The baby boomer generation (born between 1946 and 1964) has been a huge presence in the workforce and marketplace. Baby boomers have already started to enter retirement age, and the decisions they make can have a profound effect on the economy, our national and Florida healthcare systems, and the workplace for future generations.
The aging of the American workforce has been called “the silver tsunami.” Today, approximately one in eight Americans is 65 or older. According to the Pew Research Center, roughly ten thousand baby boomers have turned 65 every day since 2011, a trend that will continue until 2030.
Despite the significant influence baby boomers exert on business productivity, employers report a limited understanding of the retirement plans of their employees. In a study conducted by Willis Towers Watson, the U.S. Longer Working Careers Survey, 143 large U.S. employers across multiple industries were surveyed about the actions they are taking to support the aging workforce. Collectively, the companies surveyed employ 2.9 million workers.
According to the survey, 83 percent of employers report they have a significant number of employees nearing retirement age. Despite this knowledge, only 53 percent report they have a good understanding of their employees’ retirement plans. While 81 percent say managing the timing of their employees’ retirements is an important business issue, only 25 percent say they do this well.
Clearly, employers view older employers as critical to the success of their business. They are concerned about the expected loss of talent, especially organization-specific knowledge.
With a growing number of workers planning to retire, employers are developing new strategies for managing retirement patterns.
Two-thirds of employers offer wellness or retirement planning services tailored to older employees. When asked, employers who are not offering these types of services plan to by 2020. An increasing number of employers have modified working conditions to make it easier for aging workers, and that trend is expected to continue.
An increasing number of employers allow their employees to change job positions or shift from full-time to part-time employment. This trend is also expected to increase in the future.
Nearly half of the employers who responded to the survey have hired their retiring employees as consultants or contingent workers. Similarly, retired employees are working as consultants within their industry.
Only 9 percent of employers currently offer a formal phased retirement program, but this type of strategy is expected to grow by 2020. Informal phased retirement programs are more common because they avoid administrative and compliance challenges of more formal programs. Employers tend to offer more informal programs to professional workers, and less often to those in sales, administration or hourly positions.
Older workers are a sought-after resource by many employers. And, research indicates many employees would like to work well into their 60s and beyond. It is important that employers understand the motivations and circumstances employees have for retiring. If they don’t, they will be vulnerable to workforce issues associated with employees who delay retirement even though they have lower engagement and productivity. Employers need to determine the best ways to effectively draw on the expertise of older workers, while carefully managing retirement strategies.
Here are Lanier Upshaw we understand your people are your most valuable asset. Companies today need a partner that can help them navigate the changing landscape of human resources and employee benefits. Contact us here for more information about our innovative approaches to control costs and leverage your benefit plans.