With the exodus of baby boomers from the workforce, an increased focus on recruiting and retaining millennials, and fewer dollars available for traditional training and development opportunities, many companies are finding that mentoring programs make good, economical business sense.

In fact, 70 percent of Fortune 500 companies now have formal mentoring programs, according to the American Management Association. And it's a trend that Jim Perrone has seen taking shape for the past 20 years.

As the managing partner of Perrone-Ambrose Associates Inc., a 30-year-old Deerfield, Illinois firm, Perrone has helped design and implement formal mentoring programs worldwide for a number of public and private organizations. His clients have included the U.S. Postal Service, Blue Cross/Blue Shield, Lockheed Martin Space Systems, Towers Perrin, Watson Wyatt Worldwide, and Newell Rubbermaid.

“We see people getting much more deliberate about structuring these mentoring programs,” he said. “And with just enough structure, these [programs] tend to really take off.”

Formal mentoring programs can help companies accomplish a variety of business objectives, including developing high potential employees, orienting new hires, developing more diverse leaders, integrating different business groups within the same organization, and developing management and other skills, Perrone said.

And now with baby boomers beginning to exit the workforce, mentoring programs provide a way for companies to ensure that valuable knowledge is passed on and retained within the organization, said John Agno, an executive business coach and owner of Signature Inc., an Ann Arbor-based leadership development firm.

Some companies also are finding that mentoring programs help recruit and retain employees – especially millennials, who tend to want coaching and mentoring, said Agno.

“So folks are recognizing that we're all knowledge workers today,” he said, and if employees leave with all that knowledge without passing it on, “that can be a huge brain drain and we don't want that to happen.”

It's not always about coaching millennials either, Agno said. In come cases, younger workers are mentoring older employees to pass along their knowledge about technology.

Other companies are calling on their retired employees and asking them to provide mentoring to younger, less experienced workers, he said. It helps the existing employees build their skill sets, while also providing retirees with the opportunity to pass along valuable knowledge.

Mentoring programs make sense economically too, Agno said. Generally, they provide a lower-cost way of training and developing employees.

Next week, read about how you can create a successful mentoring program in your organization.

Written by Jenny Cromie, certified human resources specialist (CHRS)