Freedom 65? These days, it’s more like Freedom 75. “Longevity is driving a revolution equal to [the one that] the internet drove with technology,” according to Lisa Taylor, President of The Challenge Factory, a career and talent management company based in Toronto, Ontario. The impact on our workforce is really significant. And it’s HR that has to be the leaders.” At the 2014 Your Workplace Conference, Taylor stated, “In revolutionary times there are three groups of people: trailblazers, bystanders and casualties. Trailblazers see what’s happening and run toward it. Bystanders freeze and watch to see what’s coming. Casualties see what’s coming and run away.” In today’s evolving workplace, trailblazers proactively combat some of the challenges of delayed retirement — including fewer work opportunities for the younger generation or increased health costs — and view this phenomenon as a competitive advantage. These workplace leaders recognize that as workplace demographics change, the traditional view of retirement must follow suit.
Retirement norms are changing
Today’s retirement norms reflect yesterday’s reality. Taylor shared with her audience that in 1935, when the retirement age of 65 was established in the U.S., the average life expectancy was 62 years old. Over the last 80 years, life expectancy in North America has risen dramatically, reaching age 80 for men and 84 for women in Canada. Increasingly, many people are putting off plans to travel the world, putter in their gardens or improve their golf game to stay in the workforce.In a subsequent Your Workplace Conference session, entitled “Is 75 the New 65,” Amanda Coade, Manulife Manager, Plan Member Engagement, revealed that a whopping 75% of Baby boomers — individuals born between 1946 and 1960 — want to continue working in some capacity beyond the traditional retirement age. Roughly a third, or 33%, of Boomers delay retirement due to fiscal realities. For instance, only 47% of Canadians have access to a group retirement plan through their employer. However, a slight majority, 41%, continue to work because they enjoy what they’re doing, feel healthy and want to stay productive.
The individual, organizational and governmental implications of an aging population are huge. Coade explained, “Half of payroll will be eligible for retirement in the next decade… and Canada’s dependency ratio will rise,” meaning that “more and more retirees will be supported by fewer employees in the workplace.” This is a serious government fiscal health concern. Thus, Coade added, the government is now using certain measures to “incent people to keep working.” For example, there has been a scale change from 65 to 67 for Old Age Security payments. And with the Canada Pension Plan, if you retire between 60 and 65, the amount you receive will be reduced, but for each year after 65, the amount will increase.
Regardless, with increased longevity “current policy and norms [indicate] that it’s okay to be idle for one third to one-quarter of one’s life,” said Taylor. She argued that it’s not okay at the individual level “[in terms of] personal health, wellness and well-being,” at the corporate level, as employers will “miss out on the opportunity of workforce and talent” or even the national level, from a competitive standpoint.
HR professionals facing Boomers’ prolonged work life must also recognize that the old career stages of early career (20s to 40s), mid-career (40s to 60s) and retirement (60 to 75) have given way to the foundation career (20 to 35), mid-career (35 to 50s) and legacy career (50 to 75+). As career timelines have changed, the legacy career has become more prominent as a bridge between the working years and retirement, and is now longer than most people’s foundational career. Taylor noted that this phase is “long enough to learn something new and make a significant change.”
However, Taylor pointed out, “Boomers nearing retirement [too often] languish on the top step of the talent escalatorTM [or career ladder], unsure of where to go; they are waiting for their retirement package, while companies are waiting for them to leave.” At the same time, the younger generation is not attracted to organizations where older workers stagnate at the top, as they don’t feel they would have anywhere to grow within the company; this leads to what Taylor terms “a broken talent escalator.” In the worst cases, the broken talent escalator and corresponding loss of opportunity can lead employees at all levels to absenteeism, decreased productivity or even long-term sick leave from the stress of feeling stuck in their careers.
Boomers add value
As workforce demographics change, letting Boomers remain stagnant is disastrous for any company. Complicating matters is age discrimination. In a corporate culture that values youth, older workers are perceived as being less productive, less open to change and slower at making decisions. However, as Coade mentioned, research shows that older workers tend to be more accurate in their work — they typically do it right the first time; and because of their wealth of knowledge and experience, they make more correct decisions.
Taylor expanded on the notion of older workers adding value with the example of her Boomer client, who was not ready to retire but didn’t want to continue in his accounting job. They discovered that on weekends he managed seven social media accounts for his church. With the help of The Challenge Factory, he was able to parlay his amazing social media skills and in-depth knowledge of his company of 32 years into a part-time role managing that company’s extensive social media network from home. By similarly thinking outside of the box, employers can help Boomers move into a legacy career that is less demanding but still draws on their wealth of knowledge.
Taylor then shared a legacy careers toolkit that works on three levels:
- Strategic alignment: Aligns succession management to onboarding, as well as thinking through the business implications of older workers.
- Manager enablement: Provides managers what they need to support the frontline and have career conversations with people in their 60s. Taylor noted that most managers are not accustomed to discussing career development needs with workers of a certain age.
- Employee engagement: Challenges old career thinking so employees don’t get stuck in the status quo. By providing older workers with the tools to make a career change, whether inside or outside the organization, workplace leaders can foster better employee engagement at all levels.
Taylor added that trailblazers in the evolving workplace must take the following four steps:
- Plan transformation. This involves: (a) incorporating things they already do, like succession planning, onboarding, knowledge management, learning and development, career and performance management into an integrated planning record that accounts for changing demographics; (b) looking at where informal networks fit into this plan; and (c) creating metrics to indicate that they’re getting to where they want to go.
- Know their numbers. Companies must do an audit digging deeper into the hard questions, such as: Are you unionized? What’s your pension arrangement? These kinds of questions will reveal the hard costs and risks associated with different options for employees so HR professionals can sit down with the leadership team and talk about what’s going on with the workforce.
- Work within systems. Taylor gave an example of triads being most effective with mentorship systems. While the old way of mentoring includes one-onone relationships, “the new way recognizes that relationships in groups of three are far stronger than relationships that are one-to-one.” Thus, she recommends grouping three types of workers in a mentoring relationship: (a) someone who is five years from retirement; (b) someone who is mid-career and looking to step into leadership; and (c) a worker just entering the organization. As these individuals align their goals and needs, they can each gain as well as give essential knowledge that might otherwise be lost. Both Taylor and Coade highlighted that when done effectively, mentorship encourages retention, reduces turnover costs, improves productivity and creates excellent professional development opportunities for older and younger employees alike.
- Zoom out. It’s important to understand the broad context of delayed retirement. “If you just focus on the smallest part of the problem, you’ll miss the bigger picture and broader opportunity,” said Taylor. She emphasized the value of implementing a vibrant company alumni network. With an alumni network, people who have left the company can continue to contribute their knowledge to the organization on a consultant basis and provide mentorship to the younger generation. In some workplaces over the next 10 years, there will be more alumni than employees, so an alumni network can be an amazing resource and short-term solution to the broken talent escalator.
How can companies assist mature employees?
A technology company recognized that they weren’t getting the best candidates from on-campus recruitment, so they decided to get rid of their recruitment officers altogether. They then partnered with post-secondary institutions that had great programs and decided that four of their alumni, who were so inclined and had the skill set, would go and teach a class for a semester. While teaching in an area they loved, these former employees could get to know a whole class of students over a semester. Thus, the company didn’t need a career day. These alumni could simply make offers to their most promising students.
Trailblazers must also bear in mind that, as Coade stated, “mature employees provide both opportunities and challenges in the workplace.” Therefore, while facilitating their transition to legacy careers, employers must help older workers mitigate some of the challenges that impede them in the workforce. Coade revealed that approximately 33% of medical leave claims come from older workers, medical costs are up by 50% for this age group, and they take 25% more time off of work. Furthermore, as uncovered in a MaRS report, entitled “Business of Aging”, from ages 40 to 59 and 60 to 79 there’s a significant increase in chronic illness, including heart disease, diabetes and cancer. These illnesses can lead to turnover, loss of critical skills, absenteeism and presenteeism. They might also lead to employers promoting younger employees before they are ready because someone has unexpectedly left the organization. Companies will thus have to have discussions on how to maintain older workers, and better handle the transition of people out of the workplace in a new context.
On the whole, HR professionals and other workplace leaders need to shift their perception of older workers and set strategies in place to allow them to slowly ease out of the workforce while younger workers are slowly easing in. Companies can do the following to assist:
- Provide wider doors to accommodate wheelchairs; offer closer or additional parking, larger computer screens and handrails, among other accommodations.
- Enhance benefits to include critical illness or disability coverage, group protection, wellness programs, on-site gyms and on-site clinics.
- Offer wellness initiatives or relevant workshops, produce a monthly newsletter with health and wellness tips or start a walking club.
- Provide Employee Assistance Program (EAP) services offering legal counsel for estate planning, help with long-term care planning for Boomers with aging parents or dependent children or counselling for the depression and anxiety that may be by-products of retirement or the greater loss of loved ones that older people face.
Flexibility is also a critical solution for employers. Many older employees are looking for part-time or job sharing opportunities. Other flexible HR policies include flex hours, working from home, phased retirement, paid time off, additional vacation time and sabbaticals. Employers can also allow older employees to take their skill set and use it in other parts of business.
These are just some of the options that allow employers to keep the Boomers working so the company can avoid knowledge gaps and workforce shortages. Incorporating the notion of a legacy career into succession planning will allow employers to capture older workers’ essential skills and abilities, enable younger workers to learn from their elders’ experiences, which will improve productivity and help older workers feel valued even as they head toward retirement.
As Taylor and Coade both emphasized, it’s vital for individuals and organizations to start planning the transition into retirement well in advance. That means trailblazing companies will actively search for ways to gain from the talent, skills, expertise, experience, connections and networks of the older generation. Moreover, they will align their strategy to support older workers as they are moving into a new phase of their careers and lives.
Coade concluded, “Taking a look at the big picture, organizations that do a good job at succession planning and talent development will be ahead of the game [in terms of] higher retention rates, higher productivity and higher employee satisfaction. This will create a significant financial and non-financial return. So we need to rethink how we see retirement. We need to see it as a journey, and not [just] a single moment in time.”