Aging Workforce, Succession Planning: Dual Fears CEOs Need to Scratch Off Their List

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Who will carry your organization when the current generation of leaders ages out of the workforce? Or what if you can't attract the skills and know-how you need to move forward?

Developing a new generation of workers well equipped to remake the business amidst emerging challenges is a leading fear of CEOs, Becker's Hospital Review reported last year.

The data comes from a survey of 555 CEOs conducted by Conference Board, a global business membership and research association. This human capital challenge, they explain, will require renewed investment and training strategies to develop leaders - both new and existing employees - to counter the labor gap that's already felt in our industry.

It’s a very real challenge: By 2030, 10,000 people per day will reach the average retirement age of 65, says the Pew Research Center. Don’t think you have until then to feel the pain of a dwindling workforce, though. The labor and skills gap is already hurting healthcare facilities today. Astute leaders feel that urgency and are scrambling to figure out how to replace Baby Boomers as they take their skills and knowledge with them.

And yet, we still find a tremendous lack of formal succession planning for trades in our industry, which means healthcare facilities are increasingly more dependent on external service contracts to plug the skills they lack in-house. While outsourcing services can be ideal in some situations, it often comes at a price tag that’s many times what would cost you to develop the same capabilities in-house.

As it happens, out-of-control service contract costs are a common symptom when hospitals fail to see skilled trade areas as part of their workforce. This is particularly true in facilities management functions, including emergency management, environment of care, safety and compliance.

In working with hundreds of healthcare leaders, we’ve witnessed just what that survey uncovered: leaders losing sleep over attracting, retaining, and growing leaders - particularly those with highly technical skills - who can steer the organization for years to come. To that end, we’ve helped those facilities grow increasingly independent from external service contracts, instead putting the right strategies in place to ensure highly technical work can be completed in-house by training the next-generation workforce (e.g., Millennials).

As we examine our data at Medxcel, we find we’ve placed nearly 1,900 associates in 141 hospitals. The average age of industry workers is 41, according to the Department of Labor statistics. The average age of our workforce at Medxcel is 51, so we very much feel the pain of healthcare leaders, and a heightened sense of urgency in developing the next generation.

The Baby Boomer generation has decades of valuable knowledge and skills - both in terms of their craft and institutional knowledge. A successful succession plan needs to ensure effective recruiting and training of new hires, of course, but it can’t stop there. It must also (a) ensure successful knowledge transfer from aging workers to new ones; (b) communicate effectively across generations; (c) include employee engagement and recognition strategies so workers will stick around for the long run, and not jump ship to another employer.

If your succession strategy is missing any of these components (or if these components are not fully integrated), don’t wait until the labor gap grows wider. Someone is going to attract and keep those workers. Will it be your organization, or your competitors?

Matt Keahey is vice president of operations at Medxcel.

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