Is Your Company Ready for a Retirement Tsunami?By Guest Author | Posted 2015-01-16 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
The problem with the coming wave of retirements is not just the loss of technical expertise. It's also the loss of those employees' subject-matter knowledge.
By Peter Goth
There are risks when it comes to retirement: not the risks an individual faces when they retire, but the risks that an organization faces when skilled, subject-matter experts retire from the organization and take legacy knowledge with them.
Ten years ago, I was the oldest employee at Infusion, but I was still one of the younger faces walking into the government offices that I worked with. I saw example after example of projects that had to be fast-tracked because the only person in the organization with the appropriate knowledge was retiring in a few months.
Fast forward to today to see what has changed. On one hand, I am no longer the oldest employee at Infusion (just very close to it), and my role has transformed over the years. On the other hand, retirement remains a critical issue for both private and public sector organizations as a growing number of Baby Boomers retire.
The financial meltdown in 2006 and 2007, coupled with the slow recovery, created a wrinkle in the retirement plans of many people, but the speed of technology innovation remained. Now, organizations are recovering and can afford to start implementing the latest, most powerful technology systems. However, the delay we experienced in retirements is ending, and we still don't have a solution to the situation.
I have seen organizations put in place very good practices, while others continue to wear blinders. Too often, management thinks it can hire off the street or use offshore resources to stem the coming tide of experience loss, but it's not that simple. The problem is not just the loss of technical expertise when employees retire. It's also the loss of the subject-matter knowledge those workers have accrued.
Understanding the rules and regulations of pension or tax systems, client processes and arcane business rules that keep the organization running are just a few examples of the knowledge that's locked in the minds of individuals who are getting ready to ride off into the sunset.
When an organization faces the end of the life of a computer system, they are often overwhelmed by the sheer magnitude, cost and time required to replace legacy code that was developed, extended and supported over decades. A cycle typically starts with a vision or charter to replace the legacy system, followed by RFIs or RFPs crafted for the project—and then postponement when costs and timelines put the project out of the current budget.
With the expected loss of knowledge of legacy technology stemming from planned retirements, it would be best for organizations to begin planning the transition of their systems to the latest, innovative technology before the tide of retirement kicks in.
There are great examples of how organizations can plan for system renewal. When I had the honor of serving as a school board trustee, our management team was incredibly proactive in building succession planning for our leadership.
Facing a retirement exodus of up to 70 percent of the school's leadership over the next eight years, the board developed a comprehensive succession plan. It identified potential leadership candidates and worked with them to build the education and skills that would be needed to grow into new leadership roles. The result was organically building the leadership needed within the board's staff, providing career growth opportunities for teachers and bridging the gaps identified as the existing leadership retired.
The example provided by the school board is relevant because it shows how an organization can harness the knowledge of retirees before it disappears, thereby helping to deliver a successful transition. The board anticipated and planned for the need for senior staff positions, creating a medium- to long-term plan that addressed that need. It was a steady investment over time, rather than a large outlay in which they would be competing for a very limited pool of resources.
A computer system upgrade or replacement is always difficult, but it will be exacerbated if no one on staff understands the legacy technology in place. That's why it's essential to develop a program that prepares outstanding junior staff members for senior positions that become vacant when employees retiree. This approach also enables future retirees to share their knowledge in order to ensure an easy transition from a legacy system to a new, innovative platform.
Organizations can start with a vision or charter, but they need to have a long-term plan that leverages existing resources, as well as new technologies, people and thought leadership to truly get the job done right.
As chief architect at Infusion, Peter Goth provides strategic and tactical advice for clients, bringing to each project more than 10 years of experience at Infusion and 30 years in the industry. His diverse background includes being a teacher, mentor, facilitator, developer and elected official.