• CEOs of industrial distribution companies have no clue where they’re going to get the next generation of sales people with enough knowledge about the complex products clients need to keep their factories in running.
• CIOs in California state government are worried about retaining the skilled talent needed to run county property tax systems.
• Quality managers in pharmaceutical manufacturing are concerned about losing veteran older workers with no knowledgeable replacements in the pipeline to keep processes safe.

Three very different sectors, but almost identical concerns: “We have lots of veteran employees with deep knowledge of complex systems or products, and no idea how we’re going to sustain these capabilities when our people retire.” I’ve given keynote talks in the last few months to executives in these three sectors, and I’m seeing similar patterns: many organizations are sitting on a ticking time bomb of lost knowledge – or lost capabilities.

When these older workers go, the performance of their organization is going to take a big hit. My goal is to help leaders mitigate these risks. Here are four questions to determine whether retirements are likely to threaten your organization’s capabilities:

1. Are your offices or operations located in a rural, suburban or urban setting?

The CIO for a county in central California knows that her location in a heavily agricultural region makes it almost impossible to retain young, technology specialists for more than a few years. And a pharmaceutical manufacturing plant in southern Texas has a real problem attracting skilled professionals to its site.

Organizations operating in rural settings are usually at a distinct disadvantage when it comes to recruiting replacements for highly skilled workers and managers. Not only is there a smaller talent pool to recruit from, but it is also harder to entice younger talent to relocate to your part of the world. If you’re running this type of operation, or have part of your organization in a rural setting, you need to plan even further ahead for key transitions because it will take longer to fill those roles.

2. Are you clear about which jobs matter and which don’t?

All jobs are not created equal when it comes to sustaining critical capabilities. An industrial distribution company in the Midwest has a 70-year-old salesman who is their only expert in making and selling hydraulic hose couplings. Top management recently reclassified him as a hydraulics specialist, so he could focus on transferring his unique knowledge to other sales people.

Meanwhile, the company’s purchasing manager retired on short notice, and the CEO saw that as an opportunity to bring a more skilled person into this role. When it comes to transferring and retaining knowledge critical for future performance, you must be clear about which employees pose a risk and which present an opportunity to upgrade your talent.

3. Are you making the right assumptions about how much time you have to deal with the risks of knowledge loss?

Executives consistently underestimate the time they have before facing these problems. As I showed in a Harvard Business Review Blog Post “Is The Aging Workforce Really Creating Your Skill Shortages?” many leaders don’t see a link between their aging workforce with the problem of serious skills gaps.

One of the hardest things to deal with is unplanned retirements of employees you’re counting on to stay longer. As an employer you have a right to do succession and workforce planning. That means you can ask valued employees to keep you informed about their retirement plans, but these conversations must be handled extremely carefully to avoid any suggestions of age discrimination.

You need to know what to do and what NOT to say. It is best to get advice from an attorney or HR expert before broaching the subject of retirement. But if handled appropriately you will greatly reduce the risks of being blind-sided by an unexpected and costly departure.

4. Can you recruit, develop and RETAIN the Millennials needed to replace retiring workers?

One reason that an aging workforce is so problematic for many companies is that leaders have learned how difficult it is to develop and retain a new generation of highly skilled employees. The needs, values and behavior of the generation entering the workforce are a consistent source of frustration for many managers. Different priorities, work styles, and ways of learning clash with what many Baby Boomers expect.

But, as frustrating as these differences are, you have no choice! Aging Boomers are going to retire – or die – eventually. And every organization that expects to survive, much less grow, is going to have to figure out how to prosper with a Millennial workforce. Organizations that find a way to engage and retain productive younger workers fastest are going to be much more successful in negotiating the great wave of Boomer retirements. Are you making progress in creating a more Millennial-friendly culture? If not, contact us and we can help. If you ignore this problem, your organization is much more at risk of losing critical capabilities as more Boomers retire.

What do you think? Do you have essential knowledge at risk in your organization? What questions are you asking to determine where your greatest risks are? I’d welcome your comments.