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The ‘Boomerang’ Effect: When Retirement Doesn’t Come Easy
By Anne Saita, Vistage Corporate Communications Staff
Baby
Boomers are reaching retirement age, but this doesn’t mean they are leaving
their jobs. That includes chief executives, who increasingly are sticking
around, thereby threatening to leave the next generation of leadership in
limbo.
These
executives’ reluctance to retire may currently seem like the saving grace
for a company. But down the road it could pose a significant problem for
those in line to succeed them and for an organization overall. If a younger
Boomer or Generation X key executive realizes top slots aren’t opening as
planned, he may grow restless, even resentful, and move on to another
company with more opportunity. Additionally, other staff anxious for a
change in leadership may also leave if succession – and the promise of a new
corporate focus-- stalls.
“Boomers,
generally speaking, refuse to retire,” explains Philippe Cesson, founder and
managing partner of Marketing Solutions by Cesson, a marketing, advertising
and public relations consultancy in San Diego. “This is the first generation
that’s really taking advantage of the progresses in medicine, alternative
health and just better health knowledge as a whole. ‘Sixty is the new 40’ is
what we hear again and again. In that context, it’s not surprising that most
of them do not see themselves idle in their later years.”
The AARP,
in fact, recently reported that 79 percent of Baby Boomers nearing 65 do not
plan to retire any time soon.
Radio
commentator Todd Buchholz recently described this phenomenon. “The
generation that shouted ‘Hell no, we won’t go’ is shouting it again. But
they don’t mean Vietnam. They mean: ‘We’re not dying.’
“People
who retired in 1950 on average lived another 12 years. Now that number has
doubled,” Buchholz notes.
There’s
another element to the “Boomerang” effect: during today’s tightening
economy, some CEOs are delaying or even returning from retirement to help
their companies through hard times. Others fear their own retirement
portfolios have lost too much value to leave the workforce at a previously
targeted date.
Defining a Generation
Small to mid-sized businesses in particular must struggle with how best to
transfer the extensive knowledge that the aging Baby Boomers and younger
Traditionalists now possess but refuse to impart for fear they will be
thrown out of office. The scale of this challenge is unprecedented, given
the demographics’ sheer size in today’s executive workforces.
Sociologists have different definitions for each generation, but today’s
workforce basically breaks down as follows:
Traditionalists:
These are people between 63 and 83 years old. They tend to be structured,
loyal, and respectful of authority. They respond to command-and-control
because the landscape created by their predecessors came from the military,
according to Sherri Petro, president of San Diego-based VPI Strategies, who
specializes in multigenerational workforce communications.
Baby Boomers:
Those now 44 to 62 years old comprise this generation, which is the largest
in U.S. history. For Boomers, work is all about respect and personal and
professional development. They are idealistic, materialistic and struggle
with work-life balance.
Gen X:
Workers between 28 and 43 years old are in general fiercely independent
straight-talkers. They are results-oriented (whereas Boomers are
process-oriented) and are redefining the concept of teamwork as more of
collaboration after individual introspection rather than group
brainstorming.
Gen Y:
Also known as “Millennials,” these employees aged 27 and younger currently
are the masters of multitasking. They are most comfortable with technology
and understand the new mandates of Web-based global business as the first
generation of “digital natives.” They seek constant stimulation – and
praise.
When
viewing a four-generation workforce, consider these statistics from Lee
Hecht Harrison, a national human resource consultancy focused on executive
placement.
-
Gen X and
Gen Y now collectively make up slightly more than half of the U.S.
workforce.
-
Baby
Boomers comprise 41 percent of the workforce.
-
For every
employee who enters the workforce, two leave; this will create a
nationwide labor shortage within the next decade
-
The
Conference Board predicts that, within two years, 40 percent of the U.S.
workforce will be eligible for retirement; however, not everyone will
leave their jobs.
Petro
sees the same retirement reluctance as Cesson, but more so between Boomers
trying to move into positions currently held by younger Traditionalists.
“One of
the things I’m finding is when Traditionalists move out, they seem to want
to do it at a slower pace, first working reduced hours, rather than retiring
next week. It’s a gradual retirement, resulting in almost an impatience for
the Baby Boomers,” she says. “Because power and prestige are big hallmarks
of that generation, they really want to take the reins and go.”
Mentoring and Coaching
So what can be done to break up these multigenerational logjams before
rising resentment overwhelms an organization?
Incoming
leadership must recognize their successors’ reluctance to leave their posts.
“Rather than officially cutting the current leadership off at a given date,
they need to leave them with some involvement in the company, not as
decision-makers but more as corporate evangelists,” Cesson recommends.
“Encourage them to take those long vacations they’ve always put off for so
many years,” he adds. “It’s amazing how quickly, after taking wine tours in
Europe and trekking in the Andes, most Boomers readjust to lives outside of
their former employers.”
It’s also
important that Gen X and Gen Y leaders be properly groomed for succession,
whether by the outgoing chief executive or an organization focused on
executive performance. This helps narrow the knowledge and generation gaps
in companies where succession plans are pending. It also helps fill a void
left by busy CEOs still focused full-time on running a company rather than
preparing new leadership.
“Mentoring and coaching looks different in each generation,” Petro explains.
“Gen X wants informality and to create their own hybrid solutions while Baby
Boomers prefer a more structured group setting and expects their ideas to be
taken as is. Gen X wants to generate new ideas, whereas Baby Boomers prefer
to run with the ideas placed before them.”
She adds:
“Gen X tends to be big picture-oriented, and coaching and mentoring can help
them fill in where they haven’t been able to see all of the pieces.”
Adds
Cesson: “A good mentor is a person who is genuinely interested in the
success of the mentoree and can bring perspective to the events happening to
him or her. A change in leadership can be devastating for any business, and
a good mentoring program will definitely smooth the transition.”
Sound
mentoring must go hand-in-hand with an HR department’s increased focus on
the direction the company is taking, resulting in an infusion of new skills
training and programs. New executives also need to be upfront about where a
company is heading as soon as they take over, spending time with each
employee where possible, to show they remain important, he says.
Finally,
do not underestimate the power of positive feedback.
“We all
seek reward for the work we do and want to believe that we’re contributing
something important to our world,” Petro says. “That’s consistent throughout
all generations.”
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