Managing risk means managing intellectual talent

Is your organization ready to lose up to 25 percent of its intellectual capital in the next decade? More than one quarter of the U.S. working population will be old enough to retire in less than three years. Add this flight to an average job stay of four years, and businesses in America are at risk. America is poised for a brain drain so dramatic that many companies will find themselves unprepared. Without sufficient intellectual capital, a company may not be robust enough to meet opportunities as they arise.

Here are some possible solutions companies can take to manage the looming brain drain.

Analyze current work force strengths and talents to determine core competencies.

If only a few co-workers know an employee’s expertise, then it is useless to the organization as a whole. This knowledge becomes an information silo, a vertical information cluster not transmitted laterally to co-workers. Analyzing employees’ expertise and knowledge and categorizing to make it accessible by other employees will improve and strengthen your work force.

Determine potential flight risks.

Talk openly with employees considering retirement or experiencing life difficulties to determine how you can retain them. Flexibility is the key—the employee may need more time off, greater leeway to work non-core hours or to work at home. If your organization doesn’t offer Family and Medical Leave Act (FMLA), consider allowing FMLA leave. Offer incentives to delay an employee’s departure.

Prepare to replace exiting information agents when those employees retire.

In smaller organizations, this process may be informal, but larger companies must proactively manage the intellectual loss and replace it. Companies must develop time frames and provide incentives so that newer information agents can become experts on specific topics before the need arises.

Hire retiring employees as consultants.

With the increasing cost of medical care for retirees, many welcome a supplement to their retirement income. Adding benefit package components that appeal to older workers, such as long-term care insurance or prorated health coverage for part-time work, will help retain them.

Use technology to drive inter-company communications.

Intranets, videoconferencing, peer-to-peer technology, and podcasts are information portals that allow workers to communicate over distance and varying time zones. Encourage workers to develop virtual relationships to share ideas and solve problems using these tools.

Establish “practice communities” where individuals from various departments—claims, underwriting, marketing and reinsurance—meet regularly to solve problems.

With today’s sophisticated technology, organizations do not have to rely solely on local talent. A company-wide initiative can be readily implemented by your organization’s information technology department. Practice communities build virtual relationships, which in turn make employees feel more connected to the organization.

Organize and memorialize practice community results with wikis, a decade-old web application that allows many people to collaborate on a single document.

There are several sites dedicated to collaborative writing, including www.writeboard.com and www.writer.zoho.com. Visit www.wikipedia.org, the on-line encyclopedia written by collaboration, to view an example of wiki technology at its finest.

Implement a mentoring program.

Many organizations have implemented mentoring programs. A new industry has sprung up assisting businesses in implementing programs.

Pool knowledge across organizations.

Your Encore, founded by The Procter & Gamble Company and Eli Lilly and Company, is a society of retired research scientists and engineers who provide consulting services. The insurance industry is particularly well suited to this approach because risk pools changed the face of insurance, so the models to implement this approach are already well accepted by our industry.

Build a culture that values expertise.

To prevent brain drain, an organization must develop an atmosphere that values aging workers and the knowledge they possess. Recognizing, but more importantly, acknowledging their overall contributions to the organization, not just the number of invoices they process or the amount of new business they produce, may mean keeping employees just a few years longer.

Support membership in professional organizations.

‘Support’ means paying dues and supporting the absences necessary for employees to both attend conferences and to hold committee positions. There has been a mindset in many industries that allowing employees to network outside the company increased the employee’s flight risk. More enlightened managers realize that if employees feel valued for their expertise and encouraged in their professional development, they are generally more loyal to their employers.

Offer incentives for obtaining further education.

Governmental organizations and industry giants like Sun Microsystems provide educational resources such as centralized training and reimbursement for tuition for business-related classes. Can your organization offer the same thing?

Avoid the human resources “silo.”

Human resources departments often act as “silos,” gatekeepers in the hiring process, by determining which applicants are interviewed. Form inter-departmental hiring panels, teams that develop job descriptions, review applications and give input on hiring and other issues like employee retention.

Don’t underestimate the impact of generational gaps.

There are four generations of workers in today’s diverse work force. Intergenerational teams can bring divergent employees together where they can benefit from each others’ strengths, not just complain about weaknesses. Technologically proficient younger workers who are good communicators can train older workers in new technology to bridge two gaps—the generation gap and the technology gap. In turn, older workers can mentor younger employees and model appropriate, ethical behavior.

Consider the Total Cost of Jerks (TCJ).

Verbal abuse, intimidation and bullying are widespread in the American work force. Some employers are taking notice. There is a growing trend to consider the TCJ impact on the work force, including several organizations on Fortune’s “100 Best Places to Work.”

Older workers don’t always have the patience to put up with twits. That jerk in the cubicle next to a long-term employee may be the final nudge that pushes a valued older worker out the door. Most employees who have options tolerate jerks for just so long, and then they clean out their desk.

Don’t overlook diversity.

Many employees are overlooked in the promotional process because they are different than the dominant makeup of an organization. Whites follow a different career path than their non-White counterparts, according to David A. Thomas, an expert on minority mentoring. Whites frequently get more attention from their managers and hence more opportunities. If we fail in our organizations to see beyond employees’ gender, skin color or religious beliefs, we may overlook our brightest talent.

Effective organizational change begins with a plan

Without a roadmap, the savviest travelers occasionally get lost. To effectively compete in today’s global marketplace, a company must develop a strong vision and a stronger plan. Top management must convey a shared sense of urgency, because any critical initiative can go astray with the competition all organizations face in today’s global market. To solve the coming talent crunch, organizations must commit the resources to tackle this problem strategically, while there is still time.