A recent Gallup study (1) found the statistic of more people expecting to retire after age 67 (31%) than actually do (13%) continues to hold as it has for several years. As well, the reality that considerably more people are retiring prior to age 62 than intended to is also consistent (42%).
Among non-retirees, 23% expect to retire before age 62 while 36% of current retirees retired prior to age 62. Why the discrepancy? Poor health, family needs and losing their jobs tell a good part of the story. Sometimes very well-considered plans are interrupted when individuals face difficult life situations. Many of these retirees will face financial difficulties due to earlier than planned retirement.
The Flexible Retirement Option
What if, instead of retirement as the sole option, employees who needed time to take care of their own health issues or care for family members (young or old) were offered one or more options to reduce their hours or make other work adjustments so they could remain employees while taking care of their personal needs/obligations?
Employees who want to keep working but can’t continue to the extent they have historically often welcome the opportunity to remain active in the workforce. In addition to the positive aspects of working, and the ability to focus on something beyond their personal/family issues, continuing to earn at least part of their prior earnings will improve their odds of a financially viable retirement.
Per the 2016 Aegon Retirement Readiness Survey (2), the top two reasons individuals want to work beyond “retirement age” are:
- Want to keep active/brain alert 57%
- I enjoy my work/career 37%
Employers can also reap a variety of benefits, such as retention of institutional knowledge long enough to provide a process for these employees to train and mentor newer employees and document various processes and information that relate to periodic events.
As well, employees responsible for (and highly regarded by) key customers will be able to train employees to facilitate smooth transitions so these important customers continue to receive the high quality service they expect and value.
The “New Flexible Retirement” (3, 4) report found employers lag considerably in offering what employees want in terms of a “flexible transition” to retirement. In the U.S. 61% of workers desire a flexible transition; 25% say their employers provide the opportunity to shift from full-time to part-time as a transition to retirement.
Forward-thinking employers have a substantial opportunity.
Older Prospective Employees Who Have Lost Jobs
Seasoned leaders know people sometimes lose jobs for reasons completely out of their control. Hiring managers of older workers frequently find these employees offer more than expected.
As well, a prospective employee approaching “retirement age” does not make them an undesirable job candidate. They deserve the same consideration as others. By not considering these individuals you may well be doing your company a huge disservice.
In many cases these prospective employees bring years of experience, often industry, customer or other relevant knowledge, expertise and a stronger work ethic than typical employees. They also are often willing to share their knowledge, mentor and are eager to learn new skills.
Our workforce is aging, there is a shortage of specific skill sets, and the pace of change has reduced continuity previously typical in workforce transitions. Providing a valued employee a flexible work arrangement as they transition to retirement is simply good business. Also smart is actively considering hiring older employees. They may well be valued employees AFTER younger hires have moved on – since shorter stints are more typical among younger generations.
- Saad, Lydia, Three in 10 U.S. Workers Foresee Working Past Retirement Age, Gallup, May 13, 2016
- A Retirement Wake-Up Call: The Aegon Retirement Readiness Survey 2016, Aegon Center for Longevity and Retirement, 2016
- The New Flexible Retirement, Aegon Center for Longevity and Retirement, 2015
- Older Workers Ask: Where’s My Flexible Retirement? Forbes, January 28, 2016
- Assess current internal policies relating to flexible work arrangements. If no current program exists specific to flexible transitions to retirement, consider the benefits to your company and your employees of developing a program. Gain input and feedback from a variety of older highly-valued employees.
- Ensure your company doesn’t provide flexible work arrangement to some employee groups that actually should be offered to a broader spectrum of your workforce (e.g. flexibility only for new parents to accommodate caregiving needs).
Evaluate your workforce to identify the number of employees, their current responsibilities, roles and contributions to determine what actions are appropriate to plan for current and future flexibility programs that benefit both the business and employees.
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