Retirement looks a lot like work today. Studies, surveys and individual behaviors indicate that the next wave of retirees will be reporting for work longer than they or their employers may have planned. While there are significant questions that individuals and families must answer to reconcile the need to work longer with the capacity to work longer, business may have even bigger challenges ahead.
A recent AP-NORC survey provides statistical fodder and insights on the trend of working beyond traditional retirement age. The survey reveals that more than 80% of workers 50-plus believe it is ‘somewhat likely’ they will work in retirement. Since the 1990s people 50 years old and older have been staying in the workforce longer. Research at the MIT AgeLab reveals that the majority of Americans asked to name two things “you will be doing after age 65?” the #1 response is – work. (Notice we did not use the ‘r’ word in the question). A few years back AARP surveyed older boomers about their current behaviors and future retirement intentions – nearly 40% reported that they plan “to work until they drop.” Older adults are now the fastest-growing segment of the American workforce - adults 55 years old and older will comprise one in four of the civilian labor force by 2020. Older baby boomers staying on the job longer, Gen X in midlife and Gen Y coming online – welcome to the three-generation workplace – is business ready?
Here are five questions that business leaders must ask:
How will my firm manage and inspire three generations of workers?
Every generation thinks they are different and unique. Education, experience and even attitude give each generation their own flair as well as characteristics that confound generations in front and behind them. Older baby boomers are known for focused agendas and a penchant for manufacturing endless meetings as means of ‘getting things done.’ Gen X, more technologically collaborative than the boomers, have perfected working at home, working remotely and working as DIY contributors. While still a work in progress, Generation Y or the Millennials appear to like less formality and hierarchy than previous generations. They are more likely to see chance encounters and a juice break in the office as a means to stimulate relationships and innovation. Perhaps more collaborative and likely to use every mode of technology to stay connected with colleagues they see formal hierarchy as a barrier not as an organizational strategy for accountability. How will companies be managed on a daily basis? What will the training be for younger and older managers that must motivate three generations of workers who have become accustom to different styles of work, collaboration and accountability?
Can our work environment accommodate the flexibility desired by younger and older workers?
The idea of the flexible workplace is not new. Work family balance discussions have been around for decades. However flexibility may be even more important as childcare and eldercare now compete for employee time and attention. Moreover, how much work is enough? Surveys suggest that Millennials may want to work to live, not live to work. Older adults may want to work for income and meaning – but only a few days a week or for a few hours five days a week. With multiple needs and values how will work hours and employer expectations need to be reorganized?
What is the optimal mix of benefits to respond to both the needs of current employees while attracting the next generation of workers?
The soaring costs of benefits from health to retirement are a major concern for all employers. Yet, the varying states of well-being of a three generation workforce presents incredible diversity in the costs of benefits. Life stage changes affect emotional health. Middle-aged employees tend to report lower states of happiness and are more likely to be ‘stressed’ as they are often working full-time and responsible for both children and elderly parents. Chronic disease becomes a greater cause of presenteeism and absenteeism in employees over age 40. In some industries, injury and related disability costs may become problematic. For example, younger people in manufacturing or construction are often more likely to be injured on the job but return to work in due time. Older workers, perhaps due to years of experience, are less likely to be involved in an accident but due to chronic conditions, natural aging and the severity of an injury may be unable to work for an extended expensive period.
Does my firm know what we know?
Sounds rhetorical, but the fact is many firms do not have adequate knowledge management processes and systems to capture the knowledge that makes their business work. Giving older workers a ‘package’ to retire may save on heavy benefits costs and salaries but as they walk out the door are they taking with them critical client relationships? Does anyone really remember how or why a particular project or operation was designed a certain way? How might cross-generational mentoring, formal knowledge management systems and training programs ensure that knowledge is developed, shared and maintained with three generations of workers?
How will my company facilitate transition to life after full-time work?
Eventually we will ‘retire.’ Even if the meaning of retirement is evolving there will be the need for employee engagement strategies to ensure that they are saving and adequately financing life after work. Moreover, providing a vision and the steps to transition into retirement with the security and confidence necessary to punch out one last time is likely to remain an employer provided benefit.
The disruptive demographics of a multigenerational workforce are set to change the workplace. Employers who take new approaches to management, offer a flexible benefits mix and provide effective employee retirement planning strategies will benefit from a three-generation workforce that is engaged, energized and experienced.
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