The ripple effect of baby boomer retirements.

• Author: Reichenberg, Neil E.

According to the Pew Research Center, approximately 10,000 Americans per day will turn 65 between 2011 and 2030. These baby boomers comprise 26 percent of the U.S.population. The Center for State and Local Government Excellence (SLGE) recently found that nearly 30 percent of state and local government employees have delayed retirement. Still, since no one has figured out how to delay aging, the number of retirements will increase. According to the SLGE 2014 Workforce Trends survey, 49 percent of the responding state and local governments reported higher levels of retirement in 2013 than in 2012.

The International Public Management Association for Human Resources (1PMA-HR) recently issued a report on talent management. Four out of 10 responding organizations indicated that they could lose 20 percent or more of their employees to retirement within the next five years. The Government Accountability Office predicted in January 2014 that the percentage of retirement-eligible federal employees will double to 31 percent in the next three years. The Bureau of Labor Statistics also reported statistics highlighting the relatively advanced age of public-sector employees (see Exhibit 1).

These demographics demonstrate a growing need for the public sector to focus on succession planning as part of an overall workforce planning effort. Despite the need for succession planning, only 27 percent of the respondents to the IPMA-HR talent management survey indicated that their organizations have plans in place. The top barriers to succession planning the survey respondents identified are management being more focused on day-to-day business, lack of sufficient time to make succession planning a priority, lack of resources, fears within the organization that succession planning will result in favoritism and pre-selection, and a lack of commitment from top leadership.

Exhibit I: Public-Sector Employees Skew Older Percentage of employees who are at least 50 years of age: * Federal government, 43% * State government, 38% * Local government, 37% * Private sector, 28% Percentage of employees who are younger than 30: * Federal government, 8% * State government, 15% * Local government, 12% * Private sector, 23% Among those who indicated that their organizations have succession plans in place, the key components included:

* Developing employees.

* Identifying key positions where retirements are likely to occur.

* Identifying high-potential employees.

* Projecting retirement eligibility.

* Identifying skill gaps.

* Establishing knowledge-transfer programs.

* Developing mentoring programs.

* Aligning the succession plan with the organization's business plan.

* Collecting performance feedback.

* Establishing job-shadowing programs.

Contrary to the trend reported in the survey, some governmental organizations make succession planning part of an overall strategic workforce planning effort rather than an isolated project. These efforts range from the employee development, which creates an internal pipeline of talent that is ready to move into positions as retirements and vacancies occur, to ensuring that knowledge transfer occurs when long-time employees leave the organization. There is no one-size-fits-all solution, and the balance of this article will highlight the efforts of several governmental organizations. (For further information on succession planning, see "Planning for Employee Turnover" in this issue of Government Finance Review.)

CITY OF GRAND FORKS, NORTH DAKOTA

The City of Grand Forks, North Dakota, has been addressing succession planning for several years. Of their 460 full-time employees, 42 were eligible to retire as of December 2013, with an additional 95 employees eligible from 2014 to 2020. The vast majority of them are in supervisory and department head positions.

The city's HR department developed a guide for department heads titled The Keys to Workforce Planning and Development. It outlines departmental roles and responsibilities; how to make the right planning decisions; how to prepare for planning, data collection and analysis; and how to develop workforce plans. The HR...