You've probably already heard it all: The baby boomers are all going to retire, and corporations of every stripe will face a sudden dearth of both labor and top-level executives to manage it. There aren't enough younger workers to make up the shortfall, and anyway, they don't have the experience their older colleagues have. Meanwhile, future productivity gains expected from business process automation and other IT efforts will not be sufficient to make up the difference. The resulting brain drain will send shock waves throughout corporate America, as organizations compete more and more fiercely for the talent they need to survive and grow.

Like all such dire predictions, some of it is true, and some of it isn't. Yes, it's true that the baby-boom generation has already begun retiring, and will continue to do so for the next 20 years. But the effect on the labor supply will not be as dramatic as expected. Says Peter Cappelli, director of the Center for Human Resources at the Wharton School: "Lots of people of this cohort have already retired early, partly because companies are trying to get rid of them. Another significant percentage of them simply don't want to retire." If companies want to hang on to older workers' expertise, he says, it's not hard to do: "Hire them on as consultants, use them when you want them, set up alumni programs. It's a piece of cake."

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Meanwhile, younger workers pose a far more confounding problem. Lofty expectations and a near total lack of loyalty have conspired to make younger workers entirely unpredictable. All of which is sending CIOs and other executives into a near panic. In the latest survey of IT professionals by the Society for Information Management, for instance, "attracting, developing and retaining IT professionals" ranked No. 2 for the second year in a row on the top ten list of IT management concerns in 2006, ahead of security and strategic planning.

But through careful planning and management, these younger employees can become valuable, highly productive, even loyal members of the corporate workforce. And IT should be able to take up some of the productivity slack—business automation and other technologies conducive to the creation of a flexible workplace will certainly march on.

So the real issue for corporations becomes the continuous, ongoing effort to identify and keep all their top performers, whether they are old, middle-aged or young. Experts agree that while the bogeyman of baby-boom retirement may be overblown, companies face a variety of challenges in their efforts to maintain a top-level workforce—from the breakdown of the longstanding contract between employers and employees to the restlessness and high expectations of younger workers. Doing a better job of employee retention is critical to solving the problem. Employee churn is the same as customer churn: It's a lot cheaper to keep the ones you have than to acquire new ones.

Now, more than ever, it is incumbent on corporations to marshal all their forces—information technology as well as human resources—in the service of determining three critical elements of the human equation: What does your workforce look like now, what should it look like, given your business goals, and how do you retain that optimized workforce once you've acquired it?

Next page: Why Keeping Top Talent Is a Challenge

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