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Retiring Baby Boomers Spur IBM Service

IBM is offering consulting services to help companies manage workforce transition.

American utilities employ some 400,000 linemen, with half of them slated to retire by 2010. About half of the nation's 20,000 air-traffic controllers, many hired as replacements in 1981 after President Reagan fired striking controllers, will leave in the next five years.

Millions of other baby boomers--including nurses, aerospace engineers, miners, bankers, and government workers--plan to retire by the end of the decade. It's becoming a crucial problem for many American employers, and IBM Global Services says it can help.

IBM on Wednesday introduced consulting services to help companies prepare for the loss of highly skilled and knowledgeable baby boomers set to retire in the next few years. The services, offered through IBM Business Consulting Services, will furnish companies with diagnostic tools based on advanced analytics, strategies, and methodologies to help them understand their employee base in real time, retain employees, transition knowledge from retirees to younger workers, and transform business processes to handle the demographic change and significant loss of skills.

With the median age of the American worker around 40, looming retirements are a critical problem for many employers. Within 10 years, the number of American workers over age 55 will double. IBM says organizations risk losing major skill sets and their competitive advantage as key workers retire. Exacerbating the problem, many organizations don't have a clear view of which skills they may be about to lose through retirement. "It's no longer a zero-cost option," says Edward Vitalos, an associate partner in IBM Business Consulting Services' human-capital-management group.

Vitalos says the new services are a natural extension of IBM's tech-enabled consulting services. Three consultants will work with each client for about one month. IBM initially is targeting organizations with 10,000 or fewer employees. Initially, each client will provide IBM with a flat file containing 30 fields with information about their current workforces. Consultants will interview key managers and personnel, hold focus groups, and conduct online employee surveys.

IBM will use that data to assess employee skill sets vital to the organization, as well as the risk of their loss through retirements. IBM will use the findings to develop mitigation strategies and plans to manage the impact of age-driven change, as well as to build the business case for action. Among tools IBM will utilize: maturing workforce diagnostics, component business modeling, learning alignment and learning effectiveness measurement, performance measurement analytics, talent management, and succession and workforce evolution modeling.

Such an assessment will disclose that not all retiring employees are created equal. For instance, replacement linemen need lots of training, on average 3-1/2 years. Vitalos maintains that the new IBM services will give utilities time to create a program to replace hundreds of thousands of retirees. "They're well within the window to do something," he says.

IBM is targeting its services at government agencies, too. The methodologies for the new services came from work it performed with an agency within the Department of Homeland Security. Because of layoffs and hiring freezes in the late 1980s and early 1990s, the federal government has a dearth of employees younger than 45 who could easily move up to replace retiring government workers.

To help develop replacements for retirees, IBM will tailor products designed to aid the disabled to meet the needs of some baby boomers who have yet to retire. Baby boomers who are working longer and retiring later suffer from similar problems as the disabled in using technology later in life. These tools, IBM says, allow older workers with vision, cognitive, or dexterity limitations to continue to use computer technology and remain productive beyond retirement age.

With such massive retirements expected in the coming years, the future of the American workforce will radically change, and alter the way companies manage work and knowledge.

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