The problem is compounded, Harrington says, because although Gen Xers do want to move up to the Boomers’ jobs, they don’t want the stress that goes with the jobs. They also want work/life balance, and that creates a conflict.
Harrington, founder and president of Purposeful Hire Inc., offered her tips at BLR’s Strategic HR Summit, held recently in Scottsdale, Arizona.
Replace Career Ladder with a StairMaster®
The old career model was the ladder, says Harrington, but the new model is the StairMaster—you’re working hard, but you’re going nowhere. The new model is up, down, sideways, or out, says Harrington.
This graphic, says Harrington, which she offered courtesy of Dan Ward, author along with Rob Tripp of Positioned: Strategic Workforce Planning that Gets the Right Person in the Right Job, shows what happens when Employee A retires.
Employee B is promoted into Employee A’s position.
Employee C makes a lateral move to B’s former position.
Employee D is promoted to C’s former position.
Employee E makes a lateral move into D’s former position.
A new employee, F, is hired from outside for E’s former position.
Going outside is now a last resort, says Harrington. You intentionally look first at your internal pipeline.
“Those who fail to prepare, prepare to fail!” Participate in an extended webinar on September 12, and learn how to build a succession planning strategy from the ground up. Register Now.
Will an Early Retirement Program Help?
Harrington suggests that you consider an early retirement program when you:
- Have a highly paid, aging population
- Have HiPo Gen Xers demanding career mobility
- Need to reduce retirement payout
- Can consider paying medical insurance until 65
Be sure to structure your program to avoid legal pitfalls. Harrington says:
- Consider the Employee Retirement Income Security Act (ERISA) and plan to avoid adverse impact.
- Avoid coercing employees.
- Make a plan based on age, not on performance.
- Obtain a release from legal claims.
- Comply with the Older Workers Benefit Protection Act when framing severance agreements.
- Consider the expense of implementation, since many choose not to opt in.
- Consider whether a RIF might be a better option.
Alternative to Early Retirement
Many organizations are looking at alternatives to early retirement that will satisfy workers’ needs while still retaining their knowledge and skills. For example:
- Phased retirement (for example, a reduced schedule of 3 days per week)
- Transition period (for example, providing help with establishing or training for a new career)
- Part Time On Call (PTOC) (for example, as attrition thins the ranks, instead of hiring full-time replacements, hire retirees for 6-week stints.)
- Position downgrade (for example, an executive moves back to the technical level). Moving top people down the ladder, Harrington says, can be a win-win when they end up with less stressful jobs, but they are still available to mentor.
- Executive transition programs (for example, Bill McCarthy’s “Workplace to the World,” w2wgroups.com).
Developing Your Succession Plan
- Do a cohort analysis. First, conduct a cohort analysis, says Harrington. How do your employees spread out, age wise?
- Analyze attrition trends. Who is leaving in the first 6 months, who after 2 years, 5 years, etc.?
- Review talent annually. Consider the readiness factor of potential successors (first and second successors), and check their development plans.
- Determine who is eligible for retirement. Note that with defined benefit plans, employees often leave when the plan is maxed. However, with defined contribution plans, they may stay until they are 80.
Without a succession plan in place, the best leaders leave. That’s why it’s crucial for you to develop and apply a plan now. Register now for our Succession Planning and Cross-Training Summit on September 12.
Resource Planning vs. Workforce Planning
Resource Planning involves the whole workforce, says Harrington, and generally looks 6 to 24 months out.
Workforce Planning is more specific and involves plans to fill critical roles. It looks at supply and demand over 2 to 5 years. Concentrate on:
- Jobs that are difficult to fill externally e.g., STEM jobs—that is, science, technology, engineering, and mathematics;
- Jobs with a long learning curve; and
- Jobs with a high level of impact on the business.
The 6 Bs of Creative Talent Management
Decide where you will find your talent. Harrington offers the 6 Bs:
- Build—Internal and external professional development.
- Boost—Promote from within.
- Borrow—Use contract, short-term, and offshoring.
- Buy—For critical needs only, hire externally.
- Bounce—Shrink the workforce.
- Bind—Retain “A” players.
You sort this out by determining how critical the position is, how soon someone must start, and how long the need is. For example, for short-term needs and an immediate start date, you’ll probably want to borrow. For long-term needs with a future start date, you can build.
In tomorrow’s Advisor, engaging the next generation of leaders, plus an introduction to a live extended webinar coming Thursday, September 12, 2013!