Benefits January 26, 2006

More Focus Needed on Boomer Retirements Effects

January 26, 2006 (PLANSPONSOR.com) - Corporate executives are not sufficiently focused on a potential worker shortage caused by Boomer retirements - possibly because they underestimate its impact.
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That was a key conclusion of ” The Aging of the U.S. Workforce: Employer Challenges and Responses,” a new survey conducted by Ernst & Young LLP, ExecuNet Inc., and the Human Capital Institute .

According to a news release ,less than one-quarter of respondents labeled the issue of a possible shortage as strategically very important. A little more than half of the respondents agreed that the aging workforce is an issue that must be addressed, while while almost two-thirds said that retirements will lead to a “brain drain” in their organization.

“Approximately every seven seconds in America this year, a boomer turns 60,” said William Arnone, an Employee Financial Services practice leader in the Human Capital Practice of Ernst & Young LLP. “Seventy percent of the survey respondents have not yet attempted to identify where business wisdom resides in their organization. This means one thing: corporate America is facing a significant wisdom withdrawal.”

Executives say they will be more focused on these issues in the future, with 90% saying they plan to implement a formal retention program.

Other survey results included:

  • Of the 30% who have identified where business wisdom resides, only 67% have formal processes to transmit that business wisdom to the next generation
  • Of survey respondents who believe that the aging workforce is an important issue, more than half (53%) said it will lead to a workforce shortage.
  • Sixty-three percent said that retirements will lead to a “brain drain.”
  • While almost 15% of respondents’ employees are eligible to retire in the next five years, they estimate that just over 10% of their current workers are likely to do so.
  • Approximately 40% noted that their top human capital concern is the availability of talent over the next five years.

The survey was conducted electronically among senior HR executives from November 11, 2005, to December 21, 2005.

However, not everyone has bought into the notion that the trend of Boomer-aged workers retiring en masse might potentially cripple many companies (See Cover: Y Not? , IMHO: Ready or Not ).

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