Maximizing an Aging Workforce – It’s All in Your Mindset. Catherine Collinson, CEO and President of Transamerica Retirement Institute and Transamerica Center for Retirement Studies, recently wrote an article on why it’s so important for plan sponsors to understand how older employees think about retirement. Hint: It’s different from how you, and the rest of your employee population, are thinking about it.
While plan sponsors spend a great deal of time thinking about how to help employees prepare for retirement during their working years, many don’t take into account what it means for those employees to retire, or how it will impact their workforce. Employers are aware that employees want — and many need — to work past age 65, but they are slow to act on that knowledge, Collinson writes. She cites a Transamerica survey of 1,802 employers that found that 69% acknowledge most of their employees could work until age 65 and still not have enough saved for retirement.
The bottom line is that retirement at age 65 is becoming more a fairy tale than a reality. As such, many employees are extending their careers because they need the income security and benefits that a steady job provides. Less are staying on the job because they’re passionate about what they do. Employers understand that, but many have not implemented business practices to support employees who want to work past traditional retirement age, Collinson observes.
So what’s a plan sponsor to do? Collinson writes: “Older job seekers… are having a tough time breaking through the ‘HR firewalls.’ Now is the time for HR teams and recruiters to knock down these barriers and open their hearts and minds to workers of all ages to keep the workplace vibrant and productive, with inter-generational collaborations and mentorship. That shift would also help put employees in a stronger financial position to transition into retirement, if and when they are ready to do so.”
Here are a few other proactive ideas:
- Consider a phased retirement program. With more employees wanting — and again, needing — to remain on the job past age 65, a phased retirement program can be an attractive option. The Transamerica survey found that just 39% of employers currently offer flexible work schedules for pre-retirees. Only 31% have programs in place enabling pre-retirees to shift from full-time to part-time or take on less demanding or stressful roles (27%). And just 27% involve pre-retirees in succession planning, training and mentoring.
The good news is, there’s no single formula for phased retirement programs, so you can design one that fits the unique needs of your organization, its job functions and your employees. There are so many options when it comes to having older, more seasoned employees mentor younger generations, helping to make that transfer of knowledge more seamless when senior-level employees retire and younger ones step into those roles. It also helps with succession planning, again creating an opportunity for a smoother transition of responsibility to the younger generation.
- Invest in continuing education. Help employees keep their skills current by offering educational support through training classes, outside conferences, tuition reimbursement, etc. According to Collinson: “Still, it is ultimately up to employees to take the initiative and capitalize on such opportunities when they’re available. Continuing education should be a core value in professional development, part of annual goal-setting for employers and employees alike… Continuing education can also help mitigate risks for companies and prevent the skills of valued workers from becoming obsolete… It’s truly a shared investment.”
- Update your organization’s Diversity & Inclusion practices to include aging-friendly practices and policies. It’s a good idea to seek advice from outside legal counsel when making these updates.
As you can see, there are many areas where employers can make an impact to help pre-retirees transition from full-time employment to the next stage — whether that be phased retirement, a part-time role, or when they’re ready, full retirement. When you meet them where they are, and help them to be active, thriving members of your workforce, pre-retirees can be a tremendous asset. All it takes is a change of mindset and a proactive approach to helping them succeed. That’s a win-win for pre-retirees, and for your organization.
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