Managing Baby Boomer Retirement When You’re Not Allowed to Ask

(Bloomberg Businessweek) -- When a service technician with more than 30 years of tenure at Ingersoll Rand Plc told his bosses he was considering retirement—his knees were no longer strong enough for him to climb rooftops—they created a new job for him and urged him to stay on. Now he works part time from home. Less experienced technicians send him photos of the equipment they need to repair and, using their headsets, confer about how to proceed.

“They’re getting trained, and our older technician, who knows our products so well, can keep working with us for many more years,” says Michelle Murphy, chief diversity officer and vice president for global talent acquisition at the industrial equipment maker. She wants employees in their 50s and 60s, who make up about a third of the company’s workforce, to collaborate with managers about their retirement plans.

“If they suddenly announce they’re retiring in 30 days, that doesn’t allow time for them to transfer all the knowledge they have, so we’re inquiring: ‘What are your possible intentions? And, oh, by the way, instead of fully retiring, you can possibly work part time,’ ” she says. “We don’t lock people into a specific retirement date, we just want to work with them about their choices and our talent needs.”

With 10,000 baby boomers turning 65 every day—and continuing to do so for the next decade—employers are grappling with how to handle the exodus. They can’t assume all older workers will depart when they reach 60 or 65. Mandatory retirement no longer exists at most companies, and employees increasingly want or need to work through their 60s and beyond because of longer life expectancies and insufficient retirement savings. Yet managers must tread carefully when asking about retirement plans. Although they can inquire about employees’ interest in remaining with the company, for planning purposes, if they refer in any way to an employee’s age—with questions like “Aren’t you ready to spend your time golfing?”—they can be accused of age discrimination.

Only about half of employers have a clear understanding of when their workers will retire, according to a recent survey led by Robert Clark, a professor at North Carolina State University’s Poole College of Management, and Willis Towers Watson, a risk management firm. About 80 percent of survey respondents said their company has a significant number of employees approaching retirement age and acknowledged that managing the timing of their departures is an important business issue. But only 25 percent said they’re doing this effectively; about 44 percent said they were having difficulty finding workers with the same knowledge and skills as retirees. “A lot of companies don’t recognize the expertise of older workers until they’re gone,” says Martha Deevy, associate director of the Stanford Center on Longevity. “Then they have to recruit and bring new people up to speed, which is costly. It makes more sense to see if older workers want to stay longer and to make sure they transfer their knowledge before they leave.”

The largest military shipbuilding company in the U.S. does both. More than a decade ago, Huntington Ingalls Industries Inc. realized it was on the brink of losing thousands of its most skilled workers as boomers started to retire. “We’ve always grown our own talent and knew we had to plan for a very large transition,” says Bill Ermatinger, executive vice president and chief human resources officer.

The company, which has about 40,000 employees, now has multigenerational work teams, a rotation program enabling some workers to do different shipyard jobs for several months at a time, and reciprocal mentoring programs: Older workers pass on their shipbuilding expertise to younger colleagues while getting help from them on using new technology. They can work past traditional retirement age if they choose. The hourly workforce includes 31 silent generation employees who are in their mid-70s or older.

Every year, Huntington Ingalls identifies so-called legacy builders—employees who have knowledge it wants to document and preserve for up-and-comers. The company is recording videos of some of them as they perform tasks and talk about how they do their work.

Not all the legacy builders are older employees, and managers don’t mention the word retirement when seeking to record them. “I wouldn’t say, ‘I think you’re retiring soon,’ because maybe they aren’t,” Ermatinger says. “Instead, I’d likely say, ‘You’re the shipyard expert in this and this, and we’d love to know how you do it and share that with others.’ We’re targeting people with critical skills, not people of a certain age—so perhaps it’s a 65-year-old or maybe a 40-year-old.” Ermatinger thinks many companies don’t adopt such programs, because they worry about the short-term costs. “We always take the long view,” he says. “We want our employees with us for 40 years, not five.”

To contact the editor responsible for this story: Dimitra Kessenides at dkessenides1@bloomberg.net

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