To compete and grow today, no matter what your industry, part of your strategy must be to continually build a smarter workforce. You need employees who are constantly improving their capabilities and knowledge. But there are four critical elements of any smart workforce strategy. How are you doing on each of these?

1. Improved recruiting and retention of Millennials (or Gen-Ys)

Face it, most Millennials are not staying in jobs long enough to become productive long-term employees. Executives constantly complain to me about their inability to hire and retain these productive young employees. Almost every organization today is wrestling with this problem.

Building a Millennial-friendly culture needs to be a top priority for most companies. You have no choice! Sooner or later you will have to figure out how to work with and retain employees from this younger generation. Those organizations that make the transition fastest will have a distinct competitive advantage.

One example I’ve studied is a manufacturer in the Midwest where leaders have transformed their benefits and reward systems to meet the needs of its Gen-Y workforce, which has gone from 10% to 50% of the company in seven years.

What’s your plan for improving the performance of your youngest employees?

2. Engaging older workers to be more productive

Many firms have a growing number of Boomers piling up at the door, trying to decide when to retire. The uncertainty of when these experienced workers will actually leave creates several problems. Some you want to retire today because they are coasting and limiting opportunities for mid-career workers who are ready for a promotion. (This is a huge problem in higher education, where aging faculty routinely stick around too long.) Too often these workers are disengaged and no longer performing at top levels.

You also may have veteran employees with knowledge that is critical to the future success of the business who you want to stay as long as possible. Figuring out how to extend the tenure of essential older workers is another key to building a smarter workforce. Exploring more flexible work options is just one way to retain their capabilities longer, and to extend the time they have to transfer knowledge to younger colleagues.

A smarter workforce means finding ways to maximize the productivity of veteran employees, as long as they remain with the company.

3. Improving knowledge transfer across generations

Enabling younger workers to learn faster from more experienced colleagues is another hallmark of a competitive workforce. This problem is so wide spread that top management is often paralyzed into inaction. One of the first steps to get traction on this is identifying where your greatest risks are for lost capabilities.

We use a simple and powerful tool called a Knowledge Silo Matrix to help clients quickly identify where their most serious threats are, so they can start getting traction on practical solutions that speed up knowledge transfer.

4. Accelerating leadership development

The leadership pipeline in the industrialized world is dangerously thin. More veteran executives are retiring and leadership roles are increasingly demanding, so the supply of battle-tested replacements is much too small. That’s why many organizations today are desperate to find ways to develop their young leaders faster. One of the first things they must do is clarify the difference between current and future leadership skills the organization will need. It’s not just about replicating the talent you have.

Are you paying enough attention to succession planning for key roles? Do you know where those key players will come from? What are you doing to prepare the next generation of your leadership team?

Every organization that needs to improve the capabilities of its workforce to stay competitive must pay attention to these four areas. Ignoring any one of them will be very costly. Want to learn about more practical solutions for building a smarter workforce? Click here for a free introductory chapter to our book The Executive Guide to High-Impact Talent Management. What are your biggest challenges? Let us know where you agree or disagree.