Time to Push the Alarm? The Braindrain Threat from Boomer Engineer Retirement

This series of posts covers a number of issues related to the differences in generations specifically in engineering organizations. Today’s post addresses the traditional line of thinking about the impending wave of Boomer retirement and the problem with the associated brain-drain on engineering organizations. However, according to some industry experts, the scenario may not play out the way everyone has been predicting.

It’s been the elephant in the room, right? It’s the issue everyone has basically conceded but no one quite knows exactly what to do about it. I’m talking about the fact that the Boomer generation of engineers are approaching retirement age and, if there is a mass exodus, the resulting knowledge loss at an organization level that could nearly cripple product development in many manufacturers. How did we get here? Let me give you a little background.

Remember in the last post in this series how the age distribution curve in an engineering organization resembles a saddle? There are lots of Boomers, much fewer Gen X’ers and a moderate amount of Gen Y’ers. If there were an even distribution, then retirement of an entire generation would take away about a third of your staff. However, the saddle shape of the age employment curve means that many engineering organizations are heavily front loaded with Boomer engineers. That’s far more than a third. Furthermore, the far smaller group of Gen X engineers means that there’s not a one-to-one tenured replacement for every retiring Boomer. The ratio is probably closer to one-to-two instead. Further exacerbating the problem is the shortfall of STEM graduates that engineering organizations can recruit and hire. All of this combines into a perfect storm of organizational knowledge loss and decision making experience. Overall, the situation leaves many an engineering executive wringing their hands in concern. Without the right people, you make more mistakes in development, the products are less compelling and product costs tend to be higher. That, in turn, equates to profit loss.

Don’t hit the alarm button quite yet though. Some recent studies have found that the Great Recession have adversely affected the financial positions for the Boomer generation. As a result, many are delaying some of those retirement plans. Here’s an excerpt from the USNews article ‘Most Baby Boomers Plan to Delay Retirement’ that cites a recent PEW research study.

American workers are increasingly planning to delay retirement. Among employed adults ages 50 to 61, 60 percent say they may have to delay their retirement because of the recession, according to a Pew Research Center telephone survey of 2,967 adults released today. And 35 percent of those age 62 and older say they’ve already pushed back their retirement date.

But the motivation might not all be financially oriented. In fact, some of the reluctance comes from the psyche makeup of the Boomer generation. Tammy Erickson, who has conducted research study after research study on generational traits and characteristics,  admitted the traditional thinking about Baby Boomers may be off in a recent post to the Harvard Business Review blog. Here’s the most relevant excerpt.

I spoke with a company recently that had offered a “deceleration” option to older employees – with no takers. Hmm . . .

I’ve argued for several years now that one of the keys to retaining Boomers post-“retirement” age is to create career paths that allow people to step back, to do less. Very few of the people I’ve interviewed say they want to work as hard at age 80 as they are at age 50 – but a lot of people say they enjoy their colleagues and their work, and would enjoy staying on longer if options to slow down a bit were available.

That’s what they say.

But confronted with the reality of stepping out of prestigious senior positions, hard-won over decades of competition with high-intensity peers, no one in this firm was making the move. Remember, as I’ve also argued, Boomers are notoriously competitive – reared in a world that was fundamentally too small for their bulging generation.

But the smart leaders had a new idea – a judo-like move: to turn the very characteristic that was standing in the way into a driver for success of the new program. They made participation a contest.

Now, candidates in this firm need to compete for a limited number of slots on the deceleration path. Those selected have, once again, won – in this case, won the right to slow down.

They found a way to make winding down into a competitive, Boomer-friendly activity

I found this judo move applicable to the terribly threatening situation of knowledge loss and decision experience gap for the engineering organization. Could there be similar programs tailored for Baby Boomer engineers, because eventually they will retire even if it is delayed, that could not only soften the retirement blow over time? There’s a lot of activity around recruitment and promotion of STEM fields at the front end of engineering careers. I’d suggest that there’s some new creative ways to work with Baby Boomer engineers at the back end of their careers that would be advantageous to both the organization and the individual.

What are your thoughts?

Take care. Talk soon. And thanks for reading.

Is the Relationship between Engineers and Their Companies Degrading?

A couple weeks ago, a friend of mine told me a story that I thought was pretty indicative of the plight of the engineer. I want to share it here as I think it underlines a pretty important point.

My friend was finishing up his week of work in the middle of a Friday afternoon when he got the call. You know. One of those calls. There’s a project in dire straits. They needed him to whip up a procedure for this particular product. He asked if it could wait until Monday because it was a lot of work. More than just two or three hours of work. Nope, they said they needed it by end of day. They were going to pass the procedure along to one of their technical centers overseas so they could actually utilize it over the weekend. No waiting until Monday. So, he desperately got to work, iterating on the test procedure until it was complete. He sent what he whipped up to the technical center overseas and left the office late that night. Actually, he left the office about 1AM Saturday morning.

But the story doesn’t end there. By the time I had talked to him, the overseas technical center had used the procedure…and it worked. So in this moment of success, how did he react? Was he elated? Was he proud? Sure. But he was more concerned with the expectations he had just set in his moment of triumph. Managers would expect him to be able to do this on a common basis. Another engineer friend, after relating this story to him, just laughed. He said he just doesn’t answer his phone after noon on Fridays.

Overall, its great the project progressed and met success. But the comments by both of these engineers reveal a larger issue. Somewhere along the way, there’s been a breach of trust in the relationship between the engineer and the company. That doesn’t make good for alignment within an organization. And it doesn’t bode well for retention.

What do you think? Sound off. Is the relationship between engineers and their companies getting worse?

Take care. Talk soon. And thanks for reading.

Is the Age Profile of Engineering a Saddle?

This series of posts covers a number of issues related to the differences in generations specifically in engineering organizations. Today’s post covers how the age profile of a typical engineering organization resembles a saddle. Resulting implications are discussed.

In the last post in this series, I wrote about how the face of a modern engineering organization is not age-homogeneous, but instead is multi-generational. But in reality, it’s actually far more complicated than that. I first got a hint at that complexity when I listened to presentation from Raytheon (wikipedia entry), an aerospace & defense manufacturer, at the 2010 PTC/User World Event in Orlando Florida. Mainly their presentation focused on their PLM deployment, but there was an undercurrent to generational issues in engineering. Specifically, he referred to it time and again as managing the saddle. Let me explain.

Imagine if we mapped the number of engineers (y-axis) against their age (x-axis) for a particular engineering organization. What would the distribution curve look like? Well based on historical hiring demand and the relative sizes of different generations, we can project what it would look like. In the ’70s and ’80s, there was a glut of hiring from the Baby Boomer generation. So it starts with a peak. Then in the ’90s and early ’00s, with Gen X being smaller and less drawn to engineering careers, hiring in engineering organizations tailed off. Fast forward to late ’00s and now, there’s an upswing in hiring engineers out of Gen Y. So overall, our engineering age distribution curve started high, sloped down into a valley and has come back up. It resembles a saddle.

What’s the problem? It might be easy to theorize some potential issues. But last week, I had a chance to talk with Howard Schimmoller (LinkedIn profile), a 20+ year veteran engineering project and program manager formerly with Lockheed Martin, and get his perspective on the issue. We talked about this in the midst of a longer yet-to-be-posted podcast, but here’s the excerpt on what he calls the generational trough he saw at Lockheed Martin.

Howard’s point, for those of you that don’t have time to listen, is that from a succession perspective, you have to go back a generation and a half to find suitable replacements. This is particularly troubling given the impending threat of baby boomer engineer retirement. Not only would many engineering organizations find much of their knowledge walking out the door but that there’s an absence in the number of senior tenured engineering staff to pick up the slack. In a highly technical field like engineering in industries where design decisions can make or break a company, that’s just plain scary.

In the next post in this series, we’ll talk about these baby boomer engineers. Many industries are scared at what will happen when they retire. But interestingly, some studies are showing they might not exactly be ready to exit stage left quite yet.

Take care. Talk soon. And thanks for reading.

The End of Engineering’s ‘Black Box’ Operations?

This series of posts covers the relationship between the engineering executive and the c-suite executives in a manufacturer. This post looks as the increasing need in the c-suite’s visibility into engineering operations.. This background will be the basis for future discussions and posts on this set of relationships.

If you had to guess, do you think that the c-suite executives in your company view the process of engineering a product more of an art or more of a science? Based on my experience, even though engineering is heavily based in science, their answer might surprise you a bit. Before I give you my perspective on that initial question, let me preface it with a fictitious conversation that represents the general tone of the conversation between engineering and the c-suite that I’ve heard before. In this case, a c-suite executive’s bumped into an engineer and wants to know status of a development project.

Kevin the CEO: Oh…hey…Bob. Glad I ran into you. I wanted to talk to you about your project. What’s going on with that one issue?

Bob the Engineer: Well…there’s a problem with compatibility between the… *trails off*

*awkward silence follows as Bob the Engineer tries and fails to find a subtle way to say the executive isn’t smart enough to understand*

Bob the Engineer: …well…it’s complicated.

Kevin the CEO: I’ll catch up with your manager and get an update from them.

*Kevin the CEO walks away with a frown*

OK, so maybe I’ve embellished this story a little bit. But my primary point, based on my experience, is still valid. It’s that the issues around designing and engineering a product have been so complex, it has been difficult to relate them to other stakeholders in the development process, including those in the c-suite. When pressed on a busy schedule, the underlying tone from engineering to the rest of the organization often became it’s too complicated, you wouldn’t understand. That’s why other stakeholders have traditionally seen design and engineering activities as far more of an art and than science. To them, engineering has been like a black box. Market needs and requirements went in the front. Something magical and unknown happened in the middle. Product designs popped out the back. And for the most part, engineering was left alone.

But times are changing. In the last post on the relationship between the c-suite and the engineering executive, I wrote about the imperative the c-suite is placing on new product development to drive profitable growth in the economic recession. Because engineering is so core that that strategy, c-suite executives want to know what’s going on in the latest development projects. They aren’t content with the what we do engineering is really complicated, you wouldn’t understand answer. In other functional areas of the organization such as production, sourcing and others, there have been a variety of recent initiatives to gain visibility into operations for the sake of business continuity. For engineering,  this sort of requirement may seem yet another burden on top of everything else. However, it may not be such a bad thing. From a c-suite executive perspective, if engineering is such a black box and can operate in a relatively detached manner, they might ask themselves a scary question: why not outsource the entire engineering group? Insight into how complex engineering really is and getting them to personally invest in product development changes the tone of that conversation dramatically.

So far, we’ve outlined an important issue about providing visibility into engineering for the c-suite. How do you go about delivering it? Ultimately, the objective here is to make engineering a more transparent box instead of a black box. There’s lots of things that can be done there like defining the development process, identifying key metrics to track and measure and potentially investing in Business Analytics (wikipedia entry) and reporting for c-suites executives. But these are longer discussions deserving of their own future posts.

In the next few posts, we’ll start to talk about some of those approaches, but also, we’ll hear from some executives on how they manage their relationships with the leadership of their company.

Take care. Talk soon. And thanks for reading.