The trend and reality of the aging workforce have been with us for quite some time. The pandemic certainly did not help and likely worsened the problem. While companies typically plan ahead, some can find themselves in a difficult spot, with last-minute planning to solve for the void once a team member retires. In private family companies, the expectation is that the next generation in the business will take over. Many companies have not confronted the “upcoming void.” Well, ‘quiet’ is the workplace word of 2023. More on this later.
Let’s talk about attacking and confronting the “upcoming void” of the aging workforce.
Here I’ll share how Withum has served its clients in addressing this business problem:
- For private family-run companies, it is coming to “next generation up.” Are they ready, and do they share their parents’/grandparents' aspirations to continue? Certainly, skills are going to vary for the succession. Have you intentionally thought about and discussed Succession Planning? When we host workshops/sessions with the upcoming generation, wow, there is so much forthcoming information we learn that has not been shared with their parents/grandparents/siblings. We assess the organization overall and conclude who can best support a defined organization role. Then we need to consider updates to operating and compensation agreements and income/estate tax plans to name a few key tasks. There is much more to the transition, which deserves a conversation or two.
- A sobering outcome of succession planning is that the children, the “next generation up,” prefer not to follow in the footsteps of those before them. Okay, so now what? Well, we can move into either finding a suitor to combine forces or consider a sale if our founders are done with the business. If they are not done, see the below points of consideration. No matter the path, Withum can support and provide their expertise.
- If the decision is to stay, not combine with another company and operate with your existing employees, we’ll need to analyze and digest which team member is best suited for which role, focusing on strengths and removing distractions. Typically, we’ll still be left with the opportunity to improve talent. We suggest establishing a mentor and education program and a specific recruiting plan. Typically, this requires a significant update to documentation as this is never a priority at companies. Benefits from our assistance have been connected with “Rethinking How Work Gets Done” in today’s digital workplace. Some examples to pay attention to that help rethink how work gets done are productivity and collaboration tools, information sharing, business software for sales, marketing, procurement, and accounting software. Implementing or upgrading these technologies propel your organization towards modernization improvements that will positively impact efficiencies. Our clients gain access to Withum’s education series and can also establish formal training classes with us. You can also formalize a support plan/help desk operation with us. If the ultimate end path is a sale, we’ve buttoned up and positioned the company to be more attractive overall.
- Sometimes, the talent analysis reveals there are more holes than we like. You have tried recruiting and still encounter vacancy rates with long durations. You decided merging or selling is not in the plan. So now what? Well, you could communicate with customers and reset expectations about delivery or not being able to serve them at all and drive them to competitors. No owner and business leader wants that to happen. We know there is talent out there amongst other companies, but it's a competitive world. Employees today have higher expectations and great demands as to how they want to work (remote/hybrid). In this case, it may be time to consider third-party consulting services to help fill that talent void versus waiting for an uncertain amount of time and possibly letting your customer base down. These third-party consulting companies are often larger firms with an established reputation, sophistication, structure, discipline, and empowering programs, earning them the right to be a trusted advisor.
Earlier, I mentioned “quiet” is the workplace word for 2023, and it is time to introduce you to an article with said title published by Madison Hoff on Feb. 25, 2023, and released thru Insider.
The article covers “quiet quitting,” “quiet hiring,” and “quiet firing,” each marking a trend in how workers and employers are continuing to adapt to changes in how to work in the last three years after the start of the pandemic. These trends certainly impact how we solve for the void from the aging workforce.
I am part of the aging workforce and personally have instituted actions here at Withum along with other leaders to ready our “next generation up.”
Joseph R. Riccie, CPA, Partner Withum
Withum’s Management Consulting Services Team is constantly working with owners/leaders/managers of companies to solve management challenges and can share more examples and ideas.
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