Workers will soon retire or walk away from their professions en masse, creating a brain drain for many companies. Fortunately, some firms are getting wise about recapturing the know-how of their older employees:

Companies that oust people over 50 because of cost-cutting concerns are doing so at their own peril, says a March 2005 Fortune magazine article. Even worse than facing age-discrimination lawsuits, they’re also risking the loss of valuable knowledge and experience. And with demographic data indicating that voluntary retirements alone will thin the ranks of older (and wiser) workers, this impending brain drain could be crippling.

Take NASA, for example. Since the National Aeronautics and Space Administration failed to retain the knowledge of engineers from its Apollo program (and has even mislaid crucial blueprints), the agency essentially has to start from scratch–at an estimated cost of $100 billion to taxpayers–to revisit the moon in the next 10 years, as the Bush Administration has vowed.

Companies have to act fast. This year alone, tens of millions of baby boomers are hitting 60. By 2010, more than half of the U.S. workforce will be older than 40. And in the next 10 years, huge numbers will retire or ditch their full-time careers. When this mass exodus occurs, younger workers will have to take over–something that many human resources managers feel that youngsters are unprepared for. Surveying 2,900 HR people, Boston-based consulting company Novations Group discovered that only one-third felt confident that up-and-comers in the company could seamlessly fill the leadership void that baby boomers would leave behind. “There’s an imminent leadership crisis at many big companies,” Paul Terry from Novations tells Fortune. “They have less management bench strength than at any time in memory.”

Fortunately, some companies–including General Electric, Dow Chemical and Northrop Grumman–are developing practices designed to retain the expertise of older workers and impart it to younger ones. What’s at stake is valuable tacit wisdom, as opposed to explicit know-how, which can be readily quantified and documented. “Tacit knowledge is more difficult to capture and communicate,” Scott Schaffar, Northrop Grumman’s director of knowledge management, tells Fortune. “It’s what is held in our heads and includes facts, stories, biases, misconceptions, insights, and networks of friends and acquaintances, as well as the ability to invent creative solutions to problems.”

Here are some of the methods being employed to keep crucial tacit knowledge within the company:

1) Formal mentoring. For Dow Chemical, mentoring is a cornerstone of its strategy for grooming future leaders. For instance, Dave Keppler, Dow’s chief information officer and vice president of shared services, serves as a mentor for 6 employees, with whom he meets individually every month. What’s more, he makes himself available for a dozen more people on an informal basis. According to Dow CEO Andrew Liveris, mentoring takes time to establish and flourishes in situations where it fulfills a compelling need. “People’s enthusiasm for being assigned a mentor really grew out of how difficult it was to get a bit of a manager’s time,” he remarks to Fortune.

2) Communities of practice. Think of it as mentoring on a bigger scale. Defense contractor Northrop Grumman has set up these companywide groups to allow for knowledge-sharing across divisions through face-to-face or online meetings. For instance, one such group invited just-retired project managers to host seminars and has set up a program in which young engineers can follow older ones around for a day or a week to learn the ropes.

3) Action learning teams. General Electric assembles people from a host of disciplines–say, manufacturing, marketing and finance–and gives them problems to solve together. This way, younger employees get a chance to crack complex issues and receive constant feedback on their performance. To supplement this program, GE also fast-tracks the most talented youngsters, entrusting them with “stretch” work that is designed to sharpen their thinking skills.

4) Part-time work. Keeping older workers–at least on a part-time basis–may soon become a more viable option. The Treasury Department and the IRS are considering new rules that will let people move into retirement slowly (current federal regulations prevent workers from collecting any payments until they leave their jobs completely at age 62 or 65). Once these new regulations take effect–perhaps next year–this approach will only gain in appeal.

5) Flexible schedules for older workers. Named the no. 1 employer for people over 50 this year by the American Association of Retired Persons, Charles Stark Draper Laboratories knows the value of flexibility. Draper, a high-tech research firm in Cambridge, Massachusetts, lets workers take six months off a year, work three days a week or adjust their schedules in any way to accommodate their needs.

6) Pooling resources. To address the mass retirement of baby boomers, Procter & Gamble and Eli Lilly formed www.yourencore.com, a network of more than 470 retired and semi-retired research scientists and engineers. Employers can hire people from this pool for short-term R&D projects. Boeing and National Starch & Chemical have recently become members.

Indeed, the knowledge and expertise of people nearing retirement represent a crucial resource that firms cannot afford to lose. Is your company gearing up for the impending brain crunch?

Source:

How to Battle the Coming Brain Drain
Anne Fisher
FORTUNE, March 7, 2005
www.fortune.com/fortune/fortune75/articles/0,15114,1034771,00.html