Although 83% of employers have a significant number of employees at or nearing retirement, only 25% say they are effectively timing their workers’ retirement, according to the 2018 Longer Working Careers Survey by Willis Towers Watson.
While 81% of employers say that managing the timing of their employees’ retirement is an important business issue, only 53% say they have a good understanding of when their employees will retire.
Eighty percent of employers view older employees as crucial to their success. Fifty-four percent believe the loss of talent due to retiring workers over the next five years will be more significant than other labor market risks. Forty-eight percent worry about the loss of organization-specific knowledge, and 50% expect to have difficulty finding workers with similar knowledge and skills.
“Many employers say they are not managing the retirement of their older workers effectively,” says Alan Glickstein, managing director, retirement, at Willis Towers Watson. “With growing numbers of workers either planning to retire or delaying their retirement, the stakes are high. As a result, employers are rethinking how they manage their workers retirement patterns and are taking action.”
Forty-nine percent of employers think that delayed retirements over the next five years will increase benefits costs. Forty-one percent are worried that they will increase wage and salary costs, and 37% are concerned that workers who stay on past normal retirement age will block promotions for younger employees.
To cope with this, employers have either adopted or plan to adopt one or more of the following strategies over the next few years:
- Offering financial wellbeing programs to older employees approaching retirement.
- Offering flexible employment, such as the possibility of changing positions (offered by 30% of employers) and the ability to work part time (27%).
- Permitting retired employees who are collecting benefits to work as consultants or contingent workers (49%).
- Allowing workers to take a phased retirement (9%).