terms of encouraging or discouraging retirement at a designated age. Additionally, only 29% are considering phased retirement programs.
Also, while 39% said health care is the top feature in a compensation/benefits program that influences an employees’ decision to retire, 54% either have made or are considering increasing employee co-pays.
Survey findings are based on responses from a sampling of senior human resources/human capital executives from Fortune 1000 companies in a variety of industry sectors. Greenwald and Associates conducted the survey electronically and via telephone interviews from May 14 to June 25, 2007.
A summary of research findings is here .