Putting it Off Until Tomorrow: Ernst & Young Aging Workforce Survey Shows Corporate America Forsees a Looming Wisdom Withdrawal but Delays Addressing the Issue
[26 January 2006 - Ernst & Young] A new survey conducted by Ernst & YoungLLP, ExecuNet Inc., and the Human Capital Institute reveals that, althoughcorporate America foresees a significant workforce shortage as boomers retire,it is not dealing with the issue at present and may be underestimating thestrategic challenges ahead.

The survey, The Aging of the U.S. Workforce: Employer Challenges andResponses, indicates that a little more than half of the respondents agreedthat the aging workforce is an issue that must be addressed. While almosttwo-thirds said that retirements will lead to a "brain drain" in theirorganization, less than one-quarter said that it is an issue that isstrategically very important.

"Approximately every seven seconds in America this year, a boomer turns60," said William Arnone, an Employee Financial Services practice leader inthe Human Capital Practice of Ernst & Young LLP. "Seventy percent of thesurvey respondents have not yet attempted to identify where business wisdomresides in their organization. This means one thing: corporate America isfacing a significant wisdom withdrawal."

While the survey illustrated that employers are putting off tackling theissue of an aging workforce, an overwhelming 90 percent said they arecommitted to putting formal retention programs in place in the future. Of the30 percent who have identified where business wisdom resides, only 67 percenthave formal processes in place to transmit that business wisdom to the nextgeneration.

"Right now, HR professionals are focusing on other things they consider tobe more pressing, such as governance and compliance issues," said Arnone. "Asthe looming 'wisdom withdrawal' becomes a more immediate concern, they willfocus their resources on the issue at that time."

Aging Workforce by the Numbers
* Of survey respondents who believe that the aging workforce is an issue that must be dealt with, 53 percent said it will lead to a workforce shortage.
* Sixty-three percent said that retirements will lead to a "brain drain."
* While almost 15 percent of respondents' employees are eligible to retire in the next 5 years, they estimate that just over 10 percent of their current workers are likely to do so.
* Approximately 40 percent noted that their top human capital concern is the availability of talent over the next five years. Other highly ranked areas of concern include retention of key employees and talent management (i.e., ensuring that the right employees are in the right positions).
* Over 85 percent had no formal retention programs in place. Of those who did, hiring retirees as consultants or contractors, retention bonuses, promoting a culture of generational diversity and pre-retirement planning programs proved to be the most popular.

Survey findings are based on responses from a sampling of senior humanresources executives from a cross section of some of the largest employers inthe U.S. in a variety of industry sectors. The survey was conductedelectronically from November 11, 2005, to December 21, 2005.