The term "retirement brain drain" refers to generational workforce changes that can have a negative effect on all employers – including the public sector. Retirement brain drain involves the wisdom and experience that a career professional accumulates over his or her lifetime. The idea is that a larger-than-usual amount of retirement takes away more of this accumulated knowledge, and employers have to replace this talent with less skilled and untested individuals. Retirement brain drain can create a "talent vacuum" or loss of institutional knowledge.
According to the Center for Retirement Research, a significant number of Baby Boomers employed in State and Local Government are expected to retire within 3 to 7 years, with the first noticeable spike to take place by the end of 2016. To elaborate, Baby Boomers are those born in the years following World War II, at which time there was a marked increase in the birth rate. The most common time frame used to identify “Boomers” are individuals born in the years 1946 to 1964. It is important to note that in 2016 this group will be between 52 and 70 years of age. In a recent survey, conducted on State and Local Government employees, the average expected retirement age stated by the survey participants was 63. This is beyond the retirement eligibility of most governmental plans. Addressing the question of delayed retirement, 69% of the respondents in the survey stated that various cost of living factors and the recession that began in 2008 created opposing forces to their early retirement plans, even though they would be eligible and vested.
As public sector organizations increasingly rely on smaller work forces to deliver quality services, the value of work force intelligence cannot be overstated. There is little doubt that all levels of leaders in government should be at the forefront of addressing this looming loss of accumulated knowledge. Organizations that have embraced a “Talent Management” philosophy are beginning to realize the benefits of a proactive approach to a potential loss of its intellectual capital.
Talent Management is an organization’s commitment to recruit, develop and retain the most talented and proficient employees available in the job market. Talent Management is not simply a Human Resource function or something that can be initiated in the middle of a crisis. It involves understanding the organization’s long-term goals and objectives in conjunction with identifying the critical work needs. In addition, Talent Management programs must include workforce trends and predictions. Organizational change comes from the top, and leaders from all organizations must deal swiftly and strategically with the changes our work force will undergo in the immediate future. The steps to create a Talent Management program are shown in Table 1. This article explores the basics of creating steps 4 (Identifying Competencies) and 8 (Individual Development Plans) from the list of Talent Management steps to help minimize these looming losses.
First some definitions: In an Individual Development Plan (IDP), identified in the Table as “Step 8”, there are objectives and goals that that are driven by technical skills and are necessary for completion of the essential job duties…“What” gets done. However, competencies are an important component to the IDP that are vital in predicting long-term success in the position and enables the positive completion of objectives and goals. The defined competencies for
success in a position are more difficult to develop and are sometimes overlooked in the Talent Management process. These behavioral-driven competencies are effective tools to help promote “How” the work gets done. Competencies are person-related capabilities and can be written as measurable and observable job-related behaviors. Think of competencies as the clubs in a golf bag. In the hands of a professional, the appropriate club (competency) is used in the right place and circumstance, often unconsciously.
A competency model in an IDP has two major advantages. First, it is a description of expected performance stated in behavioral terms or “best in class” for the position in question. Second, competency models do not date as quickly as position descriptions and do a better job covering hard-to-define interpersonal requirements at different levels of responsibility.
The steps to develop the behaviors and competencies in the respective model (Step 4 in Table 1) are as follows: 1) Delineate the outcomes expected from successful performance in the position. Make certain these outcomes are in alignment with the organization’s goals and objectives, 2) Determine the behaviors that drive success in these outcomes, ensuring they are observable and measurable, and 3) Develop the model of core competencies titles (i.e. Teamwork, Self-Management, Leadership) that match the behaviors for that position. Remember, there can also be a set of organizational competencies that cross department lines. In large departments, a set of core competencies for the unit may be appropriate.
To be effective, participants in a Talent Management program must be evaluated based on the results they receive (current productivity) and on the competencies and behaviors they demonstrate. The IDP tracking document (form) can be designed to meet your needs but it should have an area for competencies with behaviors listed below each and a separate area for objectives with clearly defined timelines. Goals for the time period can be set for both competencies and objectives. The performance management cycle is shown in Table 2 and the frequency will depend on the timeline set in “Planning and Goal Setting”.
At its core Talent Management is about developing people. In these times of accelerated retirements, it is the process of identifying and preparing suitable employees for key positions as incumbents leave those positions for whatever reason – retirement, advancement or normal attrition. This can be accomplished in various ways including mentoring, training, individual development plans and job rotation.
In closing, without a roadmap, even the savviest traveler occasionally gets lost. To address the projected brain drain and loss of institutional knowledge strategically, governmental agencies must develop a strong vision and a stronger plan. This plan can be implemented over time, but it must have clear goals and time frames to avoid becoming mired down in processes.
From top management to line supervisors, there must be a shared sense of urgency about the potential challenge. To slow down the coming loss of instructional knowledge, organizations must commit the resources to tackle the challenges (and opportunities) of “retirement brain drain” strategically and intentionally, while there is still time.
For more information on this topic, or to learn how Baker Tilly municipal specialists can help, contact our team.
Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP, an accounting firm.
 Center for Retirement Research, Boston College. Retrieved May 2016 from http://crr.bc.edu/