Analyze this: Big Blue advises on pending brain drain

Forecasters say a big chill is looming over the labor market, and the company has a new service to help customers cope with the inevitable loss of all those baby boomers.

IBM said today it will begin selling consulting services that help companies analyze which baby-boom retirements will hurt most and devise strategies for dealing with the potential loss of expertise. "This is an iceberg issue -- there are little pieces of it peeping out, but companies need to understand the challenges and opportunities before it turns into a crisis," said Edward Vitalos, associate partner in the Human Capital Management Practice of IBM Business Consulting Services.

The new service is more automated and contracted than other Big Blue consulting packages, Vitalos said, taking about four weeks for the initial engagement, costing about $100,000 and aimed at organizations or departments of large companies with about 5,000 employees. Using business intelligence tools from IBM and Cognos, a partner in the venture, the assessment begins by extracting information about job categories from a client's human resource system. The client identifies which positions are critical to its business goals. IBM analyzes the company's potential attrition over a five-year period, breaking out "mission-critical" jobs from the "mission-support" jobs to determine the impact on the business.

Companies address future skill shortages using what IBM calls mitigation, transformation and outsourcing strategies. Mitigating the loss of expertise might entail lifting a current hiring freeze, improving compensation packages to keep key people, and prolonging the careers of retirees by putting them in mentoring or consulting roles to ensure that business knowledge is passed on. Transformation is defined as "anything short of outsourcing," Vitalos said, and might involve using service-oriented applications or other technical improvements to cut costs. Finally, the boomer retirements will almost certainly usher in more outsourcing, according to IBM, as companies elect "to dedicate their full energies to staffing the mission-critical positions" while farming out the support staff work, Vitalos said.

Forrester Research Inc. analyst Claire Schooley, who writes about changing workplace demographics, applauded IBM for "stepping up to the plate" on what is without question a huge issue. Industries, like the gas and electric business, where it takes years of training to get people up to speed, have long been aware of the coming skills shortage, Schooley said, but she finds that many people, including baby-boomer CEOs staring down their own retirements, "haven't even looked at it because it doesn't have a single date attached to it." Sectors such as education and government, where people tend to stay, will be hit hard. Even high-tech companies that are happy with their talented young employees' technical skills need to worry developing managerial skills, as baby boomers make their exit.

"If nothing else, IBM is raising awareness of this coming shift in the workplace. And they're doing it in a thoughtful way. It's not something where they saw an opportunity to make money and said let's throw something together. They have spent months thinking this through," Schooley said.

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