More of the workforce remaining for the long haul can be great for the employer. After all, this means more industry and organizational knowledge is kept in-house, customer relationships are continued, and loyal employees stay on, resulting in better retention rates and fewer vacancies.
However, there are downsides, too, especially for a growing organization. In an organization with a lot of new employees or employees looking to advance, one of the biggest issues caused by having a lot of long-tenured employees is the concurrent lack of mobility for those who are ready to take on senior roles. This can cause frustration and resentment among those who feel they should be able to advance.
Let’s take a look at some of the many reasons senior employees stay in the workforce, especially those beyond traditional retirement age:
- Money. They may not have saved enough for retirement and need to continue to work, as long as they are physically able to do so. This could also stem from previous savings’ taking a major hit because of a market downturn or a major life expense that takes a big chunk out of accrued retirement savings, for example. They may also have ended up with higher expenses than anticipated or debt. Either way, a lack of adequate retirement savings is one of the primary reasons seniors continue working longer than they may have originally planned.
- Something to do. They may long for mental stimulation and social interaction—things that are provided by a job but less so in traditional retirement. Just because retirement age comes along doesn’t mean people suddenly lack the desire to be challenged and feel they’re accomplishing meaningful things.
- Advancing interests. They may want to start second careers to work in a field they couldn’t previously be in. This might include taking on a career that’s more aligned with their personal dreams or vision, even if it is lower paying than the role they held during their prime working years.
- Like the work. They may simply love the work and see no reason to stop if they’re still physically and mentally capable of performing the job. Advances in health care mean that people are living fuller lives for more years than before—also extending their productive years in many cases.
- Need the distraction. They may have lost a spouse, either through the spouse’s passing or from a late-life divorce, and need additional income or a way to stay occupied.
Employers that find they have a lot of employees in this situation—and perhaps the accompanying frustration from those who wish to advance in the ranks but can’t—have a few options regarding how to help employees retire when they’re ready without discriminating based on age. Here are a few examples:
- Offer voluntary benefits that help ease the transition to retirement, like work schedules that gradually decrease over time. This may allow the transition to be smoother while still providing some income for a longer time frame.
- Consider offering part-time or contractual opportunities for employees. This can allow them to step down from their role while remaining active and still being an asset to the organization. It could be something like allowing them to consult on major projects or offer mentoring services.
As long as these benefits are purely and legitimately voluntary, they could provide those who wish to utilize them with an easier way to transition out of the workforce when they’re ready.