Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
business builder human resources
by Sue Bergstrom
Baby boomer retirements are about to increase from a trickle to deluge, and companies that haven’t prepared may find themselves floating helplessly.
In just six years, the first of the nation’s 78 million baby boomers will hit prime retirement age. Coupled with a shrinking labor force, this mass exodus of seasoned employees is poised to change the face of America’s workplace.
Many are already heading out the door. Experienced employees are taking early retirement, weaning themselves from work and choosing to spend more time playing in the backyard with their grandchildren instead of toiling in the boardroom with co-workers.
Larger, more established companies that will lose huge numbers of longtime employees are going to take the biggest hit. But smaller companies are not immune, and many have not prepared for the critical changes. The costs of the baby boomer exodus, both financial and otherwise, will be high.
Many of the retirees are in senior leadership positions, jobs that require much more effort to fill than simply putting an ad in the paper and hoping the right person responds. In many cases, finding a suitable replacement means hiring a senior-level search firm, which can charge around 30 percent of a position’s first-year salary, plus anticipated bonuses. For high-paying executive positions, that’s easily a six-figure expense.
Then there are the more intangible costs. There’s likely to be a gap between when a senior person cleans out the desk and when a new person arrives, and that can mean a considerable number of lost business opportunities.
Even after new hires come on board, the cost of bringing them up to speed can be considerable as well. They’ve got to learn not only their new job-related tasks, but the company culture. For senior-level people, it can take up to a year before they’re completely productive. It all adds up.
So how can businesses seal the leaks in their recruitment and retention strategies? The first step is to acknowledge that there’s a problem.
Owners’ intentions are frequently good. They often intend to improve their bench strength and groom up-and-comers for soon-to-be-vacant leadership positions. But the reality is that other, more immediate business priorities tend to get in the way.
Savvy small-business owners recognize the impending deadline, and are shoring up their succession plans. They’re trying to retain as many longtime employees as possible — people who are especially necessary at small companies where they play multiple roles.
They’re also getting the next generation of company leaders, the Generation Xers, ready to step into the spotlight.
Who’s your top talent?
Owners need to first put processes in place to identify their top talent. Get together with current managers, and start making a list. Determine which people you don’t want to lose. Once you’ve decided who are the best prospects, you can begin to set them up for new responsibilities.
Many companies will need to change the way they operate to fit the style of this new crop of leaders. Gone are the days of “lifers,” employees who signed on with a company out of school and stuck with it until they were given a gold watch. Generation Xers are driven by a different set of values than their predecessors.
And if you still have baby boomers who consider the younger set to be “slackers,” or younger workers who sneer at the lifers, you’ve got cultural work to do.
Where knowing that they would always have an office to go to each morning might have been a baby boomer’s chief need, the younger generation seeks satisfaction over security. They’re fully aware that if their job loses its luster, or if they grow bored or restless with their position, they can hop to another company. It’s a different marketplace, and Generation Xers know that they’re in the driver’s seat.
Over the past several years, we’ve seen a shift back toward a talent-driven marketplace. Top job candidates have their pick of positions; they’re getting multiple offers from several organizations. Companies are dangling hiring bonuses in front of them.
When an employee is trolling for a new position, companies are more and more likely to make a counteroffer instead of throwing up their hands and letting the employee go. It’s been since the 1980s that we’ve seen such aggressive tactics to lure and keep the best people. We’re in the middle of a talent war.
How to adapt to the new reality? Take a look at your business and try to make it fit the style of the new generation of employees. Older people in organizations don’t always know how to react to the younger generation, but smart small-business owners are educating themselves and their staffs.
You can figure out ways to embrace different working styles and values, but you have to get to know each other first. Host brown-bag lunch discussions about leadership or any topic, or launch regular company get-togethers.
Ask your employees what they value, and implement programs that address all kinds of diversity. Let go of antiquated notions of loyalty and job security.
Actively plan for and invest in the development of up-and-coming leaders. Give top candidates for senior jobs exposure to multiple projects and situations. Write a formal plan for on-the-job training for each of your best prospects. Get people cross-trained in different areas.
Play to the new generation’s strengths by exposing them to stimulating projects, like turning around a failing business unit, or launching a new product line. Pair them with more senior people if they’re not ready to go it alone.
Don’t forget the wealth of knowledge and experience already available. A smart idea is to pair recent retirees, brought in as consultants, to train, mentor and coach. Generation Xers benefit from the lessons their older counterparts can impart, and the retirees are contributing to the company’s future without having to punch a clock every day.
Baby boomer employees can serve the same function, and an added benefit is more understanding across generational lines.
With preparation for changes in employment, small-business owners won’t be left high and dry.
[contact] Sue Bergstrom owns hrconnection, a Minneapolis-based human resources network: 612.925.8341; su**********@**********on.net; www.hrconnection.net
