As the pressure to operate leanly increases, companies continually look for ways to save money. Sometimes that means cutting back on the size of their workforces.
A perfect example is Verizon, who recently announced an early retirement program — the most generous of its kind in more than a decade — which will cut its workforce down nearly 43K people from where it was back in 2012. This example is aiming for a $10 billion cost-cutting effort.
The problem is that when companies cut down on the size of their workforce, they lose a hugely important asset: the institutional knowledge, skills, and expertise that those employees had developed over the course of their careers. Indeed, as experienced managers leave their roles, companies are left with giant skills gaps and challenges with transferring knowledge.
To solve for this, businesses like Verizon who have just significantly downsized their workforce need to diversify their portfolios of talent. More specifically, they need to integrate disparate talent pools and dynamically build hybrid teams made up not only of their full-time employees, independent experts, and boutique consulting firms, but also their freshly retired alumni, who have already worked for the company and have a strong understanding of the ins and outs of the business.
But Why Retirees?
You might be thinking, retirees don’t want to work! They want to enjoy retirement. But, actually, research shows it’s quite the opposite.
According to an Employee Benefit Research Institute survey, 40% of American workers do not feel confident about the amount of money they have saved for retirement. As a result, many retirees are choosing not to fully retire, as CNBC points out.
Indeed, many retirees want to work part-time or on a contract basis independently, either due to anxiety about not having saved enough money for retirement or because they want to stay active. In fact, AARP notes that many retired professionals report that employment provides them personal fulfillment.
This is especially true for people who were not quite ready to retire, but were, instead, forced into early retirement or enticed by a generous severance package. When companies leverage their network of retirees for work, they are simultaneously giving this expert community opportunities to stay engaged and demonstrate their institutional skills and expertise.
The Many Benefits of Leveraging Retirees
Companies like Verizon are primed to take advantage of this extensive network of talent with the exact skills and expertise their company needs to drive business growth and continue to succeed.
Beyond giving former employees an opportunity to work, there are tons of reasons that companies should leverage this network. First of all, companies that utilize retiree networks for contingent or contract work avoid losing time and money to recruiting, onboarding, and retaining full-time employees to fill skills gaps.
Secondly, leveraging a network of alumni allows companies to access skills and expertise with individuals who already have the cumulative knowledge needed to get work done faster. Alumni and retirees can tackle complex, important work that requires specialized skills, whether it’s by maintaining complex legacy machinery, products, or IT systems or completing backlogged strategic work that requires deep institutional knowledge.
Finally, as previously vetted, well-known entities, retirees are often the best option for handling work that’s particularly sensitive or includes privileged information.
Lean Work, Lean Workforce
Business leaders are always on the lookout for cost-effective solutions to skills gaps, issues with knowledge transfer, and growing backlogs of works. By diversifying their talent portfolios, managers can fill in where there are gaps in skills and knowledge with the best people for the job, which allows them to expand and contract with the fluctuating needs of the business.
Companies can avoid lost productivity and missed opportunities by nimbly slotting in high-quality flexible talent, whether it’s internal employees or recently retired employees who know the intricacies of the business. Maximizing the value of spend on both internal and external talent allows businesses to operate more leanly.
This can be the first step to take towards a larger agile transformation, wherein they reduce bureaucracy by breaking through organizational silos with small cross-functional teams. With this kind of agile operating model, companies can rapidly adapt to evolving market demands, drive better top line and bottom line results, and get work done faster.
As businesses find ways to save on costs, whether through downsizing their workforce or by other means, innovation becomes even more critical. Companies like Verizon are primed to leverage their external network of alumni and retirees who have the exact skills and knowledge they need to continue growing and beat their competition.
The companies that do will reap the benefits, all while offering great opportunities for people who still want to engage with the world by working. Sounds like a win-win.
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