Chalk it up to poor planning.
The vast majority of employers have a significant number of employees at or nearing retirement, but only half have a good understanding of when their employees will retire.
Additionally, while eight in 10 employers say managing the timing of their employees’ retirements is an important business issue, only 25 percent do it effectively.
A Willis Towers Watson survey finds 80 percent of respondents view older employees as crucial to their success.
Not surprisingly, employers are concerned with the expected loss of talent. In fact, over half believe the loss of talent due to retiring workers will be more significant than other labor market risks over the next five years.
Additionally, 50 percent expect difficulty finding workers with similar knowledge and skills over the next five years; 48 percent worry about the loss of organization-specific knowledge.
“Many employers say they are not managing the retirement of their older workers effectively,” Alan Glickstein, managing director of retirement at Willis Towers Watson, said in a statement. “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.”
The research found employers are also concerned over workers delaying retirements. Almost half (49 percent) expressed concern that delayed retirements will increase benefit costs over the next five years, while 41 percent are concerned they will increase wage and salary costs. Almost four in 10 worry that workers who stay on the job past normal retirement will block promotions for younger employees.
Indeed, according to the survey, a majority of employers either have adopted or plan to adopt one or more of the following strategies over the next few years:
- Wellbeing enhancements
- Flexible employment
- Consulting arrangements
- Phased retirement
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
