Over the past few years, developing and implementing succession plans and managing them effectively have become increasingly critical to the long-term success of any company.
Experts point to a “perfect storm” of trends, including the baby boomers’ impending retirement, a growing skills gap and corporate consolidations and scandals. These trends are coalescing and exacting an overwhelming toll on corporations by significantly reducing the talent pool and making it difficult to acquire and retain talented performers.
There never has been a time in recent history when businesses experienced such a dramatic loss of their most experienced staff members while also facing a huge deficit in replacing and hiring workers with the needed skills. For these organizations, there is a critical talent crisis.
In 2006, baby boomers began turning 60 and are now preparing for retirement. Statistics predicting the consequences of this demographic phenomenon continue to proliferate.
The Bureau of Labor Statistics estimates the baby boomers’ exit from the workforce will contribute to a labor shortage of 10 million qualified workers by 2010. Forrester Research states that backfilling baby boomers’ positions will take more time and money than employers think, requiring up to seven years of on-the-job training and at least 2.5 new employees to replace one skilled and experienced retiree.
Meanwhile, as experience and knowledge exit the workforce, there is no influx of talent to compensate for this loss. The Department of Education states 60 percent of all new jobs in the 21st century will require skills that are possessed by only 20 percent of the current workforce.
The National Association of Manufacturers revealed in a recent survey that more than 80 percent of U.S. manufacturers face a shortage of skilled machinists, craft workers and technicians.
According to recent industry data, job training programs and colleges increasingly will struggle to meet the demand for workers skilled in today’s technologies. NASA, for example, projects U.S. colleges will graduate only 198,000 students qualified to fill the shoes of 2 million baby boomers scheduled to retire between 1998 and 2008 – fewer than half of the projected need.
Talent management solutions implemented as part of an overarching strategy that addresses the full employment life cycle – including recruitment, performance, learning and development, compensation and succession planning – can help organizations “crisis-proof” their long-term talent management strategies.Filed under: Leadership Development, Talent Management