Your Greatest Business Threat

Pretty much every business in the world does some sort of occasional “threat assessment” to determine areas of their business where they could be vulnerable. Most of these assessments are externally focused and while that is obviously important they miss the single greatest threat to their future. It’s a threat so severe that in many cases it threatens the very existence of their business.

The threat they miss comes from the rapidly changing demographics of the workforce. 

Roughly 10,000 Baby Boomers reach retirement age every single day. The majority of them retire either a little bit before the age of 65 or a little after. 25% of boomers say they will need to work well past retirement age but many of those say they will significantly scale back their work hours. 

If we assume the age of 65 as the average retirement age then 10,000 Baby Boomers are leaving the workforce everyday. Every single day.

They are replaced by far far fewer Millennials. 

That’s the textbook definition of a problem. A very serious problem. 

In the trucking industry alone, for example, it’s estimated that there will be a shortage of over 100,000 drivers in just the next couple of years. The Millennials who replace boomers will have far less experience and know-how, and will need considerable training to get up-to-speed. This will lead to significant gaps in areas such as engineering, utilities, manufacturing, education, healthcare, and many many more professions. The majority of the less desirable manual labor jobs, even skilled positions like mechanics and service technicians will become increasing challenging, if not impossible, to fill. 

Just as important for leaders is the need for awareness as to just how differently Millennials will behave. Millennials significantly differ from Boomers in a number of ways: They want, actually need, more feedback and attention, and prefer the instant gratification of texting to the slower response of email; they prefer casual attire so they can just be themselves at work; they want tons more flexibility with scheduling and work location; they value the importance of their work over pay and benefits; and they want to be involved in strategy and not just told what to do. (It’s important to keep in mind when discussing generational differences that we’re discussing “generalities,” it’s just as unfair to “pigeonhole” the Millennial generation as any other)

None of this makes Millennials harder to work with or more challenging to lead, it just means a shift in leadership thinking. 

The differences however won’t matter one bit if you’re not proactively planning for the demographic change in your workforce. You won’t need to worry about how to lead a Millennial because you’ll be so far behind the curve that they would never join your organization in the first place.

The threat posed by the changing demographics is so severe that your next threat assessment (or whatever you want to call it) needs to be focused almost exclusively on the internal workings of your organization. Conduct a demographic risk-analysis of your team. What knowledge and skills are likely to leave your organization in the next five years and how will you replace it. 

To be clear, this is not your yearly process for assessing talent and creating succession plans, this is an almost person by person detailed assessment of strength areas that lead to the eventual determination of whether or not those strengths will be required in the future. 

If it’s determined that they will and those strengths are held by a Boomer then you have identified a threat.

If you intend to be in business 15 or 20 or perhaps even 10 years from now, you must develop a sense of urgency around this threat today. There are only so many people to fill the positions you need filled to sustain your business, you are right now, this very day, in competition for an ever shrinking talent pool. It makes no difference if your business is big or small, everybody is in the same boat.

If you’re alarmed at the tone of this post then that’s great, you have received my message in the manner in which I intended. 

I fully understand the difference between a real threat and an irrational apocalyptic kind of threat. This threat is the real kind, VERY very real; the numbers just don’t lie. If you disagree then I wish you luck cause you’re going to need it.

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