Academic journal article Research-Technology Management

Materials Research Takes Early Retirement

Academic journal article Research-Technology Management

Materials Research Takes Early Retirement

Article excerpt

The following hypothetical human resources issue has, like so many of its ilk, no "correct" solution. To help your colleagues deal with such a situation, please tell us how you would resolve it. We'll print as many as space permits. The Editor

"Pete Gettings," XYZ's personnel director was briefing "Tom Evers," R&D vice president, on the latest, alarming, retirement statistics he had read (1). "The essence is that American companies are facing a demographics-driven crisis. We're looking at 70-plus million 'baby boomers' who will be retiring in a few years. They will take their tacit knowledge and their personal information networks with them and there will simply not be enough skilled, experienced, well-trained workers to replace them. The end result will be a drain of 'deep smarts'--the experience-based store of knowledge that allows people to understand issues, put together patterns and come to correct conclusions."

Pete went on, "Economists project a labor shortage of 10 million by the end of this decade (2). American industry has been riding the baby-boomer generation and there is a big trough following that boom. Some industries--notably utilities, energy and education--are already struggling to stanch this brain drain.

"Tom, I've taken a detailed look at our age distribution and in a few years we are facing some major losses of our technical strength through retirement. We need to develop a way to hang on to our older workers as long as possible--they possess an intangible and perhaps undervalued commodity--wisdom. Replacing that wisdom with new young workers is probably not possible."

Tom asked Pete whether he had any specific suggestions about what they could do to avert such a loss of capabilities and knowledge.

"Well, Tom, I first need to do some quiet checking to see how many of our older employees are contemplating taking early retirement. Also, there's talk about retaining employees after retirement. I'll see if I can find out more about how companies make this work."

Roger Announces Early Retirement

A few days later, Pete was back to report some developments. "Tom, before I got to do much checking I was approached by 'Roger Preston' (manager of materials science research) and then by two of his senior department members. All three of them are anxious to keep working beyond our retirement age of 65. They've jointly decided to take early retirement from XYZ and form their own consulting firm. Their XYZ pension and retiree medical benefits will give them a financial cushion until they get their consulting business running. Optimistically, by retiring early they think they've got at least 10 good years to work until they really retire! If they stick with us they are out at our retirement age. Their early departure will have a crippling effect on our materials research efforts."

Tom gulped, "Several of the long-range new product efforts we have planned are vitally dependent on the support of their department--see what you can come up with to retain those three as long as possible! I doubt we can replace their expertise and knowledge with young, new talent."

Pete starting making telephone calls to see what other companies were doing about losses of key personnel through early retirement. He got several suggestions--ideas he had not thought of--and began to formulate a plan to take to Tom.

Pete told Tom subsequently, "I'm finding there is a new kind of career stage in American industry--maybe particularly in R&D--it's the 'not-quite-retirement.' We have been experiencing longer life spans and some tightening of pensions--jumping from full-time work to full-time leisure is today less realistic and, to some people, less desirable.

"One person steered me to a Merrill Lynch study (3). It concludes that a majority (70-80 percent) of workers 50 and older expect to continue working past the traditional retirement age. …

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