Corporate America Worries About the Coming Brain Drain

There’s been a lot of attention in this recession paid to seniors who are delaying retirement, and for good reason.  Reporter Emily Brandon, writing in U.S. News & World Report in September, said the impact of keeping older adults in the workforce is that younger ones are kept out.  Her story was based on research done by the Pew Research Center, which released a survey this past fall that showed most adults between the ages of 50 and 61 were considering working during the traditional retirement years. At the same time, more than four in 10 non-workers between the ages of 16-24 told Pew they had tried without success to find a job. Brandon wrote that for older workers, the decision to stay on the job isn’t always economic, although seventeen percent said they need the paycheck and another 27 percent said they were motivated to continue working by a mix of desire and need.  That’s  44 percent working because of (or at least partly because of) financial reasons;  87 percent of employers said employees are working longer in order to rebuild their retirement nest eggs. When the economy begins to recover and the recession fades, will those seniors start retiring in droves?

Corporate America appears concerned that’s how things will shake out. According to MetLife’s Emerging Retirement Model Study, released Tuesday, employers today are deeply anxious and concerned about the impact of the knowledge drain on their organizations. When asked which of two retirement-related issues – delayed retirement or the knowledge drain – are of greatest concern today, 74 percent said it was the knowledge drain, as older workers retire. In fact 70 percent of employers surveyed anticipate that will be their biggest concern in the next 3-5 years. MetLife commissioned the survey of 240 employers to examine their attitudes and behaviors towards the aging workforce in the midst of a deep economic crisis.

Ironically, despite all their fears, 97 percent of companies surveyed have done little, if anything, to figure out how to transfer knowledge from older workers to younger workers, including calculating the cost.  Last August The Conference Board in New York released a report, “Bridging the Gaps: How to Transfer Knowledge in Today’s Multigenerational Workplace”—that showed most companies had no plan to manage and transfer knowledge held by senior people. The result, concluded the report, “can be a significant drain of business wisdom that decreases innovation, lowers growth capacity, and reduces efficiency in the organization.”  About 75 million boomers are poised to retire and as the economic recovery takes shape, those who delayed will  likely begin moving on.

Cynthia Mallett, vice president of products and market strategies at MetLife, was quoted in a release put out by the company as saying:

“It’s interesting that so few employers are quantifying the cost of, and strategically preparing for, the knowledge drain they’re concerned about – perhaps because they’re uncertain about where to start or they don’t know how to calculate the cost.”

MetLife concludes that employers might not be doing much about the impending senior brain drain because  they have some time.  The employers surveyed believe that in the next three-to-five years employees up for retirement will delay it anyway, on average another three years, from age 64 to 67.  That could give employers extra time to assess the needs of their organization, calculate the cost to transfer knowledge and put plans in place to transition knowledge from their aging workforce to younger generations. The Conference Board said in its report last year that while many workers transfer their knowledge and experience “expecting recognition or out of a sense of altruism” there is a growing business case for doing it. “The benefits for workplaces,” said the Conference Board, “include increases in productivity, speed, agility, profits and growth.”