Tide of retirements

Companies brace for the exodus of baby boomers – and their tribal knowledge

Posted on Jul 14, 2017 :: Cover Story
Posted by , Insight on Manufacturing Staff Writer

When workers retire from Lindquist Machine Corp., some of whom have served the company for decades, they don’t only take with them their skills. When those employees walk out the door, their tribal knowledge also leaves with them.

Those insights, gleaned from years of experience and trial and error, are irreplaceable. It’s natural, then, that the prospect of losing that knowledge makes Mark Kaiser, president and CEO of Lindquist, anxious.

“This is a very serious situation for us and it is as well for a lot of manufacturers,” Kaiser says of the spate of retirements expected in the coming years.

Kaiser looked at his workforce and saw some people who had been with the company for 20 to 30 years. Anticipating difficulties that would come with a flurry of retirements in the coming years, the company implemented associate development plans as well as a matrix of all employees, including information like expected retirement times.

These measures help track employees’ skills and knowledge and give the company a tool for preparing for those retirements. Leaders in the company work to ensure that seasoned employees share their tribal knowledge with at least one other person and try to document it as best as possible.

Companies like Lindquist that have taken steps to plan for the coming tide of retirements are the exception, according to the Northeast Wisconsin Manufacturing Alliance 2017 Retired Worker Survey.

Ann Franz, director of NEWMA, said the organization decided to conduct the survey after years of listening to companies discuss the upcoming wave of retirements. She wanted to assess the level of concern among companies.

For many companies, she says, taking the survey proved an eye-opening, and perhaps disquieting, experience. She often heard sentiments like, “We knew we had some older people, but my gosh when we really look at this, this is going to be a huge issue.”

Indeed, according to the University of Wisconsin-Madison study “Wisconsin’s Future Population,” while the state’s overall population is projected to grow by 14 percent by 2040, much of that is concentrated in older age groups. Projections for 2040 growth show a 90 percent increase for those in the 65 to 84 age range, while younger groups hover in the low single digits. For 45- to 64-year-olds, the study projects a decrease of 3.6 percent.

Overwhelming concern

The NEWMA survey, completed by 55 companies employing more than 30,000 people, showed that 85 percent of those surveyed were concerned about the issue, but just 35 percent were addressing it. Furthermore, even companies that had taken steps didn’t feel like they were doing enough, and only 10 percent had significant strategies in place.

“It was clear that there are definitely issues here,” Franz says. “When 85 percent are concerned, that’s huge.”

The survey identified occupations with the largest percentage of employees 56 or older, including maintenance mechanics and millwrights, electricians, service technicians, machinists and electro-mechanical technicians. The problem also touches many types of engineering.

“It just reinforced the importance even more so of getting people interested in those degrees,” Franz says.

For Amanda Kopetsky, human resources director-operations and finance for Bemis Co. and a member of the NEWMA Retired Worker Task Force, the survey results confirmed what she had already suspected.

“Largely, it really validated what my gut told me was true,” she says. “It’s really going to become a big issue for our region.”

As soon as she learned of NEWMA’s efforts, Kopetsky knew she wanted to get involved. Her company had recently started delving into the demographics of its workforce and begun to discuss steps it needed to take as an organization.

In the coming years at Bemis, Kopetsky anticipates the greatest gaps in manufacturing positions such as maintenance technicians, skilled machine operators and shift supervisors.

“We have a lot of tenure in that space,” she says, adding that the company is looking at how to attract people into these roles.

Kopetsky says Bemis is lucky in that unlike many surveyed, the company doesn’t face large gaps in engineering roles. However, she says the task force is a collaborative effort to create solutions and resources for companies.

“There are a lot of small companies that just don’t have the resources we have,” she says.
Looking to the classroom

Survey results in hand, the task force turns its efforts to creating resources for companies to use and encouraging them to share their knowledge and strategies.

“The next focus that we’ll be starting to research is to look at some best practices,” says Sonia Otte, human resources consultant at Sargento Foods and a member of the task force.

The task force plans to research best practices throughout the state and nation and create templates and provide research materials for companies to use. An important piece of the work includes promoting manufacturing careers, Otte says.

“I think we really need to educate our employers, educators, parents and students in the area,” she says.

Jim Golembeski, executive director of the Bay Area Workforce Development Board, says for decades, business and education engaged in little dialog. Companies didn’t need to worry about that because they relied on the work of baby boomers.

“Now, because of the baby boomers exiting and smaller cohorts entering the workforce, businesses are very interested.”

Golembeski says it’s vital to align education with the region’s economic needs. The economic environment has changed dramatically in the last 15 years, he says, and educational institutions have responded admirably.

“Big things like educational institutions take a long time to change, but we’re seeing them change very, very quickly,” he says. “Our educational systems … are becoming very adaptable.”

He points to the technical college system as an example. In 2005, the four technical colleges in the New North churned out just 193 welding students, and 10 years later that number had increased to 830, he says. Franz also praises the University of Wisconsin-Oshkosh and the University of Wisconsin-Green Bay for responding to the need for engineers and creating engineering technology programs.

“College leadership and industry were spot-on in identifying needs,” she says. “Engineering shortages should not be as pronounced because of these efforts.”

Franz also wants people to see the career pathways available to them. For example, she says, someone can start with a one-year degree in industrial maintenance, which can lead to an associate degree in electro-mechanical technology and then to a bachelor’s in engineering. All those credits transfer, she says, and people can keep college debt lower and know they won’t stay stuck in one career.

The alliance plans to continue to spotlight manufacturing careers by promoting manufacturing jobs as high-paying and high-demand. Many companies, Franz says, offer great benefits.

Furthermore, the average tenure of production employees in Northeast Wisconsin is 11 years, significantly higher than the national average of 4.2. For engineering, the average is 9.5 years in the region, compared to 5.5 nationally.

“The companies that were polled … their employees doubled the length of time of average manufacturing companies,” Franz says. “If you get a job in (the manufacturing sector), more than likely you’ll be in it for a long time.”

Solutions from within

In addressing retirements, companies can also look to their own ranks. Ariens Co. created a “sunset program” that transitions people about to retire to part-time work, Franz says.

Lindquist has pursued a similar strategy. Kaiser says the company tries to understand what employees are thinking when it comes to retirement. It also gauges prospective retirees’ interest in working part time and tries to coordinate hiring and training around anticipated retirements.

The company’s associate development plans, each populated with different skill sets, take years to complete and help Lindquist assess abilities. “It measures not that you were trained but that you can actually do the work,” Kaiser says.

Kaiser says he’s concerned about boomer retirements as well as Wisconsin’s demographics showing little growth. With plans in place, however, his company can anticipate and brace for issues that arise, he says.

As an HR director, Kopetsky of Bemis says losing the talent and tribal knowledge of the company’s workforce weighs on her. “This is the thing that keeps us up at night,” she says.

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Bemis is looking at alternative ways to retain that knowledge, Kopetsky says. The company also has developed rotational programs that bring in talent and get them trained on jobs quickly.

Like other organizations, Bemis has explored offering part-time work to retirees and bringing those employees back to work on projects. The company also works to train existing employees for higher positions such as shift supervisors. That, unfortunately, creates the need to backfill for the lower-level positions, Kopetsky says.

Members of the Retired Worker Task Force hope an answer lies in collaboration. Kopetsky says it invites people from across the manufacturing sector to put their heads together to solve the problem. The task force plans to hold a Retired Worker Symposium next March.

While taking the survey proved a sobering experience for some companies, Franz says it provided them a way to begin to understand the scope of the problem, and overcoming inertia is key. “For companies, I think they really need to develop a strategy and be proactive and not reactive.”