By Claudine Kapel
Many Canadians expect they will need to work past age 65. This is creating both challenges and opportunities, as organizations contend with issues related to staffing, employee engagement and total rewards.
According to a recent survey by Sun Life Financial, 54 per cent of Canadians expect to still be working after age 65. Some 20 per cent expect to be working full time, while 34 per cent feel they’ll be working part time. And on average, they expect to continue working until age 71.
The news isn’t surprising. Many Canadian workers have seen their retirement savings erode in the face of ongoing market turbulence. In fact, 61 per cent of those who anticipate working past age 65 say they will do so out of necessity. This is up from 46 per cent in 2009.
What does this mean for employers? It’s a bit of a good news/bad news story.
On the positive side, many companies are becoming worried about their talent pools, especially as baby boomers start to retire. Delayed retirements will provide some relief, although only temporarily, in terms of access to required talent.
And a recent research study by the Sloan Center on Aging and Work at Boston College found workers over the age of 40 tend to have higher levels of engagement and organizational commitment than their younger counterparts.
But having more employees working past age 65 is not without its challenges and can impact workforce dynamics. These older workers may be looking for a different type of work arrangement, such as the opportunity to work part-time so they can take a more phased approach to retirement.
At the same time, delayed retirements could become a source of frustration to younger workers, who may see this development as stalling their own opportunities for career progression.
If your organization expects more employees will be retiring later, a well-crafted strategy can help you facilitate a smoother transition process. Here are some potential action steps.
- Develop or confirm an approach to facilitating phased retirements so there is clarity around what support, if any, the organization will provide to employees who want to work fewer hours in their final working years. It is possible some jobs may lend themselves more readily to phased retirement arrangements than others.
- Review the organization’s approach to employee development with an eye to optimizing growth opportunities. Consider a multi-faceted approach that encourages lateral moves and other types of development plans, so the emphasis isn’t on upward progression only.
- Ensure employees considering working past age 65 understand what this may mean to their benefits coverage or other total rewards elements, as applicable. For example, the terms of your benefits plan may reduce the life insurance coverage for employees over the age of 65.
- Update succession plans to address later retirements, especially in cases where employees are remaining in a full-time capacity. Ensure the plans address transition arrangements so existing incumbents can transfer knowledge and relationships to their replacements before they retire.
Working past age 65 may be the new normal for individuals who want to shore up their retirement income. Proactive organizations will be able to navigate changing work force realities with greater ease.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.