BOOM! Managing a “Retirement Tidal Wave”

ARTICLE | Jan 22, 2010

 

While stability among our senior staff has been a great asset for the city, it will be a disaster when we all retire in the next five to ten years.

 -ICMA Member

Succession will happen regardless of planning.

-Ben Marchant, City Administrator, City of Jerome, Idaho

For the price of one consultant study, we share a management fellow with a neighboring community for a whole year. Our fellow accomplishes much more than one study, and we are building capacity in our profession.

-Scot Simpson, City Manager, Lancaster, Wisconsin

HOUSTON, WE HAVE A PROBLEM!

A lot has been written lately about the impending retirement of the baby boomer generation and the impact that this potential “tidal wave” of departures will have on local government, in particular senior management. Federal and state statistics claim that as many as 80 percent of senior executives have begun their retirement eligibility. Demographic data for ICMA membership shows a similar trend: up to 50 percent of senior managers are approaching retirement eligibility.

 

But when will they retire? And when they do, will local governments have enough candidates ready in the wings to fill these empty shoes? And if they don’t step aside, how do we prepare tomorrow’s managers?

To quantify observations about retirement, succession planning, and the future of the local government management profession, ICMA recently surveyed its members who are employed by jurisdictions as chief administrative officers (CAOs), assistant CAOs, or department heads.

Below are some key findings that reinforce what ICMA and other management organizations have suggested in recent years.

 

1. Local governments have very experienced managers at the helm today.

  • 64% of respondents have been in local government for 20 years or longer
  • 48% of respondents have been in a management position for 20 years or longer

2. Starting at the bottom is how most managers entered the profession.

  • 85% launched their local government careers through a college internship/fellowship  or an entry-level position
  • 40% of career changers also launched their local government  careers through an internship/fellowship or entry-level position

3. Coaching and mentoring is a highly valued part of career planning for people early in their careers.

  • 98% of respondents agreed that people early in their careers benefit from establishing relationships with mentors and coaches who help them with career planning
  • 89% said they were interested in becoming a coach or mentor

4. Many managers will already eligible to retire or will retire shortly after becoming eligible.

  • 43% of respondents reported that they are eligible to retire within the next five years;24% are eligible now
  • 13% indicate that they will retire within the first year of eligibility, and 39% indicate that  they would retire within one to five years of eligibility

5. Future retirees are considering a variety of post-retirement work options.

  • 28% of respondents said they would serve in interim local government management positions
  • 34% said they would be interested in consulting full or part-time
  • Many indicated they would pursue some combination of another profession (such as teaching), volunteer, or just put up their feet

6. Local governments do not have many programs in place to recruit, retain, and develop talent for senior management positions.

  • Only 6% of respondents reported that their jurisdiction offers full-time, graduate-level programs. Only 14% offer part-time graduate programs, and only 11% offer programs for undergraduates
  • 53% of local governments don’t have any kind of succession plan, internship, fellowship, step-up, or mentoring program
  • 21% are having trouble recruiting for senior management positions

 

The written comments provided by survey respondents offered additional insights; many respondents felt that their organizations are too small to develop succession plans. Additionally, recruitment challenges are hindered by a lack of support among the public and elected officials, and the current economic downturn and decline in retirement savings could significantly delay retirements.

If we fail to develop the best and brightest who currently exist within our ranks, where will tomorrow’s local government leaders come from? The situation looks worse as middle- and entry-level management positions continue to disappear after years of belt-tightening and cutbacks. From where do you promote up when you have largely eliminated the pool from which talent is drawn? And even if current managers delay full retirement and serve as interim managers, shouldn’t we be thinking about creating a robust talent pool that can provide a different mix of experienced candidates when we need them?

Programmatic Efforts and Solutions

ICMA Executive Director Bob O’Neill tells a story about how he began his career in local government as a management intern with the City of Hampton, Virginia. He frequently reminds colleagues to remember the mentors who gave them a hand; who saw something in them as inexperienced recruits that they couldn’t see in themselves. Developing the next generation of managers is one of the most important functions of our profession. It’s also fun and rewarding.

In 2003, ICMA launched its "Next Generation Initiative" with four broad goals designed to promote the profession, help interested students and career changers enter local government, engage new entrants in important local government leadership networks (e.g., ICMA and state manager associations), and help early- to mid-level careerists build their leadership skills so they are prepared to take on senior roles. Many survey respondents stressed the importance of encouraging local government managers to get engaged in efforts such as these in order to sustain our communities. Here are some ideas:

1. Think regionally about establishing a management talent pool.

Sharing an internship or fellowship position with another city, town, or county can give a candidate broad experience, save your jurisdiction money, and accomplish an important goal while building regional connections. At a minimum, hiring an MPA grad or other student, even in an unpaid capacity, helps prepare that individual to become part of the next crop of managers. Several communities have shared fellows through the Local Government Management Fellowship Program, launched in 2004 (icma.org/lgmf).

2. Plan for the future, no matter how small your organization.

Developing a succession plan won’t require you to hire someone now or you to automatically "anoint the deputy." But it can help you identify the steps you need to take to prepare and budget for staff transitions and changes. Your plan can be an informal talent management plan or a full-blown, council-approved succession plan; it can be as simple as calling an executive recruiter and coaching a fellow or intern in another community.

3. Look for home-grown "diamonds in the rough."

In his best-seller, Good to Great, Jim Collins reminds us that many of the CEOs of the great companies in his study were not white knights who rode in from the outside but instead were promoted from within their existing organizations. Seeking new talent from outside versus existing talent has some merit, but continually disregarding home-team players in favor of saviors from other organizations doesn’t foster a contented, skilled, and sustainable employee base. In the 2003 Harvard Business School case study, "GE’s Talent Machine: The Making of a CEO," Bartlett and McLean cite how Jeff Immelt devoted 40 percent of his time to people issues by strategically studying and placing his senior staff like chess pieces. Not all local governments can be as determined as GE, but a strategic approach to staff planning ensures that future leaders are cultivated within rather than outside the organization.

4. Coach, mentor, or talk to your staff about their careers and plans.

This requires actively engaging your employees, understanding your organization’s "bench strength," and identifying ways to develop those who want to move up (even if it means that they eventually move out). If your staff is small, coach a summer intern, a full-time unpaid intern, or a graduate management fellow in another community or through a state organization.

 

One ICMA member had this advice for his colleagues who are interested in developing their staffs:

Identify next-step career and intermediate training goals for your staff as part of your employee development and appraisal system. Know the key positions that you may not have a suitable internal candidate for. Always try to hire [promising] candidates who could potentially work at a higher level than the position you are filling.

 

To learn more about becoming a successful coach, building a succession plan, or other programs that can help your organization prepare future local government managers, please visit ICMA and the Alliance online at icma.org/nexgen and www.transformgov.org. 

The data in this paper is from a November 2008 ICMA survey. Full survey results are available upon request.

Rob Carty manages ICMA’s Next Generative Initiative and can be reached at rcarty@icma.org.  We invite you to discuss this article online at icma.org/kn.

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