Recruiters, leaders, and others involved in workforce planning are still navigating the confusing world of work brought about by the COVID-19 pandemic. One lesson we’ve all had to learn: we can be more proactive about anticipating and mitigating risk in advance of inevitable shifts.
One shift we know is coming: the Baby Boomer retirement wave.
But a generational shift doesn’t have to be a threat to your business—it can be an opportunity, if you seize it now.
How? With a dedicated strategy to attract and retain early career professionals.
The retirement wave is coming
Currently, around one third of Baby Boomers are already retired. Very soon—by 2030—every Baby Boomer will be over age 65. Although the number of people continuing to work into their later years is expected to increase, this number will not even begin to compensate for the millions of Americans who will soon enter full retirement.
This demographic shift will cause a great deal of churn, and the global economy is already at risk from an impending shortage of workers. By 2030, as many as 85 million jobs could go unfilled worldwide due to a lack of skilled talent.
Some industries will be more impacted than others. In the US, many industries with a high concentration of older workers—like government, insurance, manufacturing, and construction—are struggling to attract the next generation of talent, and are already facing labor shortages.
However, even industries with comparatively young workforces are feeling the effects—the median worker age is now above 40 in almost every industry.
How are you planning ahead?
Every industry needs a succession plan. Getting early talent in the door before the retirement wave hits is critical for multiple reasons, like:
- Cost efficiency: Trying to backfill senior employees as they retire is far more expensive than building a bench of future leaders through early-career hiring and development. It’s estimated that backfilling a seasoned employee costs up to 150% of the employee's salary, while hiring an entry-level employee can cost as little as 20% of their salary.
- Knowledge transfer: Research shows that when employee departures result in knowledge loss, the negative consequences are far-reaching, from reduced productivity to lower morale. Hiring early career professionals now can reduce knowledge loss by ensuring overlap between junior employees and those nearing retirement.
- Upskilling: Pairing more experienced workers who have critical institutional knowledge, with early talent who are more familiar with newer technology like AI, can help you mitigate knowledge loss, modernize your tech stack, build morale, and train entry level employees.
4 strategic threats early talent solves
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An early talent hiring strategy can help you future-proof your workforce
With four million students graduating from college each year, you can future-proof your workforce with a steady strategy to hire recent graduates and early career professionals. If you think you’re already behind, you can get started with these suggestions.
Support the college-to-career journey
Finding a first job is stressful, and students are looking for employers who will support them as they take the initial steps in their careers. One way to do this? Offer internships that give students a chance to experience the day-to-day routine in your organization.
Update your employer brand to attract early talent
This generation of job seekers and workers want to see their values reflected in your brand—like diversity, equity, and inclusion, sustainability, stability, and purpose-driven work. Your website and especially the careers page, your Handshake company profile, and the overall candidate experience should be infused with your brand. Leverage qualitative content like testimonials and reviews, and experiential elements like swag or creative recruiting events.
Make sure your compensation packages are current
If you’re struggling to attract the newest generation to enter the workforce, consider what they’re looking for from employers. Do your job descriptions provide pay transparency? Have you considered offering benefits like student loan repayment or a tuition assistance program? These signal to early talent that you’re attentive to how they’re evaluating employers.
Expand your qualified applicant criteria to fill the funnel
It’s time to release old-fashioned notions about what makes a candidate qualified. For example, is a four year degree strictly necessary, or are you missing out on talent who have associate’s degrees? Can you use skills-based hiring to identify candidates who are ready to hit the ground running—especially when it comes to in-demand tech skills—regardless of their major or degree?
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Invest in career pathing, training, and professional development to modernize your retention strategy
You can recruit and retain talent more effectively by making sure early career talent has a clear pathway for growth at your company, and by advertising professional development opportunities in your recruiting. If your industry is lagging behind, Gen Z wants the professional development it will take to embrace digital transformation.
Develop mentorship programs to reduce knowledge loss
The best way to reduce knowledge loss is to prevent it from occurring in the first place. Intergenerational mentorship programs are one way to create a more engaged and satisfied workforce, and some research shows they also help improve retention rates, further reducing costly turnover.
Early talent and the future of work
Whether or not you’re intentionally hiring Gen Z today, Gen Zers will make up 27% of the workforce by 2030. We may be able to anticipate population changes based on data, but future-proofing is still a work in progress that you can influence.