A new report from LIMRA Secure Retirement Institute (LIMRA SRI) finds potential trouble on the horizon for employers as a bulk of the current workforce approaches retirement age.
To deal with the situation, the report recommends incentivizing older employees to work later in life—a surprising contention given recent research that spells out the ways in which delayed retirements can cost companies.
A recent study by Prudential, for example, argues that “employees who are not able to retire when they wish may experience financial stress, a lack of engagement and lower productivity,” in addition to “reducing the inflow of new ideas and talent, and resulting in higher turnover amongst younger employees due to the lack of advancement opportunities.”
From LIMRA SRI’s standpoint, however, companies may face a shortage of “talented and experienced workers” in the coming years, as one in three American workers is age 50 or older.
“As employers continue to grapple with managing an aging workforce and all its implications, considering options to keep talented people is a worthwhile strategy,” the report explains. “Research shows that if employers start using incentives, more employees are likely to stay working.”
LIMRA surveyed nearly 1,000 Americans this January to find out what would motivate workers to stay on the job longer.
The study, Selecting the Right Carrots: How Employers Can Incent Employees to Delay Retirement, revealed:
- Permission to work outside the office was most valued and could result in employees working an average of 15 years longer
- Agreeing to flexible hours and offering financial rewards were the next most valued and could result in employees working an average of 13 years longer
- Allowing for part-time or consulting-based employment was also highly valued and could result in employees working an average of 12 years longer
According to the report, retaining older employees “not only helps the employer, it can bolster employees’ financial security when they finally do decide to retire.”
For instance, “retirement delays of as little as three to six months have the same impact on standards of living in retirement as saving an additional 1 percentage point of income over 30 years,” the report concludes.