How Are You Dealing with Workers Putting Off Retirement Due to the Recession?
I attended a professional association meeting this morning, and the topic naturally centered around how companies are adjusting to the economic downturn. It seems news of the recession is everywhere in the media lately. A few weeks ago Phil Blount, president and founder of Phillip Blount & Associates, gave a presentation on managing compensation in the current economic climate. With all the focus, I thought it would be an appropriate time to write the first of what will be a series of blog postings on the challenges and opportunities presented by the recession.
One of the major issues that has risen is the conundrum posed by baby boomers who, prior to the onset of the recession, were prepared to retire within a very short time. In some cases, these employees may have already begun flexing down schedules and preparing to exit. Fast forward a few months, and all of the sudden 401(k) and other investments are down 40%. Who is going to retire under that situation? Many of these employees are deciding to stick it out for another three to five years.
This situation has both positive and negative effects for employers. On one hand, the company gets to keep some of its most knowledgeable, highly skilled, and valuable employees. The experience these employees bring to the table is immense, and they have just the kind of problem-solving ability needed to help the organization emerge from the recession. However, many of them are in a situation where rather than working full weeks at their current job, they had planned on working part time or enjoying family and travel during retirement. How do companies re-engage these employees?
Another issue arises around talent management. While the potential retirees had planned moving out of the company, younger employees saw this as an opportunity to expand responsibility, take on larger roles, and move up in the company. Now these employees are stuck in a situation where they are unlikely to move up and displace any of the more experienced workers, and this is compounded by the fact that the recession is already limiting opportunities for advancement. While companies can tell themselves that these younger employees should just be glad they have a job, the reality is that may of them are becoming more disengaged and disheartened about prospects for advancement. These feelings are sure to carry over when the economy does begin to turn, and companies may be in danger of attrition at that time.
So, what are some ideas to battle this lack of engagement from both parties? One approach is to hold Bagels and Business breakfasts or Lunch and Learn meetings. These meetings are designed to help junior to mid-level employees fully understand the business. The thought process is that, while many of these employees may be very good at their current function, they may lack some understanding of how the company or organization functions as a whole. In order to be well prepared for larger roles, they must understand how all of the business processes are integrated to achieve organizational goals. That is where the older, retirement-ready employees play a role. Give them the opportunity to prepare for and present at these meetings. Let them impart their knowledge to the “next generation”. Furthermore, it may be beneficial to set up some kind of mentorship program coming out of these meetings. These are very cost-efficient ways to promote training and development while helping to raise employee engagement across the organization.
So, are these viable ideas? What is your company doing to handle the issue of employees working longer and retiring later?