Goodbye Yellow Brick Road?

If you remember the sonic boom of the early “faster-than-the-speed-of-sound” flights, then you may not be taken totally off-guard by the boom created across America during the “faster-than-you-can-say-hippie” employee shortages and knowledge loss expected to occur during the exodus of the baby boomers from the workforce. The start of what may be the largest demographic change to hit the American workforce began last year.

The first of the Baby Boomer generation turned 60 years old, and every seven seconds for the next eighteen years another baby boomer will turn 60. With approximately 83 million workers set to retire in the next decade, many employment experts warn that there may not be enough younger American workers to replace those who will retire and that even the massive productivity gains made in the past decade may not be enough to make up for the lost labor, talent, and knowledge base. In fact, by 2010, more than 25 percent of the U.S. working population will be at or near retirement age. The generation just behind them, the GenXers, with less than 54 million people, is 35 percent smaller.

SONIC BOOM EFFECT

Every industry will be impacted. For example, manufacturing already faces shortages of skilled workers in many sectors. This shortage will only intensify as the boomer generation of welders, tool and die makers, mechanics, and electricians begins retiring. The “2005 Skills Gap Report – A Survey of the American Manufacturing Workforce,” conducted by The National Association of Manufactures (NAM), Deloitte, and The Manufacturing Institute, states: “The picture that emerges is both more complex and more disturbing than in the past, because it exposes a broadening gap between the availability of skilled workers and the employee performance requirements of modern manufacturing.”

As companies compete to attract the best of the GenXers, manufacturing must overcome the “assembly line stereotype image” that the younger generations find so negative that there is a decreasing number of young people pursuing manufacturing careers. One positive action being taken is the campaign developed by the National Association of Manufacturers (NAM) and The Manufacturing Institute, its research and education affiliate, to recruit young people by putting a more glamorous face on the industry. If you’re having, or anticipating, labor shortages, you might want to check out any campaigns being undertaken by associations in your industry.

The biggest problem facing everyone, however, is not the loss of warm bodies, but the loss of institutional knowledge. Peter Drucker, a renowned management thinker, calls the coming knowledge loss, “a hemorrhaging of workplace knowledge and knowledge-based experience at a time when such knowledge and experience is increasingly important to the American economy and to the organizations that comprise it.”

Why the uproar? Well, how much does your company value experience? Do you look for new employees with five years or ten years experience? Then consider these numbers, the Society of Petroleum Engineers estimates that the industry will lose 44 percent of its petroleum engineers between 2000 and 2010, a loss of 231,000 years of cumulative experience. That’s a lot of experience and knowledge from just one sector, and we can expect similar losses in every industry. Almost every expert agrees that now is the time to plan.

Some innovative companies have already begun programs to replace the talent and knowledge lost by the baby boomer exodus by identifying and documenting the knowledge and experience held by boomers before they exit the workplace. U.S. companies with a goal of building a post-boomer high-performance workforce may need to take a “long-term investment” view of the value of job-specific training, employee development, and knowledge documentation.

Goodbye Yellow Brick Road?