As Baby Boomers near retirement, businesses are grappling with the unavoidable challenge of replacing their top management and executives. Hiring for executive-level positions is time-consuming and expensive, especially when making an out-of-organization hire. Making a poor hiring decision when it comes to management can also be detrimental to an organization’s functionality, not to mention reputation. With such potentially catastrophic consequences to a failed succession, why aren’t businesses prioritizing planning for the inevitable?
Baby Boomer Facts
The facts concerning the Baby Boomer generation are hard to ignore:
- As of 2016, 70% of executives were at least 50 years old. Now, three years after this survey, this statistic is even higher.
- 30% of executives will be eligible for retirement by 2021.
- As of January 1st, 2011, ten thousand Baby Boomers will reach the retirement age of 65 every day until the year 2030.
- Baby Boomers make up the vast majority of C-Suite executive employees across the nation.
Lack of Preparation
These statistics clearly show that retirement of the Boomer generation is imminent. But regardless of this fact being common knowledge, data also shows that organizations are not preparing themselves to properly make the transition to new leadership. This lack of preparation is proving to have expensive results. The Harvard Business Review sites a study of 2,500 of the world’s largest public companies, which found that organizations that appoint new CEOs without a succession plan lose an average of $1.8 billion in shareholder value.
Big Shoes to Fill
The retiring Boomer population will leave big shoes to fill, and lots of them. So much so that the following Gen Xers won’t be able to fill them all, meaning that some businesses will have to rely on Millennials to step in. Organizations are already noticing gaps between the experienced and managerial skillsets of Boomers and those of the ambitious, but less-experienced Millennials. This points to a potentially small pool of qualified candidates to fill opening roles. Businesses will need to strategize on how to handle this “leadership gap,” in order to attract the best possible candidates for leadership positions.
Workforce Evolving Priorities
It will be critical to understand the evolving priorities of the workforce to develop such a strategy. And as we’ve summarized here and here, Millennials look for more than just a salary as they make employment decisions. Don’t let the inescapable sneak up on you. Ensure that your organization is prepared to attract and retain the right talent. Armada’s Ultimate Health product is specifically designed for leadership; offering a plan that covers expenses of executives who tend to spend their health care dollars differently is an effective way to retain the talent you have and compete for new talent. Reach out to us today to understand how Ultimate Health is the perfect addition to your benefits package to attract and retain your C-Suite talent.