Updated: Dec 1, 2020
Studies suggest that over the next 10 years, seniors (baby boomers) in the United States will exit the workforce at a rate of about 10,000 per day. The Baby Boomer generation is made up of people who were born between the years of 1945 and 1964. Among these retiring Baby Boomers will be leaders of various levels; chief executive officers, chief operations officers, chief finance officers, supervisors, managers, mentors, trainers, etc. When these leaders leave the workforce, they will take a wealth of knowledge, experience, training and wisdom with them. If that doesn’t alarm you, consider this. The next chronological generational group is Generation X, which consists of people who were born between 1965 through 1979. Generation X has approximately 25 million less people than the Baby Boomer generation. This means that roughly ten years from now, there will be a significant deficit in personnel who will be qualified to fill those newly vacated leadership positions. In other words, many companies will struggle to survive as they will face serious challenges in their succession plans.
One aspect of this problem is that many organizations suffer because executive leadership often waits too long to consider the validity of their succession plans. This is something that must be addressed regularly throughout the life of the organization. Just as a business plan is critically important to a new business, a viable and realistic succession plan is just as vital because it forecasts and ensure the survivability and longevity of that organization. When leaders phase out of an organization, is the organization truly ready for the transition of leadership? Unfortunately, organizational leadership and business owners alike, often find out the real answer to that question the hard way. The good news is that organizational leaders across the country realize that there is a true problem on the horizon. That would explain why organizations across the United States are spending $166 billion annually on leadership development. However, the bad news is that many organizations say that their leadership development programs are ineffective.
Another aspect of the problem is that leaders will need to consider the huge disparity in vacant positions to the number of qualified personnel that can fill them. Since there will be such a large disparity, leaders will have to look to the next chronological generation pool for candidates to fill these leadership positions. This group is called Generation Y, often referred to as the “Millennials.” This group consists of individuals born between 1980 and 1994. Unfortunately, when an organization is trying to fill key leadership positions, they must select candidates from a pool of individuals where the oldest members are only forty years old, there will be serious cause for concern.
At a minimum, organizations must take a serious look at changing the way they are training their young leaders. The days of old and the usual ways of doing things are no longer going to be effective. Organizations must work hard to find effective ways to train the young millennials who will be working as peers with the Generation X leaders who will also be transitioning into key leadership positions. This means that organizations will need to find and incorporate leadership training and development programs that can bridge the gaps in leadership between multiple generations. Organizations that figure this out sooner rather than later will be in much better standing than those who don’t. For the next ten years, succession planning should be at the top of every organization’s list of priorities. For those organizations that are already aware of the urgency of succession planning, the next step would be to develop training programs that match the key leadership competencies that you identify in your strategic plans. Remember this! The key is leadership training and development that helps organizations to fill the damaging gaps in leadership that can destroy an organization.