Part of your workforce is nearing traditional retirement age, and you wish to be proactive in helping them plan for the future — both for your sake and for your employees.
Oftentimes, employers these days find themselves facing one of two opposing quandaries: They’re desperate to avoid losing older employees’ experience and knowledge, or they’re seeking to reduce their payroll by replacing tenured employees with younger, less-expensive workers.
Instead of retiring early, many workers today are remaining in their positions far longer than expected, resulting in fewer opportunities for younger generations and forcing employers to address new challenges pertaining to the maturing workforce. The percentage of the workforce 55 and older recently reached a nearly four-decade high, according to the Employee Benefit Research Institute in Washington, D.C., with the sharpest increase among those 65 to 74. By 2020, those older than 55 are projected to account for 25 percent of the workforce in America. Researchers point to baby boomers who are unwilling or unable to live off their pensions and Social Security after age 65.
Employers, however, should be cautious of offering early retirement incentives to their older workers who could represent some of their most experienced and knowledgeable talent. Contrary to myth, says author and talent management consultant Lynne Morton, older workers are often more engaged, more experienced, more familiar with ways to accomplish their work, and more knowledgeable about how to do it quickly. Because they’ve had many opportunities to learn from others. She notes, they often complete their work better as well.
What should you consider when discussing retirement with your employees? Here are strategies for discussing options while remaining transparent but tactful — not to mention legal.
- While it’s OK to ask an employee whether he has career development and/or retirement plans, consult your lawyer and be aware of the potential for age-discrimination lawsuits when discussing retirement with an older worker who doesn’t wish to leave. With a few occupational exceptions, federal law does not support mandatory retirement based on age.
- Meet with employees as a group and lay out retirement options and opportunities, highlighting related company benefits. Emphasize that you’d like as much notice as possible from those planning retirement or other life and career opportunities, as their plans may leave your company shorthanded.
- Offering phased retirement may make the transition smoother for all. “Retiring employees can be frightened about what their life will look like if they are not working every day,” notes Susan M. Heathfield, Human Resources Specialist, on humanresources.about.com.
- Consider engaging alumni as “on-demand” workers. “Retired workers already know the organizational culture, know what kind of work needs to be done, and how to do it, and they may have an interest in keeping connected with the company by working on a project-by-project basis,” Morton notes.
In the end, GetFive recommends encouraging all employees to have a long-term vision for the rest of their lives. After all, as George Burns said, “You can’t help getting older, but you don’t have to get old.”