Older Working Americans contemplating retirement today face a very different economic environment than prior cohorts did. Today, they face challenges. While many CEO’s don’t want to lose the experience and loyalty offered by older workers, they envision a phased in retirement for their employees – one that allows you to gradually move from full time to part-time and ultimately say goodbye. The reality is, by 2024, nearly 1 in 4 people in the labor force are projected to be age 55 or over. So why are older workers choosing to remain in the labor force and how can employers maximize the utility of older workers?
In 1994, people ages 55 and older represented only 11.9 percent of the labor force. Older workers today are remaining in the labor force longer than those from previous generations. By 2024, the projected share will be the largest among all age groups. There are several reasons for this:
- Older workers have longer and more healthful lives;
- Changes to retirement plans;
- Increase in social security retirement age; and,
- To keep employer-based health coverage.
According to one study, 60 percent of older workers with careers are moving to what is referred to as a “bridge job” – a short term and/or part-time position. The Early Boomer women, in particular, were more likely than those in previous cohorts to move to a bridge job prior to exiting the labor force completely and both Early Boomer men and women were more likely to leave their career jobs involuntarily, with layoffs being a key factor.
Some companies are beginning to offer flexible work and retirement options as a way to adapt for an aging workforce. A couple of best practices for accommodating older workers can include the following:
- Flexible, half-retirement – employees work part-time while drawing a portion of their retirement funds for full salary and benefits;
- Prioritizing older-worker skills in hiring and promotions;
- Creating new positions or adapting old ones;
- Changing workplace ergonomics
Companies that have made a few of these changes have seen tangible improvements in retention and productivity, organizational culture, and the bottom line. Is your company ready to adapt?