As U.S. Workforce Ages, Employee Knowledge and Experience at Risk, Accenture Survey Finds; U.S. Companies Fail to Capture, Transfer Critical Workforce Knowledge and Skills

NEW YORK -- Many U.S. organizations are failing to capture critical workforce knowledge and experience from older employees facing retirement, and few organizations are transferring that knowledge to newer employees, according to the results of a survey released today by Accenture (NYSE:ACN).

The survey of more than 500 full-time U.S. workers between 40 and 50 years of age found that nearly half (45 percent) of respondents' organizations do not have formal workforce planning processes and/or tools in place to capture their workplace knowledge. Additionally, one-quarter (26 percent) of respondents said that their organizations will let them retire without any transfer of knowledge. Just 20 percent said they anticipate an intensive, months-long process of knowledge transfer prior to their leaving, 28 percent said they believe the knowledge-transfer process will last one or two weeks, and 16 percent think they will simply have an informal discussion with others in the organization prior to retirement.

"If they don't act soon, organizations will face a major exodus of institutional knowledge, as their most experienced employees leave the workforce," said Kathy Battistoni, a partner in Accenture's Human Performance practice. "With more than 25 percent of the current working U.S. population reaching retirement by 2010, companies must undertake workforce development and training initiatives to capture knowledge and minimize its loss. Additionally, they must support these initiatives with technology, which can help capture critical information and distribute it directly to employees' desktops."

Despite the potential loss of workforce knowledge and experience, workers remain committed to their employers. According to the survey results, more than two-thirds (70 percent) of respondents said they expect to retire from the organizations at which they're currently employed, and half (49 percent) said they expect to remain in their current positions until that time. The vast majority (88 percent) said they are willing to acquire new skills, nearly half (46 percent) said they are willing to relocate for their employers, and more than one-third (39 percent) said they are willing to work longer hours. Yet four in 10 (41 percent) said their companies are doing only a fair or a poor job of providing the training they will need to meet the skills challenges they will face prior to retirement.

At the same time, few companies take advantage of the experience and expertise of their retired workforce. Just one-third (34 percent) of respondents reported that their companies hire retired employees as contractors so those former employees can transfer their knowledge and skills to their replacements.

"Companies should take three critical steps to meet the challenge of transferring knowledge from retiring employees," said Battistoni. "First, they must understand the extent of the problem, including the skills at risk, and their organization's ability to tackle it. Second, they must develop a strategy to capture and transfer core skills from retiring employees and to identify, attract and retain new workers with critical skills. Finally, they must manage and measure the progress of the entire effort. The bottom line is that leaders in this arena know that capturing critical workforce knowledge and skills can't be left to chance."

Among the survey's other findings:

--Most employees' plans for retirement have not changed over the last five years. The majority (58 percent) of respondents reported that, over the past five years, they have not changed the age at which they plan to retire, versus 41 percent who said their plans have changed. More than half (53 percent) said they expect to retire before age 65, while 29 percent plan to do so between 65 and 69, and 17 percent expect to do so after 70.

--Finances determine retirement plans. Three-quarters (74 percent) of respondents whose plans for retirement have changed said they plan to retire later than originally expected. For more than half of these respondents (55 percent), the chief reason for the change is that their financial situation is not as secure as they had hoped, while 20 percent of the respondents said they still enjoy working and therefore plan to delay their retirement. Just 21 percent said they plan to retire earlier than anticipated.

--Retirement security is uncertain. More than two-thirds (68 percent) of respondents said they are somewhat or very concerned about the ability of their pensions and government-sponsored programs to provide comfortable support after retirement. Yet 58 percent said their employers do a good or excellent job of providing financial compensation and investment opportunities to ensure a more secure retirement.

Brain Drain Could Ground Aerospace Production

Industry task force offers dire warning if workforce challenges aren't met.

http://www.industryweek.com/ReadArticle.aspx?ArticleID=16363&SectionID=1

Sunday, June 01, 2008

By  Jonathan Katz

The U.S. aerospace industry faces declining workforce numbers that could result "in a disastrous loss of intellectual capital for the industry" if measures aren't taken to attract more skilled applicants,according to a report released in early 2008 by the Interagency Aerospace Revitalization Task Force. The study concludes that a lack of U.S. students with strong math and science skills coupled with a graying workforce and recruiting and retention challenges could leave the industry with a major skilled-worker shortage.

While the industry is heading for its fourth-consecutive year of employment growth, with a projected total workforce of more than 637,000, the total employment gain was only 7,700, according to the Bureau of Labor Statistics. At the same time, the number of production workers grew by nearly 26,000, indicating that the nonproduction workforce is declining. The five most difficult positions to fill include engineering-related jobs in avionics, electro-optics, propulsion and power systems, complex enterprise architecture and integration software, and systems engineering, according to the

report, citing the Aviation Week 2007 Workforce Study.

Like other manufacturing sectors, baby-boomer retirements are expected to hasten the void. The federally appointed task force cites a 2002 report that notes about 26% of aerospace workers will be eligible to retire by 2008, and the Aviation Week study indicates that as of mid-year 2007 at least 40,000 jobs were available in the aerospace sector. The industry also is plagued by image problems and security clearance issues for prospective employees. In the past, opportunities for innovation attracted employees to aerospace positions, but the industry ranks last among the number of patents per employees, the report says, citing the MIT Lean Aerospace Research Agenda. Additionally, applicants aren't prepared for the stringent background checks often required for aerospace jobs, meaning past criminal histories can disqualify them, further limiting the candidate pool.

The report's authors suggest three strategies to address what they consider to be the most significant challenges related to securing a skilled aerospace workforce. They include:

1. Sustained collaboration -- utilizing federal resources to develop long-term collaboration between governmental agencies and the aerospace industry. The task force wants to engage the federal government to help communicate to youth what behaviors, such as drug abuse or arrests, could disqualify them from aerospace industry jobs.
2. Integrated investments for aerospace -- strategies related to education and training, particularly in the areas of science, technology, engineering and mathematics (STEM). The task force will focus on building a stronger pipeline of skilled workers through traditional educational pathways and nontraditional means with models that support apprenticeship and workers transitioning to the aerospace industry. One possible initiative is a partnership between the task force and state manufacturing cluster programs that involve stakeholders from educators to industry groups who help develop curriculum, standards and guidelines for various industries.
3. Knowledge sharing, inventory of model solutions and dissemination of results -- working with industry partners to develop an Internet-based interactive resource that can be used to promote potential workforce solutions such as STEM education and training. The tool, funded by federal, state and local governments, would also serve as an organizational vehicle that articulates all stakeholder responsibilities.

The task force formed in 2006 after Rep. Vernon Ehlers (R-Mich.) introduced legislation to develop a strategy that would address workforce challenges in the aerospace industry. The bill was signed into law by President Bush in December 2006. The task force is headed by the assistant secretary of labor for employment and training who, along with the president, appoints members and administrators. Among the task force's goals for 2008 are the development of action plans, the creation of Web-based learning sessions to promote model strategies and the strengthening of established partnerships.

60% of businesses expect performance drop-off due to retirement of baby boomers

Now departing: Baby boomers. And they're leaving employers short on talent. Study finds that 60% of businesses expect performance drop-off due to retirement of baby boomers; 'shortage will grow dramatically'

By Mark Bruno

May 20, 2008

Talk about a brain drain: according to a new study of large corporations by Aon Consulting, the majority of employers feel that the wave of baby boomers now starting to retire will leave them with a substantial shortage of leadership talent in the very near future. Specifically, 60% of corporations polled by Aon said that they expect the performance of their businesses to be affected by the loss of baby-boomer talent—up from only 16% of employers who reported the same concerns last year.

"The leadership shortage will grow dramatically over the next decade with the retirement of the baby-boom generation," the Aon report noted. "This impending talent risk, coupled with larger cost and resource issues, presents serious challenges to employers." Over the short term, companies polled by Aon noted that their workers will be less productive and will likely become "disengaged" as employers struggle to find their next generation of leadership.

But over the long run, employers told Aon that the loss of talent from this generation will impair their ability to adequately service customers. That's the leading reason the baby boomer brain drain could cause companies to perform at lower levels over the next several years. Right behind customer service was innovation, with corporations predicting a deficit there as well among their future work forces. The lack of spark and creativity already has many managers fretting about hitting their revenue growth goals in the near future.

More Brain Drain Links

Organizational Knowledge Retention Report.  Building and Securing an Organizational Brain Trust in an Age of Brain Drain.  Monster.com special report.  Summer 2007.

Companies find ways to retain expertise of older workers.  Marsha King.  Seattle Times, April 9, 2008

Lost Knowledge. Confronting the Threat of an Aging Workforce.  David DeLong.  Oxford Press 2004.