Employers are in a bind as they simultaneously deal with issues arising from the “Great Resignation” and challenges in attracting and retaining talent. But as older generations prepare for retirement, recent research suggests employers must realize the solutions they are preparing for the Great Resignation won’t necessarily apply to those who are ready to transition out the workforce.
According to a recent Nationwide Retirement Institute survey of retirement plan sponsors and participants, one in four employer-sponsored retirement plan participants age 45 and older—and 30% of participants 65 and older—report that the COVID-19 pandemic has caused them to push back their retirement or prevented them from ever retiring at all. On average, those who say they must delay retirement expect to work at least three years later than they would have prior to the pandemic.
Having to delay retirement has had a direct impact on employees’ happiness at work and business outcomes for their employers. Nealy half of plan participants (48%) reported feeling frustrated, 42% are worried, 38% are sad and 17% feel hopeless. These emotions have begun to impact their work, as 48% report their delayed retirement has negatively impacted their mental health, 39% report lower morale and 23% report lower productivity. At the same time, fewer than a quarter of plan sponsors surveyed are even aware that these repercussions are causing issues in their workplace.
“While many companies are focused on attracting and retaining talent during the Great Resignation, there is another group of their employee base that needs attention in order to transition out of the workforce,” says Amelia Dunlap, Nationwide Retirement Solutions marketing vice president. “It is clear delayed retirements can foster negative emotions, which can be detrimental to a company’s culture and bottom line.”
Dunlap says employers should look to invest in the types of short-term and long-term financial planning solutions that help employees reach their financial goals and prepare for the retirement they want—when they want it.
“Doing so may not only help those who are ready to retire, but potentially serve as a reason for younger talent to stay with the company,” Dunlap adds.
According to Morgan Stanley at Work’s “State of the Workplace” study, nearly all human resources (HR) executives are prioritizing re-evaluating workplace financial benefits for 2022. The study shows that employees and employers agree companies could do more, with more than four in five employees and nine in 10 employers believing their companies should be more involved in helping employees understand how to maximize financial benefits amid the pandemic.
In the Morgan Stanley survey, 91% of employees say they would feel more invested in staying with their employer if it offered financial benefits that met their needs, and 90% say their company should prioritize re-evaluating its financial benefits package in 2022. HR executives feel there is room for improvement to stay competitive, with 79% saying that lack of financial benefits will result in attrition and 95% saying their company’s re-evaluation of the financial benefits package for 2022 is a priority.
“The pandemic-fueled uncertainty has led many employers to focus more attention on how to deliver financial benefits that meet their employees’ needs,” says Brian McDonald, head of Morgan Stanley at Work. “Employees are now looking for employers to offer a full spectrum of financial benefits tools and guidance to help them along the right path financially. As a result, those companies that offer a robust benefits package that includes retirement planning, equity compensation, student loan refinancing plans and overall financial wellness benefits will differentiate themselves in the face of unprecedented competition for great talent.”