Many executives are aware of the coming "gray drain," the study by the accounting firm Ernst & Young said. But not enough of them have taken steps to head off skill shortages and turnover that could hurt the bottom line, the report said.
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The U.S. Bureau of Labor Statistics predicts 43 percent of the U.S. labor force will become eligible to retire before 2012.
The skills and institutional knowledge lost when older workers retire won't be easily replaced, Arnone said. Management shortages already are appearing in some sectors that have experienced a number of early retirements, including utilities and hospital nursing staffs, he added.
"More enlightened employers are going to get ahead of the curve," Arnone said, and companies able to differentiate themselves as "older worker friendly" will be poised to reap dividends. Those that don't face the prospect of "serious financial and productivity issues," as managers scramble to plug holes when experienced employees retire, he said.
Of human resource managers at Fortune 1000 companies that Ernst & Young surveyed, 43 percent said they needed to do more to train and develop their managers.
A lack of succession planning will hit middle management particularly hard, according to the report.
Arnone and his colleagues urge companies to identify managers eligible to retire in coming years, decide who should replace them and begin training those individuals.
Work-obsessed Boomers have complicated the transition planning, said Peter Rose, a partner with marketing research company Yankelovich Inc. in Los Angeles.
Because the post-war generation "has defined work as a way to be a winner in the game of life," he said, Boomers have been hesitant to hand over the reins, forcing many organizations to keep younger workers on the sidelines.
"That comes at the expense of building up your bench strength," he said.
Rose said companies can turn the reluctance of some older workers to retire completely into an advantage, offering valued managers part-time or flexible schedules as an incentive to stay on the job to help train their successors. These kind of arrangements can create opportunities to mentor younger workers, he said.
Molly Selvin is a staff reporter for the Los Angeles Times, a Tribune Co. newspaper.