Almost since work began employers have attempted to organize it with approaches to reward largely based on egalitarianism. If not one size, at least one model that fits all! Employers may have to rethink this approach as the effect of the acute talent shortage, facing all industries begins to emerge. To retain talent employers will need to come to terms with two imperatives; first, to stop the baby boomers heading for the exit sign and second, to try and attract and retain the ‘next’ generation. Why is this going to be so troublesome? At the top of the hour glass years of accumulated wisdom and knowledge are about to retire prompted by the fear that the early retirement features and defined benefit incentives developed by employers in a different time are about to be taken away.
Boomers are about to cash in. The Economist recently quoted a study predicting as much as 50% of the S&P 500’s top management could retire in the next 5 years. Where will their replacements come from? For some time recruitment has been selective as organizations reshaped and re-tooled in the face of the competitive challenge of globalization. Consequently, many organizations today bemoan the ‘lack of center’ to their talent pools! The generational effect means that many of those facing early retirement continue to be highly productive and will continue to work. The fear of loss of early retirement benefits has simply had the effect of interrupting careers.
Employers will need to ensure that this wisdom does not join the competition. Look for new offerings such as reverse sabbaticals, pension or health care enhancements and efforts to tap into that wisdom through post retirement assignments to coach and mentor younger leaders to lure boomers back to the workplace. At the bottom of the hour glass a new breed of talent awaits, for whom loyalty does not exist. Traditional, homogenous reward programs including long term incentives and defined benefits will not cut it. A shorter orientation toward work will become the norm. Expect limited time contracts to accommodate life plans and lifestyle needs, to replace open ended offers of employment.