A number of years ago, I began to conduct pre-retirement education classes for employees who were thinking about retiring in the not-too-distant future. The classes were very innovative at the time.
Previously, an employer brought in the retirement plan administrator and the Social Security rep to explain to an employee what to expect for funds and how to apply for benefits. Two weeks later, the employee retired.
Then we began to provide a comprehensive education effort with the employee and spouse, involving not only what they would receive to live on but also how they should be planning money matters.
We began talking to employees at age 50. We covered health and psychological issues of retirement, changing relationships of spouses, retirement living options and social networks (the old-fashioned, non-digital meaning). We began to address the situation from a holistic perspective, recognizing that changing from a work situation of eight to 10 hours a day away from home to days without fixed demands had major implications.
Needless to say we thought we were on the cutting-edge of programs and had an enlightened view of what we needed to do for employees. We even evolved the program over time to address new considerations. For example, the health element expanded into bringing in a nutritionist who specialized in the changing needs of people over 60. We added a gerontologist to address exercise and health concerns.
The basic assumption was that eventually these people would become separated from the employer because they were no longer going to work: the classic definition of retirement.
However, as in life, things have a way of changing. Some are brought on by external change, such as the financial meltdown and loss of retirement income. Other factors also may include economics but a bit more indirectly, such as the risks associated with the gap in health coverage retirees may face, or loss of security with house devaluation. One factor that is beginning to show up is loss of social interaction and isolation. People can become “islands” even within their own homes as everyone gets tied into electronic interactions.
Whatever the reason, we see a substantial switch from the “no longer going to work” style of retirement. People are looking at work with a new eye. It becomes a tool they want to use in a new way. They want the stimulation that work can provide, not mindless activity.
People really want the work-life balance that “enlightened” organizations talk about but have trouble putting in place, given economic and budget pressures. They want to integrate the best parts of their job with things they view as worthwhile, and if they can make some money in the process, so much the better. And, frequently, the compensation doesn’t have to be at the same level they received while on the job. The pay is supplemented by all the non-financial attributes of a new work environment.
What does all this mean for employers? It means there is a great opportunity afoot for those willing to explore new operating strategies. First, employers should recognize there is going to be a substantial exodus of senior employees in the next three to four years. Needed skills will become even more scarce. We are already hearing stories. Even with high levels of unemployment, some employers are having difficulty finding employees who have the knowhow and experience to fill positions. What will happen when the number of openings increase?
Remember the warnings in a previous article about “the good people bailing out when the economy gets better?” It isn’t so far away at this point. It is going to feel even closer if an employer starts having to grow the talent, or waits until the talent matures somewhere else. Eighteen months will make a lot of difference. Can employers replace 20 percent of their key employees in 18 months, especially if everyone else is part of the same scramble? Yes, I’m painting a dire picture from the management perspective.
The first lesson is to focus on retention. This applies across the board to all employees. The low-hanging fruit is the “older employee.” Retaining them is easy. They often don’t cost as much, they typically won’t demand as much, and employers should have fewer employee relations problems if they are managed properly.
Some simple ideas for working cooperatively with the “older employee” are:
- Allow schedule changes — not just shorter hours, but maybe fewer days per week. Consider job sharing between two potential retirees, each working for three- to six-month intervals.
- Change the job. Use older employees’ skills for special projects. Make them trainers. Use them as problem solvers.
- Consider agreeing to pay and status changes that are mutually beneficial.
- Think of how this flexibility could be used to attract key people from a competitor.
- Utilize the idea of independent contractor but be sure to address the legal issues. Maybe the employer can assist the employee in starting their own business, and develop a special rate structure as part of the arrangement.
The new employment market has all sorts of opportunities — if employers use some creativity.
Ardon Schambers is a principal in the consulting firm P3HR Consulting & Services.