Retired Executives: e Untapped Resource for Tackling Tough Business Challenges

The Conundrum Around the country, in every industry sector and in every profession, American companies are facing a serious challenge: the retirement of their Baby Boom senior executives with years of experience and specialized expertise. Companies will end up with shallow benches, with not enough talent to handle unforeseen challenges. At the same time, retired executives are asking themselves what s next? They want to continue to utilize their hard-won knowledge, not waste it. This Report examines an intriguing solution to this growing conundrum. Increasing numbers of retired executives are accepting well-paid, part-time consulting engagements and increasing numbers of companies are finding that retired executives are an outstanding resource to tackle today s urgent business needs. 1 ExecBrainTrust.com

Today s retired executives want to stay active and engaged with business. That s the New Retirement. This survey shows how the New Retirement offers opportunity to retired executives and to companies facing challenges that require an experienced, expert hand on the tiller. A New Paradigm The generation that redefined American life is redefining retirement at the same time that American corporations are struggling to find solutions to their biggest challenges. In the next five years, three million upper-tier executives will leave the U.S. workforce as the first wave of Baby Boomers reaches retirement. For American business, this very real, very serious executive exodus raises a big question. Where does a company turn when it loses its most experienced and expert executives? Fortunately, today s retired executives have no intention of abandoning the business world altogether they simply want to change the terms of engagement. Many are exploring the opportunities offered by part-time consulting. And in increasing numbers, companies are hiring retired executives to help with a broad range of projects. 2 ExecBrainTrust.com

Executives Define Their New Retirement Part-time consulting engagements allow retired executives to remain in touch and involved. Who are the executives defining the New Retirement? They re from the top levels of American business. Almost one third held C-level positions before retiring. An additional one quarter managed a division or group at the VP or director level. More than half are from companies with more than 1,000 employees. And they re experienced in diverse industries: on average more than three. 3 ExecBrainTrust.com

Facing the Challenge... and Solving It. When the leaders of American businesses look at trends in human resources, they see both challenge and opportunity. The challenge is obvious experienced executives are leaving the workforce faster than they can be replaced, as the first wave of Baby Boomers reaches retirement. The opportunity is to tap into the deep pool of talent that retired executives represent. About how many consultants will your organization engage over the next 12 months? One thing is clear U.S. companies are making heavy use of consultants to supplement in-house expertise. Approximately half (52 percent) use consultants. Of those companies, more than two thirds use independent consultants. The number of consultants a company engages can vary, but many companies rely deeply on outside talent. More than ten percent anticipate hiring 50 or more consultants in the coming year. 4 ExecBrainTrust.com

Types of Expertise in Demand: Information technology Market research Business growth and profitability Audits Cost reduction Customer relationship management E-commerce implementation Business imperative of IT Management development Product development Business models Compensation and performance plans Competition Customer loyalty and retention Business acceleration/speed to market Government regulations Internet Outsourcing Business consolidation Mergers and acquisitions Supply chain management Capital access and investments Corporate governance Business survival tactics Innovation Selection/deployment of technologies Pricing issues Customer buying behavior Defining sales processes international business development Financial stability and trust Selection and hiring of senior management Profile: Consultants In Demand The retired executives in highest demand for consulting engagements have several characteristics in common. The first is specialized expertise in areas like cost reduction and information technology. The second is experience in multiple functional roles. The average upper-tier executive has performed 2.3 different functional roles and and has developed expertise in 5.5 different specialized subjects. 5 ExecBrainTrust.com

Reasons companies use consultants: Bring in knowledge and expertise that is not available within our organization (75%) Solve specific problems (51%) Organization does not have the time or staff to handle identified problems (50%) Complete specific projects (49%) Bring in new ideas, concepts, innovations (43%) Define problems and/or opportunities (40%) Provide alternative solutions (39%) Train existing staff (33%) Bring in strategic thinking (32%) Collaborate with management (31%) Demand Takes Many Forms There are many reasons why companies hire consultants, but the most common is to leverage talent from outside the organization that doesn t exist on the inside. But it s not always a specialized skill that s lacking sometimes existing staff don t have time to handle an identified challenge. Sometimes getting a fresh perspective is appealing. This interest in looking externally for resources is reflected in many of the reasons given for using outside consultants, and most companies have multiple reasons for using consultants: the average is eight. Lower business costs by hiring on a temporary basis (24%) Bring industry insider knowledge (20%) Act as a change agent (15%) Serve as a mentor and advisor (13%) 6 ExecBrainTrust.com

Profile: Consultants Engaged Companies that hire consultants use them on many different types of engagements: individual projects, multiple projects, and ongoing projects. It s typical for companies to have more than one consulting engagement underway at the same time, and more than a quarter (29 percent) of the companies that use consultants have continuous projects. The typical consulting engagement extends over several months, with three- to six-month engagements the most frequent. About 12 percent last more than a year. How frequent are your organization s consulting engagements? 7 ExecBrainTrust.com

The New Retirement: Active, Involved, and In Business The trend is clear: the vast majority of executives leaving full-time employment want to stay involved and engaged. Fewer than one third expect to engage in leisure activities only during their retirement. More than two thirds want to engage in business-oriented projects as well as leisure activities. Among these, part-time management consulting, mentoring, and board membership are popular. What business-oriented projects will you engage in at retirement? 8 ExecBrainTrust.com

Where Today s Companies Turn for Critical Expertise An increasing number of companies have found that retired executives are a great source of talent and are hiring them. More than half of the companies that use consultants have hired retired executives. Of those that haven t used retired executives, 42 percent would consider doing so. Twenty-nine percent would hire retired executives for consulting engagements if they had a convenient way to locate them. Think companies only hire name-brand consulting companies? Not so. Consulting firms do not have a lock on the market with established companies. More than two thirds of the companies hire independent consultants, not consulting firms. What type of outside consultants do you use? 9 ExecBrainTrust.com

Retired Executives: Available Right Now As more companies look to hire retired executives for consulting engagements, an increasing number of upper-tier retired executives express interest in consulting. Four out of five say they have considered consulting, and more than 40 percent of retired executives have already engaged in consulting. Are you currently engaged in any consulting work? 10 ExecBrainTrust.com

Part-Time Consulting: Lucrative and Satisfying Retired executives have found that part-time consulting can be lucrative as well as satisfying. They price their services differently depending on the project and their involvement. Charging by the hour and the day and are the two most popular pricing methods. Among retired executives who prefer to charge by the hour, the average rate is $252. Among those who prefer to charge by the day, the average rate is $1,560. On what basis would you charge for your consulting services? 11 ExecBrainTrust.com

For Companies: An Efficient Way to Solve Challenges By the same token, many companies have found that it s easier and less expensive to engage executive consultants than it is to hire full-time staff. When they use retired executives, companies can limit the length of engagements, deploy talent exactly where it s needed, and cap expenditures. Costs vary, of course, but on average, companies pay about $136,000 per consulting engagement. What is your organization s approximate budget for a typical consulting engagement? 12 ExecBrainTrust.com

Greatest benefits: 1. Intrinsic rewards from the activity of working and being productive. 2. Accomplishment and recognition. 3. Staying current in the business world. 4. Monetary compensation. Greatest drawbacks: 1. Having to prospect and market consulting services. 2. Taking time away from family and other activities. For Retired Executives: Hassle-Free Way to Find Engagements Retired executives see many advantages in taking on consulting projects. For many, money isn t the primary motivation. The intrinsic rewards of productive employment and the sense of accomplishment are the top two advantages. Monetary compensation is in third place, tied with staying current. The major drawback of consulting is the time-consuming effort prospecting for the right kinds of engagements. 3. Having to deal with administrative duties. 13 ExecBrainTrust.com

For Companies: Finding the Right Experts The average company interviews more than three prospective consultants for each consulting engagement. Upper managers are involved in consultant hires more than two thirds of the time. Companies faced with the challenge of finding the right solutions and not enough in-house expertise will find that retired executives make outstanding consultants. Companies use different ways to locate consultants, but research suggests that no one s found the easy way at least not yet. About four out of five engagements are filled by known contacts. So far, fewer than one third of the companies that hire consultants use the Internet to find them. How are you finding consultants? 14 ExecBrainTrust.com

Results. Delivered. In times of economic uncertainty, it s essential to get the best resources available. For companies, using tested, experienced retired executives means less cost and no overhead. It brings quick results. And clearly, middle and senior executives can benefit tremendously by getting a fresh, outside point of view. For retired executives, using a service that delivers the right engagements is the ideal way to go. Now it s easy to find highly-experienced retired executives for consulting engagements at ExecBrainTrust.com It s been difficult for companies and retired executives to find each other. No longer. ExecBrainTrust changes the game. Retired executives can obtain engagements that match up to their expertise and experience, effortlessly. Companies can obtain consultants who possess a lifetime s worth of experience and expertise. ExecBrainTrust.com

ExecBrainTrust.com retired executives for consulting engagements About Us: ExecBrainTrust is a unique executive search firm, specializing in placing highly experienced retired executives for corporate consulting engagements. Retired executives can join to be notified on consulting engagements. Contact us at: consultants@execbraintrust.com Companies seeking consultants can contact us at: search@execbraintrust.com ExecBrainTrust Tel: 510-303-9900 This Report is based on a survey conducted for ExecBrainTrust by the Wilson Research Group, an independent company specializing in survey research. Copyright 2012 ExecBrainTrust All rights reserved ExecBrainTrust.com