Government Unprepared for Boomers’ Mass Exodus
The mass exodus of baby boomers from the workforce has been a crisis in the making for years. Yet in many cases the public sector is still not prepared.
Explore the topic of aging in America through in-depth stories, data and interactive content at governing.com/generations.A little more than a decade ago, a report by the Pew Research Center’s Internet & American Life Project coined the now well known phrase “silver tsunami.” The report looked at the potential impact of the approaching retirement of baby boomers -- a wave of retirements that was expected to crash on public- and private-sector shores in 2011, when the boomers began to turn 65. It was an event that was forecast to continue throughout most of the next decade, leaving in its wake an unprecedented shortage of skilled workers.
But then the recession hit, and most of these baby boomers stayed put. Instead, the percentage of the workforce under 25 dropped 13.2 percent, according to the Bureau of Labor Statistics, while the portion of workers over 55 rose by 7.6 percent. The economic downturn may have given employers a respite, but it also may have done more harm than good. Baby boomers are lingering in the workplace, while millennials can’t find a job. And even when they do, it’s likely not with the government. Eleven years after Pew first reported on the silver tsunami, many in the public sector are still remarkably ill-prepared for the impending turnover in the workforce.
Delayed retirements should have been a blessing for state and local governments, an unanticipated grace period to engage in the kind of workforce planning they should have done years before. But the same economic turmoil that delayed the retirements also hampered governments’ capacity to manage. Budget cuts pushed planning to the backburner, and worse, cuts forced massive layoffs in several states and localities. Since seniority often plays a role in determining who goes, those younger employees who would have been promoted into the positions of retirement-eligible workers are, in a lot of places, gone. That leaves fewer employees to develop for the positions vital to government work.
But there are some bright spots, says Leslie Scott, executive director of the National Association of State Personnel Executives (NASPE). “One of the things the recession has done,” she says, “is make states look at the way they do business and make sure they have the right workforce.”
In Pennsylvania, for example, agencies collected data on the ages and skill sets of their employees, and used the information to determine which job functions would take the greatest hit after retirements. Armed with this, the state was able to undertake candidate searches targeted toward these positions. In Tennessee, recent civil service reforms brought about changes in hiring and put a greater focus on the skills needed to do a job rather than on one’s years of experience or seniority.
But most of the work done around succession planning so far has focused on knowledge transfer. This has been a particular area of concentration for Fort Collins, Colo., where officials in the utilities department became alarmed two years ago when they realized they’d be losing a record number of long-term employees to retirement in the next five to 10 years. Succession planning and knowledge transfer quickly became top priorities.
The department ultimately chose a two-phase plan. In the first phase, it pinpointed core competencies for various positions, assessed areas of risk within the workforce including both age and organizational structure, and identified the tools and opportunities to mitigate these risks. In phase two, a five-year plan was developed which included decisions about how to train its workforce for the jobs that will be important to its future.
The two phases included the development of a toolbox for managers to help them implement knowledge transfer and succession planning. These tools include allowing managers to temporarily rehire a retiree; phased retirement; an internship program; cross-training; an advanced notification process through which an employee can announce his or her intention of retirement several years out without fear of penalty or being overlooked for promotions; and a partnership with the city to develop young leaders.
One of the more unique tools available to managers is known as the expert interview. When the utility in Fort Collins first began laying out its two-phase plan, 10 senior leaders were identified as potential retirees within the next five years. Instead of waiting until the employees’ last days to conduct an exit interview, the utility brought in a consultant to interview each of the identified employees. The purpose of these interviews, according to Janet McTague, the city’s electric utility project manager, was to “learn about the flavor of the job.” These interviews documented the contacts, relationships and resources the employees use to get their jobs done. Although the utility didn’t have any evidence of former employees leaving a knowledge gap upon retirement, “I think [the effort is] more preemptive. We’ve had employees that we wish we had more information from,” says McTague. “We need to be proactive and do something about it before these people walk out the door.”
Washington state didn’t wait for dire predictions of a mass exodus to plan its future. It was an early adopter of knowledge transfer and succession planning, developing the road map “Workforce 2000” in the 1990s to pull together strategic objectives in staffing and identify key areas of need.
The state’s approach is unique in that it doesn’t rely on enterprisewide succession planning. Rather, Washington goes agency by agency because of the differing employment dynamics. “One of the things we’re focusing on today is trying to segment out our workforce into different disciplines and business areas,” says Mark Sullivan, senior planning and performance manager at the Office of Financial Management. By doing this, the state can look at the business drivers for those segments and see where they might have knowledge gaps. Right now, the state is giving a lot of attention to the IT workforce, looking at turnover, retention and age demographics, and figuring out what skills and abilities are necessary for the people they want to hold on to, acquire or develop.
Because Washington began planning more than 20 years ago, Sullivan says the state probably knows better than most what it’s looking for in terms of a future workforce. “The advantage of experience is you understand what questions to ask, even if you don’t necessarily have all the answers,” he says. The state has already learned a few lessons other states are just now realizing, like the different skills needed to manage or supervise at varying levels and how best to teach them. “Oftentimes with succession planning, especially with leadership positions, they try to lump it into one big category. We have a more sophisticated understanding about what kinds of skills we want at the supervisory versus senior executive level,” Sullivan says.
Washington’s foresight has certainly given the state an advantage, but whether that puts it in a better place to act when the time comes remains to be seen. Washington may have prepared early, but without the mass exodus -- and no indication of when it will start -- Sullivan says state agencies haven’t had a chance to put their preparations to the test.
Planning for the future wave of retirements isn’t solely about figuring out where the gaps will be and how to transfer the skills vital to those positions. Today’s challenge is as much about keeping the current workforce engaged in their jobs as preparing them for advancement. Fort Collins’ McTague says retention is as big a concern as succession. For one thing, younger employees have completely different expectations of what they want from a job. “Younger people want [work-life] balance,” McTague says. To that end, the Fort Collins utilities department is offering greater flexibility and opportunities for growth and education. “We’re trying to give younger employees opportunities and incentives to stay,” she says. “It’s a competitive world out there for good employees.” Currently, the utility offers benefits including flextime, the opportunity to work remotely, a tuition assistance program, and cross-training and shadowing, which McTague says “allows employees to interact on a one-to-one basis with an existing employee to determine their own capabilities, compatibility and interest in pursuing possible vacancies.”
Along those lines, a handful of communities are getting creative in the types of training and opportunities they offer young workers. In Albuquerque, N.M., for instance, the city’s training department offers a program targeted toward employees who desire managerial positions but don’t have the required two years’ experience. The participants are nominated for yearlong training that includes public speaking, business courses and leadership skills development. At the end of the year, and upon successful completion of a final exam, graduates of the program receive a two-year supervisory credit that can be used to apply for a front-line management position. Similarly, Boulder County, Colo., created the Leadership Academy, a yearlong program that gives some of the county’s 1,700 employees the opportunity to develop leadership skills.
St. Louis County, Mo., has also taken an interest in developing its young talent base. Late 20-somethings Katrina Sommer and Adam Roberts were working in the county’s Office of Community Development when it dawned on them that a large portion of the county’s senior workforce was eligible for retirement, but turnover was still low. Understanding the inevitable leadership transition, they began thinking about how they could prepare themselves and their peers to move into these positions. The pair created the St. Louis County Government Young Professionals Group and put together networking events, community-service activities and a speaker series for their 74 members. “It gives people that avenue to explore their intrinsic motivations for professional development [within] the county to make sure we keep the knowledge and we don’t have brain drain,” says Sommer, also noting that it keeps workers engaged in their jobs. It helps employees connect with the community, she says, which has the benefit of piquing their interest in government service because they see where they can make a difference.
While states, cities and counties cobble together what they can in terms of workforce and succession planning, the missing piece of the puzzle is when the boomers will finally decide to leave. As of 2011, more than 36 percent of employees at the state level and more than 35 percent at the local level were over age 50. According to an April 2012 study conducted by the Center for State and Local Government Excellence, more than 22 percent of its members report that employees are accelerating their retirement plans. Some of this increase can be credited to the uptick in the economy, and some to the recent retiree pension and health-care benefit changes imposed by some states and localities as budget-cutting measures. Still, it’s very hard to know when the silver tsunami will hit, says NASPE’s Scott. And as Washington state has already learned, with this much uncertainty, you can only plan and prepare so much.
What is certain is that millennials will make up 75 percent of the workforce by 2025. With that in mind, states and localities need to focus on attracting younger employees and training them for leadership positions. Otherwise, Scott says, “There’s not going to be people who know how to manage and lead.”