If there were a single age at which workers would universally retire, employers would have an easier time managing their teams and taking steps to ensure a reasonable degree of continuity. But new data from consulting firm Willis Towers Watson reveals that while 83% of employers have workers who are nearing retirement, only 53% have a solid understanding as to when those workers intend to call it quits. And while 81% of employers agree that managing the timing of their employees' retirements is important, only 25% feel they do so effectively.
If you have older employees who are an integral part of your business, it pays to have honest discussions about retirement with them to gauge their plans and work around them. At the same time, it helps to be flexible in helping older workers transition into retirement, as doing so will benefit not only them but your business as well.
Don't let retiring workers derail your business
Though older employees are often the victim of age discrimination, the reality is that they bring a lot to the table. After all, it's hard to replace the years of knowledge and experience that workers in their 50s and 60s have. In fact, a good 80% of businesses regard older workers as crucial to their success. As such, many worry that retiring employees will leave them with a major void to fill.
On the other hand, employers are worried about workers delaying retirement as well. Nearly half fear that delayed retirement will increase the cost of employee benefits over the next five years, while 41% worry about increased salary costs. And 37% are concerned that delayed retirements will limit the extent to which they're able to promote younger workers -- a fact that might cause new talent to jump ship.
The solution, therefore, might boil down to a series of open conversations with your older workers, combined with a flexible approach to them. If you create an environment in which employees can discuss their retirement plans without backlash, they'll be more likely to clue you in on what they're thinking.
Flexibility is also key in managing older workers. Many near-retirees aren't quite ready to close out their careers but also aren't ready to take the leap into full-fledged retirement. As such, offering workers the option to pursue a phased retirement might be beneficial on both sides -- older employees can ease their way into retirement both emotionally and financially, while companies can use that transitional period to bring newer workers up to speed. Surprisingly, however, only 9% of employers currently offer formal phased retirement programs, but that number could grow to 23% by 2020. And while informal phased retirement programs don't offer older workers the same peace of mind as formal ones, they are a bit more prevalent.
There are other options to explore with older workers as well. Employing them as consultants rather than salaried workers, for example, will give them the option to scale back their hours or set their own schedules as they age. And on the employer end, there's savings to be reaped by not having to pay for benefits like healthcare.
Being in tune to your older workers' retirement plans can help you better manage turnover and avoid employee knowledge gaps that hurt your business's productivity. The more open and flexible you are with workers nearing retirement, the more everyone stands to win.