BABY BOOMER BRAIN DRAIN [INFOGRAPHIC]

April 28, 2015 

The U.S. workforce is headed for a dramatic shift. As baby boomers retire, organizations will face a growing shortage of experienced workers and a significant talent gap. Today, baby boomers account for 31 percent of all jobs—and 56 percent hold leadership positions. Baby boomers also own more than 4 million companies. What does this mean for employers? How can companies fill the gap as skilled workers leave the workforce? In the following infographic, MBA@UNC takes a closer look at the facts that surround baby boomer brain drain. The infographic illustrates the effect that baby boomers have in the workforce today, how their retirement will affect the businesses of tomorrow and what companies can do to leverage senior talent and prepare for the future.

  • As baby boomers retire over the next two decades, organizations face a growing shortage of experienced workers and a significant talent gap.

    However, by engaging senior leaders and creating knowledge transfer opportunities, companies can gain a competitive advantage and turn the brain drain into a brain trust.

    What Is Brain Drain?

    Brain drain is the flight of human capital from the workforce. The term brain drain is often used to describe the movement of well-educated and highly skilled workers from one country to another. However, brain drain is not always linked to emigration.

    In the U.S., the chance of top talent emigrating to other countries is low. The U.S. is ranked No. 3 in the world for its capacity to retain skilled professionals1.

    The rankings are as follows:

    1. Switzerland
    2. Qatar
    3. The United States

    For businesses in the U.S., retiring baby boomers are the primary factor behind brain drain.

    The Impact of Aging Baby Boomers On The Workforce

    Baby boomers are the largest generation in U.S. history.

    24.3% of the total U.S. population are baby boomers2.

    31% of the workforce are baby boomers3.

    56% of baby boomers hold leadership positions4.

    In 2011, the first baby boomer turned 65 years old. Over the next 19 years, 10,000 baby boomers will turn 65 each day.5

    In 2029, all baby boomers will be 65 years and over2.

    By 2030, the number of people over the age of 65 is projected to double to 71.5 million2.

    Where Brain Drain Will Have The Most Impact

    The states with the highest percentage of baby boomers out of the total adult population include6:

    • Maine: 36.8%
    • New Hampshire: 36.4%
    • Montana: 35.4%
    • Vermont: 35%
    • West Virginia: 34.8%
    • Michigan: 34.1%
    • Connecticut: 33.7%
    • Wisconsin: 33.6%
    • Ohio: 33.5%
    • Alaska: 33.5%

    Knowledge-intensive industries will experience brain drain most acutely. Some of these industries include7:

    • Education
    • Petrochemical Utilities
    • Finance
    • Federal Government
    • Engineering
    • Defense Manufacturing

    Businesses owned by baby boomers will also be affected:

    4 million companies, which make up 66% of all businesses with employees, are owned by baby boomers8.

    An estimated $10 trillion worth of businesses will change ownership in the next 20 years8.

    What Companies Are Doing To Prepare

    62% of employers at Fortune 1000 Companies believe that future retirements will result in skilled labor shortages over the next 5 years9.

    Despite this concern, few employers are actually doing anything to reduce the impact that brain drain will have on the organization9.

    68% of employers have not analyzed the demographics of their workforce.

    77% have not analyzed the retirement rates of current employees.

    Only 19-37% of employers have taken action to prevent baby boomer brain drain.

    Why Companies Should leverage Baby Boomers Before They Retire

    Senior leaders can pass on critical knowledge and skills that are difficult to replace.

    Many senior workers are willing to help train the next generation of leaders and leave behind a positive legacy in their organization.

    By pairing senior leaders with emerging talent, an organization can help benefit both parties9.

    Understanding Seasoned Workers

    The Myths

    • Less productive than greener workers
    • Unmotivated and unable to learn new skills
    • Preoccupied with the past and uninterested in the future
    • Old-fashioned and traditional
    • Resistant to change

    The Truth

    • More dependable than greener workers
    • Strong work ethic
    • Willing and able to learn new skills
    • Possess higher math and writing skills
    • Experienced in handling change and dealing with people

    5 Steps to Avoid Brain Drain

    1. Conduct a strategic workforce analysis.
    2. Refine your retention strategy.
    3. Identify, prioritize and engage potential retirees.
    4. Prepare senior and emerging leaders.
    5. Create knowledge transfer opportunities.

    Passing the Torch to Millennials

    As baby boomers retire, more and more millennials are continuing to enter the workforce. Millennials will make up 50% of the U.S. workforce by 202010.

    75% of millennials want a mentor11.

    65% of baby boomers say that millennials have sought them out for guidance12.

    58% of millennials turn to baby boomers, rather than generation X, for professional advice12.

    Millennials are eager to learn and make an impact, and they are known for their energy, ambition and enthusiasm.

    Baby boomers, meanwhile, offer a level of experience and knowledge that is difficult to replace.

    By actively facilitating the transfer of skills from baby boomers to millennials, companies can mitigate the effects of brain drain and prepare millennials  for important leadership roles.

    Sources

    1 http://www.statista.com.libproxy.lib.unc.edu/statistics/264654/ranking-of-the-20-countries-with-the-lowest-emigration-of-skilled-professionals/

    2 http://www.cnn.com/2013/11/06/us/baby-boomer-generation-fast-facts/

    3 http://www.gallup.com/poll/166952/baby-boomers-reluctant-retire.aspx

    4 http://www.rac-tqi.com/index.php/blog-archives/82-baby-boomers-in-leadership

    5 http://www.pewresearch.org/daily-number/baby-boomers-retire/

    6 http://www.aarp.org/politics-society/history/info-2014/map-where-boomers-live.html#/

    7 http://web.mit.edu/coughlin/Public/Publications/AgeLab%2012%202008-1%20Coughlin%20Wide%20Version.pdf

    8 http://blog.genequityco.com/bid/70298/Baby-Boomer-Business-Owners-and-the-Importance-of-Exit-Planning

    9 http://www.kenan-flagler.unc.edu/~/media/files/documents/executive-development/passing-the-torch.pdf

    10 http://www.forbes.com/sites/jeannemeister/2012/10/05/millennialmindse/

    11 http://execdev.kenan-flagler.unc.edu/how-to-build-a-successful-mentoring-program-1

    12 http://hbr.org/2009/07/how-gen-y-boomers-will-reshape-your-agenda

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