Boomers' exodus prompting partnerships
Demographics drive demand for corporate- university alliances
By Stephen Flavin
Entering the new year, businesses face many challenges – such as increased competition, globalization, and political uncertainty – that loom larger than ever. But perhaps the most formidable challenge businesses may be right in their own businesses: The exodus of its workforce.
As the vast baby boomer population approaches retirement, forward-thinking CEOs and HR managers are mow searching out ways to build the leadership pipeline and improve recruitment and retention of high-potential employees. This demographic shift will hit businesses at a time when the pace of change in the global economy puts a premium on the quality and adaptability of the workforce. Recognizing that people are their most valuable resource, progressive firms are forging innovative partnerships with university-based corporate education providers to capitalize on these challenges.
According to the U.S. Bureau of Labor Statistics, the percentage of workers age 55 and older will increase by 49.3 percent over the next seven years; or, more than four times the growth rate of the overall labor force. This poses a big potential risk to businesses as boomers retire. Some experts predict that more than 8.5 boomers will retire every minute starting on Jan. 1, 2011, the day that the first boomer turns 65. Compounding the problem: Generation X – which will eventually replace the 76 million boomers in the workplace – comprises only 44 million people. This demographic sea change presents a significant challenge for U.S. businesses, and according to the Society for Human Resource Management, threatens to undermine the nation’s competitiveness.
A massive amount of knowledge resides in the heads of baby boomer managers and executives who will soon retire. This intellectual capital drives revenues, reduces costs, and helps businesses operate smoothly. Over the next 10 years, organizations must figure out how to replace these management and leadership skills and transfer this intellectual capital to the next generation of business leaders or risk losing significant competitive advantage
Companies have increasingly turned to corporate and professional education programs at universities to help close this leadership gap. As a result, innovative schools have rethought their approach to corporate education programs. They are working with companies in new ways to help managers and high-potential employees think beyond the current realities of their jobs, develop strategic decision-making skills, and gain the ability to lead people and enterprises into the future of global competition.
There are a number of approaches to these programs. Some include:
• A consortia approach: Pooling resources through consortia happens when companies and education providers create corporate programs that serve the common needs of the member companies. Companies marshal their purchasing power to develop leadership programs delivered at lower cost than comparable public, open enrollment offerings. Participating firms assist in developing the instructional design to make classes relevant, and they help determine the profiles of participants to ensure peer groups among participating executives. As a result, employees participating in these programs gain valuable insights from their peers at other companies they could never realize through their own corporate training programs.
• Flexible and non-traditional formats: Some schools adopt flexible, non-traditional design and teaching elements to better accommodate the pace and demands of a workplace. These can include modular delivery options that minimize time away from work, and let participants test new skills in the workplace between modules. In addition, peer-coaching relationships can be established among participants, and activities like projects and simulations enable participants to practice new behaviors in a risk-free environment and learn from their experiences. These program elements deliver on businesses’ expectations of an immediate and tangible return on their investment because they maximize participants’ ability to put new skills to work immediately and develop innovative approaches to real-world problems.
• Improving recruitment and retention: Since fewer people will be available to work once boomers start to retire in large numbers, hiring decisions become much more critical, and turnover of talent becomes that much more costly. Companies are searching for better ways to recruit and retain high-potential employees, and the most innovative schools are crafting unconventional solutions to help businesses address these needs in a seller’s market.
• Innovating internship programs: Enlightened employers have started to look at internship programs in a new light. For example, some companies are collaborating with schools to create customized internship programs in which teams of students research and analyze actual business problems companies are facing and recommend possible solutions. These internships, which resemble consulting engagements in both style and substance, provide companies with an immediate return on their investment while giving them the opportunity to test-drive future talent.
• Preparing high-potentials for leadership: Schools, companies and industry groups, are working together to develop shortened management education programs that give the basics of business to bright young people early in their careers. A lot can be accomplished in as little as five days, whether the instruction is delivered in a single block of time or spaced out over several weeks. One distinct advantage of these programs is to help promising employees perform their current assignments more effectively. By offering these development opportunities to their high-potential employees, companies can also demonstrate their commitment to rising stars and determine the suitability of investing in future management education, such as an MBA degree. In addition, programs in business basics for young employees enable firms to consider and attract employees from a more diverse set of sources than in the past. Young employees or job candidates with non-business or non-technical backgrounds can set themselves apart from other candidates for employment or promotion based on their grasp of business tools and techniques acquired in such coursework.
These are only a few examples of the innovative programs and partnerships being forged to address challenges posed by imminent baby boomer retirements and the pace of global competition. The potential for collaboration among companies and corporate education providers has never been better, or more essential to ensure a successful future for tomorrow’s businesses.
Stephen Flavin is the associate provost and dean of WPI’s Corporate and Professional Education program.
WBJ Web Partners
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