As many aging baby boomers decide to continue working for a few — or several — years past the traditional retirement age, employers see a mixed blessing. On the positive side, they get the benefit of more years from their most seasoned and experienced workers. But delayed retirement also is seen as delaying the entry of younger people into the workforce and complicating how employers deal with workers who for health or other reasons should retire.
All in all, the later-retirement trend forces employers to give more thought to how they handle what’s becoming a new model for retirement. It used to be that workers would set a date to retire and then quit the workforce cold-turkey. Now instead of a here-today-gone-tomorrow event, retirement is likely to be a transition.
The transition can take different forms. Sometimes in preparation for full retirement, older employees mentor newer workers. Others heading toward retirement work part time for a while, and some leave the regular payroll but stick around on a consultant basis as they enter retirement.
When retirement comes in phases rather than as a single act, employers need to consider how they can get the most from workers heading toward retirement and ease the transition for their employees — all while making sure they reduce the danger of age discrimination.
Open a discussion about retirement
Cal Keith, a partner in the Portland, Oregon, office of law firm Perkins Coie LLP, says when an employee indicates he or she is thinking of retiring, the employer should begin a discussion instead of carrying out a rigid process. “Talk to them rather than impose it top down,” he says. “Say, ‘Let’s talk about how to transition.'”
If the employee isn’t involved in how the transition goes and then he changes his mind, it can look like the employee is being forced out because of age. By involving the employee, “you avoid the situation where you’re going one way and they’re going another,” Keith says.
The process becomes a joint transition. “If you’ve developed with them a plan about how you’re going to off-load work . . . they can’t complain. They’re part of the plan,” Keith says.
The prospect of so many workers retiring in the near future puts many employers on edge. “It’s nerve-racking for the employer not knowing when somebody’s going to leave,” Keith says. But there are solutions. For example, a retiring employee may go part-time while working out of the business. “That’s a win-win,” he says. “The employee gets the advantage of slowly working out. The employer gets the advantage of retaining that knowledge during the transition time.”
How employers can help
With the process of retirement changing, employees can benefit from an employer’s planning related to transitioning workers into retirement.
Chris Butler, a partner in the Atlanta office of law firm Ford & Harrison, says employers might consider posting retirement-related publications and articles in company newsletters and intranets. Designating a go-to person to address retirement-related inquiries also can benefit both the retiring employee and the employer preparing for the future.
“Larger, more structured employers might also consider investing in retirement coaching and consulting, providing employees nearing retirement with professional guidance in working through the oftentimes confusing and emotional process,” Butler says.
Prepping for loss of boomers
Regardless of whether boomers retire sooner or later, many employers are concerned about their loss. In April, the Society for Human Resource Management (SHRM) along with retiree advocate organization AARP released a joint poll showing that 72 percent of the human resource professionals surveyed called the loss of older workers “a problem” or “a potential problem” for their organizations.
The HR managers said the actions their organizations have taken to prepare for boomer retirement include:
- Increasing training and cross-training (45 percent).
- Developing succession planning (38 percent).
- Hiring retired employees as consultants or temporary workers (30 percent).
- Offering flexible work arrangements (27 percent).
- Designing part-time positions to attract older workers (24 percent).
The poll also found many employers unprepared for the loss of retiring older workers. Roughly 71 percent of those polled hadn’t conducted a strategic workforce planning assessment to analyze the impact of workers 50 and older who will leave their organizations.