How to Prepare Your Company for Boomer and Gen X Retirement

Today, more generations than ever are working alongside one another, but those dynamics are expected to shift soon. As the Baby Boomers and Gen Xers march toward retirement age, companies are at risk of losing institutional knowledge. 

If that grim prospect is something your company could face in the near future, the time to prepare is now. Start building the infrastructure to handle the upcoming retirement exodus and position your organization to succeed in the years ahead. 

1. Document and Refine Business Processes

Long-time employees are vital to an organization. Their time served through the decades gives them perspective, context, and know-how even the best new employee orientation can’t provide. However, their veteran employee status also raises a red flag that leadership must address. 

As technology has changed, and employees’ aptitudes along with it, processes may have become patchworked together. If an originally manual process has become partially digitized, it’s possible that vital steps or workarounds aren’t documented. This risk increases in the nonprofit and small business sectors, where one person may own the work. 

Analyze, refine, and document key business processes step by step with the process owner. Assign a project manager either internally or externally to guide the documentation process to ensure no step is overlooked. This process will be time-consuming and will require testing in real time to confirm its accuracy. However, doing so will ensure your business doesn’t lose the valuable process knowledge of your veteran team members. 

Reassure your team that this exercise is well worth the effort. Partner with technical writing services to structure your documentation in a standardized format future team members can use with ease. This partnership will also reduce the pressure on your team to tackle this project alongside their usual workload. Together, you’ll retain the integrity of the final product and keep your organization on target, now and in the future.

2. Establish Succession Plans

Succession planning may be commonplace at the executive level, but it’s equally essential throughout your organization chart. Launch a full-scale risk analysis of your organization, using HR data and economic forecasts in your industry. Look at recent retiree data, which shows people retiring later, yet still at the relatively young age of 61. Identify risk areas based on age, work type, and your organization’s offering to determine the primary areas to focus on. 

If you run a construction company, team members may retire at a younger age due to the job’s physicality. Determine whether your company can create opportunities for experienced construction workers to shift into leadership. That way, they’re subject to fewer physical demands but can still add value. This strategy can retain employees longer and offer them continued pay and benefits before they’re eligible for Medicare.

In this scenario, your veteran workers can train new tradespeople and offer insight that only on-the-job experience can provide. Interview employees whose age is within a five- to 10-year window of potential retirement and engage them in the process. Let this serve as a pre-offboarding interview, giving them the chance to highlight risks they see. This can reveal gaps in your current staffing plan and identify new opportunities to explore.

Build succession plans for every role, from top to bottom. Use these plans as a guide for cross-training, which should be a normal part of your business continuity efforts. Identify potential leaders through assessments, coaching opportunities, and mentorships. Partner soon-to-retire team members with their upcoming replacements so they can pass the baton without losing a step. 

3. Upgrade HR Policies in Anticipation of Retirements

Now that you’ve documented processes and established transition plans, it’s time to upgrade human resources policies. Many employers offer at-will employment, meaning that, on paper, there’s little difference between retiring and quitting. However, companies can do better than just sending employees off with a cake-and-punch retirement party. 

Enhance your planning capabilities by developing an offboarding process with policies that establish consistent rules. The cost of backfilling a role after an employee exits is high, and replacing a veteran employee can be even more painful. Invest in smoothing your rehiring efforts by incentivizing employees to provide advance notice of their intention to retire. 

Work with your HR team to hash out the details, but get creative and consider what would be an attractive incentive. Offer a cash bonus at retirement for early notification and participation in cross-training. The length of notice may be months or years ahead, depending on your industry, employee role, and rehiring process. A highly specialized scientist will likely be more challenging to replace than a customer service representative, so craft timelines that fit.

Discussing retirement is often discouraged at work, with employees believing that doing so puts them at risk of early dismissal. Collaborate with your culture team to make upcoming retirements the celebrations they should be. Assess employee sentiment surrounding retirement pre-planning and work to improve it over time. Doing so will bolster confidence, improve engagement, and protect your company as the retirement horizon approaches.

Rolling With the Retirement Wave

Researching, planning, and implementing policies surrounding retirement can help your organization manage change and reduce risk. And when it comes to managing talent loss, these strategies should receive top billing during leadership discussions. 

At the core of an organization are its people, so prioritize developing employee life cycles from onboarding to retirement. When you do, you’ll strengthen your company’s knowledge base, fill the leadership pipeline, and be prepared for the retirement wave.