Baby Boomers, Brain Drain, & Boomerangs: Making Sense of the Demographic Shift

Baby Boomers, Brain Drain, & Boomerangs: Making Sense of the Demographic Shift

"When I was on boards...people never wanted to talk about the next generation of leaders," says Sergio Zyman, chairman and chief executive of Zyman Group, a marketing strategy agency. So, he says, "I got off them."

If your organization is avoiding the issue, it does so at its own peril, and its own expense. While declining birth rates in many industrialized countries around the world portend serious challenges to established workplace, pension, and government systems, the vanguard of the nearly 77 million Americans who are part of the post-war Baby Boom generation (born between 1946 and 1964) are turning 60 and beginning to retire in big numbers this year.

So why should you care? And why should your organization start taking action now to prevent the loss of critical institutional knowledge? You should care because human capital - and especially top executive talent - is not an inexhaustible resource. And you should start taking action now because the competition for the top performers who are part of Generation X (Americans born between 1965 and 1981) has already begun and will only intensify as more and more Baby Boomers opt for retirement over the next two decades.

That's because there are only 46 million Gen Xers, and demographics alone suggest they'll be in far greater command of their careers and will dictate far more of the rules of workplace engagement than their predecessors. "They run their own careers, and companies no longer run their careers," observes Peter Felix, president of the Association of Executive Search Consultants.

The plain truth about the demographic forces that will undoubtedly usher in a hypercompetitive global talent market is that organizations that want to compete simply can't avoid addressing how they'll grow and recruit the next generation of leaders.

That reality - and the fear of losing both the institutional knowledge of the Baby Boomers and the best executive talent following them - is driving an increasing number of organizations to explore executive talent management issues such as recruiting, retention, talent development and organizational capability.

What we've learned from 25 years in executive recruiting is that top people drive performance and leaders have the biggest impact on organizational culture and the strategic agenda. That's why organizations are formalizing the identification of "high potential" individuals, or those emerging, young leaders who may just have the right stuff to elevate their performance and assume top executive positions in the future. These "high potentials" are often assigned a mentor (most often a Boomer) who can help guide them, inspire them, and introduce them to the kind of intellectual capital that organizations must eventually transfer over to the Gen Xers, or otherwise face the harsh realities of an unprecedented organizational brain drain.

Some employers are also offering their key executives the opportunity to stretch their skills, experience, and organizational perspective by offering international postings, thereby ensuring that their future leaders will have a "global view" and the cultural sensitivities that will be required of tomorrow's leaders.

And an increasing number of employers are waking up to the realization that they must invest in educating and developing their workforces in order to keep them properly aligned to both the competitive threats and opportunities posed by our rapidly globalizing knowledge economy.

One of the key organizational challenges of this economy will be to build and sustain competitive advantage through human capital and a high performance workplace culture. The winners will be those organizations who can effectively balance the interests of Baby Boomers who may wish to stay engaged - in some capacity - in the workplace, and the interests of younger workers to whom work/life balance is a paramount concern.

Leading organizations already recognize that in the workplace of the future, Baby Boomers in their late 60s may be reporting to Gen Xers in their late 30s. That older Boomers who may have worked in a homogenous workplace for most of their careers will undoubtedly find themselves working in an environment that is far more diverse, with more women and minorities in leadership roles. And that their organizations need to maintain ties with their alumni in order to tap the experience and cultural understanding of "Boomerangs" - former employees who departed the organization for some reason but who have decided to return.

There's simply too much at stake for your organization not to be talking about how it will recruit, develop, retain, and grow the next generation of leaders. You should assume that your competition already is.

Until next time...

Kincannon & Reed
April 2006