As those born in the post-war era plan for a well-deserved retirement, their bosses are starting to fret over who will fill their rather large shoes, according to a recent survey by recruitment firm Robert Half.
The annual survey questioned 100 chief financial officers and finance directors throughout New Zealand. Focusing on job trends within the workforce, the survey uncovered unease around what will happen when those of Baby Boomer age transition into retirement.
This generation's move out of the workforce is expected to create a knowledge and experience vacuum likely to be hard to fill. Baby Boomers have a reputation for hard work and inspirational leadership, and the institutional knowledge garnered through years of experience provides companies with vital insights around strategy and growth.
Megan Alexander is the general manager of Robert Half New Zealand. She says the impact of the Baby Boomers' exit from the working sphere is significant.
"Baby Boomers are generally the most experienced ones in the workplace today which means that they are able to build and enhance their skills sets throughout the years. With many Baby Boomers facing retirement companies are increasingly anxious about skills and talent shortages."
This is already taking place with many reaching retirement age and choosing to leave the workforce; Alexander says the true magnitude of this trend is likely to be realised over the next few years.
"With the official retirement age in New Zealand being set at 65 years that level of concern is expected to increase drastically in the near future. Eighty-five per cent of Kiwi CFOs are concerned the departure of Baby Boomers in the job market will have a negative impact on their company over the next two years."
The loss of talent represented by the Baby Boomers departure from the workforce has the potential to significantly affect a company's financial outlook.
Experienced, talented staff have the ability to see potential and facilitate growth in areas that may be overlooked by others.
"A company's revenue stream relies on its talent and if companies do not take the necessary measures to make sure they have the skills and expertise to tackle all projects and tasks, productivity and efficiency will suffer which usually does result in some sort of financial impact," says Alexander.
"In this case it is important that companies make sure they take the appropriate and necessary steps in order to avoid a potential skills gap."
Though the skills and experience represented by the Baby Boomer generation may initially be challenging to replicate, Alexander says companies are already in the process of addressing this issue.
"Companies are increasingly taking measures to counter the potential skills gap due to the retirement of the Baby Boomer generation," she explains.
"[Our] research revealed that the top three measures to prepare for this potential skills gap are hiring mid-level talent to develop a skills pipeline, increasing training and professional development programmes, and enhancing employee benefits to retain Baby Boomers."
Recent research undertaken by Colmar Brunton revealed around 60 per cent of Baby Boomers intended to continue working past the age of 65, and more may be tempted to stay if benefits such as flexible work hours are put in place.
But though this may mitigate the immediate affects of the skills exodus, age and ill health will start to take their toll as time passes.
Dissemination of the institutional knowledge held by these staff members is vital for the continued success of any company, and this can be facilitated in a number of ways.
Mentoring is particularly useful here.
Organisations such as Vector have put in place programmes in which older staff members take young staff under their wing and teach them what they have learned over the decades.
Paul McCloskey, the head of human resources at Vector, says these initiatives were put in place after it was found that more than 20 per cent of their workforce was over 55, and there were fears crucial information would be lost once they retired.
"We started looking at ways in which to transition the knowledge held by this group to young people coming through the organisation.
"We changed the job structure of some of the older workers so they could share their knowledge with the cadets and apprentices coming through the work schemes we support."
Alexander also believes that mentoring offers a unique opportunity to spread knowledge throughout a wider workforce.
"Mentoring programs, or a buddy system between junior and senior employees will allow juniors to gain valuable, real-world experience and skills and learn from their senior colleagues/peers," says Alexander.
But she continues by saying that companies are most likely to successfully tackle the issues raised by the retirement of Baby Boomers if they take a multi-pronged approach.
"We would recommend that employers look at the core skills that they have in-house alongside the ones they will have to replace," she explains.
She suggests that resources should be spent on investing in existing junior and mid-level talent and developing their skillsets with training programmes that will prepare them for future senior roles.
"[This will help to aid the company's] succession planning strategy," she says.
"For the expertise that is not available internally, companies will need to step up their recruitment drive and hire new employees that possess the necessary skills and capabilities required to fill in the gaps left by those departing."
If a company invests before the talent crises occur, they can mitigate the worst effects of the exodus of experienced staff and help build up a new generation of staff who have the knowledge to help drive their workplace forward.