Several years ago, the most critical generational issue facing CPA firms was attracting and keeping bright new talent. Today, the generational scales have tipped; it's no longer the youngest employees who are causing concern - it's the most experienced employees.
In this article we'll explore:
* Trends in Baby Boomer retirement: Will they stay or will they go?
* The Boomer ceiling: How to develop up-and-comers when there's less upward mobility.
STAYING OR GOING?
Search for "Baby Boomers Delaying Retirement" and Google spits back 215,000 results. Dig a little deeper, and you'll notice that these articles didn't just start appearing during the McCain vs. Obama run-off. As early as 2000, Boomers began to realize that they'd saved too little - and would get too bored - if they traded in their swipe cards for sweat suits.
According to the Health and Retirement Survey released by the University of Michigan Institute for Social Research (which has been tracking these matters since 1992), "Baby Boomers are expecting to work longer, perhaps presaging a reversal in the century-long trend toward earlier retirement. Compared with 1992, in 2004, a substantially larger proportion of people in their early to mid-50s expected to work after 65."
Like Starbucks, Pottery Barn and using Blackberries during meetings, delaying retirement is a Baby Boomer invention. A Boomer's parents may have lunged at early retirement and pointed their Cadillacs toward Sun City, but Boomers are plowing a different path.
Why are Boomers staying in the workforce longer? Contrary to popular speculation, it's not just the money, honey.
In their September 2009 report, "Recession Turns a Graying Office Grayer," the Pew Research Center discovered the most popular reasons adults over 65 say they work:
1. To feel useful/productive (68 percent).
2. To live independently (59 percent).
3. To give myself something to do (57 percent).
4. To be with other people (56 percent).
Turns out that the generation that marched together, "made love, not war," and replaced the hierarchy with work teams just wants to keep making a difference in the company of friends. You know the old-timer who quit practicing years ago, but still comes to the office to read his paper, drink coffee, and talk shop? Well, it may be time to get a bigger coffee pot.
THE BOOMER CEILING
Since Boomers are going to hang out longer in your firm, it's best to prepare for what some next gen'ers are calling "The Clog."
A CIO in Ohio calls it "stagnation." He says, "Our younger employees are sort of stuck. Their [Boomer] bosses aren't retiring, so there's less upward mobility. And the job market is slow, so the normal circulation of new people and ideas has also stopped. It's creating a stagnant work environment, and we're trying to figure out how to keep our younger employees challenged."
Not that next-gen CPAs are complaining. In the words of one, "I don't resent that our partners are delaying their retirement. I mean, we're all dealing with this economic situation. But I don't want to get stuck doing the same thing I've been doing for the last few years, just to preserve the status quo. I want room to grow and develop."
Many firms understand this, and are taking transformative steps to ensure that their best and brightest aren't stuck, stagnating or stifled. Here are a few best practices:
1. Make room at the leadership table. One of the profession's leading consultants, Allan Koltin, sees many firms rewriting their partnership agreements to redefine what retirement is (and isn't). He also sees more part-time partners emerging. "Fortunately, most of the partners staying on realize that they have to give up equity (and voting rights) to continue to clear the pathways for younger partners to grow with the firm," he said.
Part-time partnership may be especially attractive to female employees with families. The Pew report showed that 61 percent of moms (compared to 19 percent of dads) favor a part-time work arrangement versus a full-time arrangement.
2. Talk about - and with - your high potentials. Historically, after recessions, there's increasing turnover at firms as employees look for better opportunities. Executives realize that high-potential employees are among the most expensive to replace and leave the biggest shoes to fill. For that reason, it's important to talk with high potentials about their career trajectories, and work together on individual plans to keep them engaged with the firm over the long term.
3. Realize that Boomers (ages 48 to 65), Gen Xers (ages 27 to 47) and Millennials (employees ages 26 and under) work for different reasons. Younger employees favor development opportunities and life-work balance over pay, while older employees prioritize the importance of feeling connected to their work. This gives ample opportunities to create custom work plans for critical employees. Simply asking them, "What would you like more of, to feel fulfilled with your life and career?" is a great place to start.
Bottom line: Boomers staying in your firm longer can be a good thing - if you can engineer arrangements that allow all generations to get what they need from work.
Rebecca Ryan is the founder of Next Generation Consulting (http://nextgenerationconsulting.com/), which studies the work preferences of younger employees, as well as a member of The Advisory Board.
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