- Only half of employers said they have a good understanding of when employees will retire, despite 83% of them saying a significant number of employees are nearing or are at retirement, according to a Willis Towers Watson (WTW) study of 2.9 million employees. The 2018 Longer Working Careers Survey revealed that 54% of employers said they believe the loss of talent caused by retirement will pose the most significant labor market risk in the next five years. Half said they think they will encounter difficulty finding workers to replace those who retired, and 48% voiced concerns about the loss of organization-specific knowledge.
- Almost half of respondents said they are concerned that benefit costs will rise as employees delay their retirements, and 41% said they worry that this delay will also heighten wage and salary costs. Postponing retirement could mean trouble for younger employees, too; 37% of employers said that they have concerns that the delays could prohibit employees with less seniority from advancing.
- Searching for solutions, employers enacted measures like wellbeing enhancements, flexible employment, consulting arrangements and phased retirement. Two-thirds of organizations said they offer financial wellbeing or retirement planning programs designed to assist older employees whose retirement is nearing. Almost a third of employers said they allow workers to change positions, and a quarter provide part-time positions. About half of businesses said they allow retired workers to come on as consultants or contingent workers. Only one in 10 employers said they offer phased retirement programs.
The aging workforce vexes employers with the dichotomy highlighted by the WTW study and previous research. When older workers — many of whom have served their organizations for a long time, relatively speaking — leave, they may put into effect a phenomenon referred to as the "brain drain." When employees retire, they leave with years of experience and knowledge in tow. But workers who stay on the job well into their later years may raise healthcare costs if they require more medical attention and prevent younger workers from forming their own career pathways.
Despite this clash, workers who put off retirement or total retirement have proved valuable workers, especially in light of low unemployment rates and the skills gap. As employers consider how to address this wedge of the workforce, leaders should ensure their practices fall within the boundaries of the Age Discrimination in Employment Act (ADEA) and consider how to manage a workplace that incorporates workers of five different generations.
The ADEA prohibits employers from discriminating against workers on the basis of age, which means leaders must expunge all bias from their hiring practices, performance reviews and even their day-to-day language. "Managers sometimes use language that, outside of the workplace, wouldn't raise an eyebrow," Matt Gomes, partner at Weinberg, Wheeler, Hudgins, Gunn and Dial, previously told HR Dive. He cited adages like "you can't teach an old dog new tricks" and colloquialisms like "new blood" as language that gets employers into trouble.
When one workplace houses members of five different generations, as they often do these days, employers need to be cognizant of how these generations interact and how they may clash. A Gen-Zer, a millennial and a Gen-Xer, for example, might choose different methods to communicate about the same issue. "Millennials are used to communicating through programs like Snapchat, Twitter, Instagram, Slack and Google Hangouts. Even email seems old school," Heather Myers, chief psychology officer at Traitify, previously told HR Dive. "For older generations who grew up with letters, phone conversations and eventually email, rapidly changing technology can be more difficult to keep up with."