The demographics of the workforce are undergoing a dramatic change. Already, 11 percent of the active workforce is over 56 years old, a percentage that will grow steadily as Baby Boomers age. In fact, between now and 2012, nearly 50 percent of the current workforce will become eligible for retirement. Organizations must prepare now for the steady departure of huge numbers of their most experienced people.

On the heels of retiring Boomers, the much less populous Generation X (now ages 25-38) will provide a shrinking pool of prime-age workers. And even with a modest increase in workforce population among Generation Y (now ages 16-24), there will simply not be enough young workers to fill the void that will be left. As a result, most organizations will face a serious shortage of workers. This is especially true of skilled workers; already, shortages in healthcare, government, education, transportation, non-profit sectors, and manufacturing have reached near-crisis levels. And, due to changing world affairs, immigration will not be a viable solution to the staffing shortages to come.

So, what can your organization do to prepare for the generational shift in the workforce?

1. Forestall the retirement of as many older workers as you possibly can. Whenever feasible, support semi-retirement through flexible work arrangements: flexible schedules, telecommuting, and flexible conditions of employment. Build giant reserve armies of retirees. Immediately begin the process of capturing and transferring the knowledge, skill, and wisdom of older workers.

2. Call upon Boomers to resume their youthful role as change leaders. Now is the time to abandon hierarchical norms, sink-or-swim management, and one-size-fits-all career paths.

3. Prepare Gen Xers for supervisory responsibility and leadership. Gen Xers are now entering their prime working years in short supply and full of attitude. Xers want status, authority, and rewards, but often resist traditional management roles. Create new paths to leadership, redesign leadership roles, and develop the new generation of leaders for those roles.

4. Accelerate the professional development of Gen Y employees. Recruit new employees at younger ages, get them up to speed faster, and trust them with important roles involving critical tasks and responsibilities. There’s no choice; there simply won’t be enough older experienced workers to get all the work done. Teach managers to coach these high-maintenance younger workers every step of the way on every single thing — from time management to customer service.

5. Be prepared to exert more pressure to get more work and better work out of fewer people. Everyone is going to have to work smarter, faster, better, and probably longer and harder too. Highly skilled, hands-on, coaching-style management will still be the key to success.

Bruce Tulgan is the author of Winning the Talent Wars, published by W.W. Norton. Bruce is the founder of RainmakerThinking, Inc., which is a research, training and consulting firm focused on the working lives of those born after 1963. Based on the pioneering employee interview research they have conducted since 1993, RainmakerThinking advises leaders and managers in a wide range of organizations on realigning recruiting, performance management, and retention practices to fit the new “free agent” career path. Visit their Web site at www.rainmakerthinking.com

© Bruce Tulgan, Rainmaker Thinking

THE BEST COMPANIES DON’T BUY BACK PEOPLE! It rarely works and within six months, the candidate is usually gone anyway. The major reason it doesn’t work is that there is no longer a trustful relationship between the employee and the employer. The feeling of loyalty, commitment, and concern for common goals just isn’t there anymore. The employee has gone out and found another job, communicating that he no longer thinks that his present situation is best for him. His loyalty and trust just aren’t there. In short, he wants a “divorce” from the business situation.

Upon resigning, this type of employee knows that he has his employer over a barrel. He knows he has policies and procedures in his head. He knows that his experience and ability can be leveraged to his advantage. Even though he may not think of it, when an effort to buy him back is made, he takes advantage of it. He has now gotten more money, title etc. for what he was doing before. In short, he has just blackmailed his employer. Each party has solved his problem for the moment. The employer has, in spite of what he might think, merely put his finger in the dike. He has put a Band Aid the mammoth wound and thinks everything is fine. The employee on an ego high knows how much his employer needs him. Now he feels great and knows that things will work out. They are both WRONG!

Once the employer thinks objectively about what he has done to keep the employee, he begins to resent it and gets angry with himself for letting the employee do that to him. He feels blackmailed, leveraged, even cheated. He realizes when his employee came in to resign, the employee fired him and his company. This employee leveraged his position and the employer gave in. Now, to the employer’s mind, the employee has the advantage. The employer is no longer in control; the employee is.

If the employer doesn’t start thinking this way immediately after he buys an employee back, he will very soon. His immediate satisfaction is short lived, especially when he thinks about the word traveling and other employees will be encouraged to do the same thing. We know of an instance when a client of ours bought back an employee who was leaving. In the final analysis, three other employees tried the same thing once they saw that it worked. By the time the third one was emphatically let go because of what he was doing, the first two became fearful and subsequently left. The employer had created his own monster by letting it start in the first place.

Most employers will come to the conclusion that if the employee being bought back was worth what he is now being paid, he would have been paying him that to begin with. The employee is now under such scrutiny on the part of the employer his every function will be questioned and reevaluated. After the dust has settled, his employer resents what he has done and becomes evermore critical of his performance. The human flaws of the employee become more and more pronounced.

Money, Title…Temporary
The employee starts thinking about what happened. After the newness of the money, the title, and the new responsibilities wear off, he starts wondering why, if he is now worth this to his employer, wasn’t he worth that before. He begins to resent all of the things he had to do to get his deserved raise, new title, etc. Does this mean that every time he wants (or needs) a raise, he will have to go out and find another job, get an offer, then come in and leverage it again? If they really respected him, he wouldn’t have had to even consider finding a job to begin with. Most of the reasons why the candidate wanted to leave in the first place haven’t changed. The cosmetic changes were fine for a while. The money, title etc. made him more tolerant of the situation but it was just too much trouble to get those. It is the same old company that didn’t appreciate him until he was almost gone. Within six to nine months he leaves. Buy backs don’t work! Good companies just don’t attempt it.

Tony Beshara is owner and president of Babich & Associates.   Beshara has been in business since 1973, and he alone averages $2.5 – $4 million per year in billings. If you have any questions about this article, please call (214) 823-9999.

© Tony Beshara, Babich & Associates