Administration May 1, 2024
Retaining Skilled Experts Requires Employer Flexibility
Implementing a phased approach to retirement and transitioning workers in a ‘flex-tirement’ paradigm helps employers to remain competitive and keep down hiring costs.
Reported by Noah Zuss
Employers are keeping their skilled experts on staff, preparing for massive turnover and the loss or transfer of institutional knowledge with innovative approaches, reflecting significant demographic changes.
Employers are tackling retention challenges in part by providing employees with a transition approach to retirement that involves employees continuing to contribute to their retirement plan, continuing employees’ health insurance until age 65, enabling flexible and hybrid work schedules, and cross-training employees in certain, distinct roles.
In 2024, the U.S. population entered the first Peak 65 year when more than 11,000 Baby Boomers will turn 65 every day, finds the Peak 65 Economic Impact Study from the Alliance for Lifetime Income.
“Many companies are nervous about a lot of traditional knowledge and experience walking out the door in large volumes,” explains Heather Tinsley-Fix, senior adviser, employer engagement at AARP. “Between 2024 and 2027, [more than 4 million] Baby Boomers turn 65 each year, and that’s a typical common age for retirement, so I think companies are nervous about just the volume of people leaving.”
Totaling about 11 million, the older workforce has almost quadrupled in size since the mid-1980s, found research by the Pew Research Center, published in 2023. Adults ages 65 and older are projected to be 8.6% of the labor force in 2032, up from 6.6% in 2022; and older adults are projected to account for 57% of labor force growth over the period.
Employers have developed focused strategies to retain older workers.
“The best way to leverage older workers is to continue to employ them, to give them flexible options to stay with you, and to develop age-inclusive policies and practices, like providing support for working family caregivers, providing health and financial benefits, making sure that you have learning and development opportunities that apply to everybody [and] making sure that older workers are treated the same as everyone else,” explains Tinsley-Fix.
Sponsors, as employers, must tackle their own challenges with regards to recruiting, hiring and training personnel to work in human resources and benefits. For employers, regarding sponsor-specific roles in HR and across positions, generally there is an “acknowledgement that because the workforce is graying in such large numbers because there are fewer babies being born to enter the labor force,” says Tinsley-Fix. Companies are realizing “that they need to have these kinds of talent management strategies and a very deliberate offboarding process and approach as well as a process to welcome people back in, like return-ships and things like that. So, they know it’s important.”
A 2023 study by business management consultant Bain & Company finds 25% of the workforce will be over 55 by 2031; representing a near 10% increase from 2011; and approximately 150 million jobs will be done by older employees, the data shows.
For employers, remaining competitive requires retaining the institutional knowledge of older workers because hiring is costly, explains Frances Brown, director of retirement and policy at Lumen Technologies, Inc.
“We’re always preparing for that, cross training and having people move roles or rotate through roles,” says Brown.
The Monroe, Louisiana- based telecommunications company taps specific techniques, “making sure there’s always a backup or somebody that knows the same [skills] as somebody else—that’s been our philosophy and how we manage,” the graying of the workforce.
For employers, retaining their institutional knowledge is vital, explains Brown.
With Lumen’s approach, “you [are able to] keep that knowledge, and then transition it,” adds Brown. “Hiring someone take can take months to do, so if we can do this and find somebody who will take over that position—you don’t have that [employment] gap. For Lumen, there’s costs in hiring, versus somebody remaining in that role, so it helps us.”
In 2020, U.S. Census Bureau data found the 65-and-older population grew by more than one-third (34.2%) or 13,787,044 in the 10 years between 2010 and 2020, by 3.2% (1,688,924) from 2018 to 2019 and the population increase has contributed to a rise in the national median age from 37.2 years in 2010 to 38.4 in 2019, according to the Census Bureau’s 2019 Population Estimates.
“For employers, they’ve got to figure out flexible ways to retain their older workforce, and some of them are not set up to do that,” adds Tinsley-Fix. “There’s lots of different ways that companies can flexibly retain those folks.”
Bolstering employee benefits is another method employers are using to prepare.
In 2023, Delta Air Lines launched an emergency savings program.
Delta does not “necessarily go out and tout the emergency savings program over other aspects of our employee [benefits] program, but I do think it’s an incredible retention tool, and not just because Delta provides this program and gets a $1,000 bonus into it,” explains Josh Jessup, general manager of global retirement and financial wellness at Delta Air Lines.
“It’s a piece of the puzzle,” to both retain older workers and attract new hires of all ages, he adds.
The “most common” method employers have used is have employees “work fewer days per week,” adds Tinsley-Fix. “You can work four days a week or three days a week and you’ll have a commensurate drop in pay, but you’ll keep some key benefits.”
Lumen employees can work flexible schedules, says Brown.
On Brown’s team, for example, “some [employees] work four days a week and some work three to four-and-a-half days a week, and then their hours are flexible,” she says.
“[It] allows for people to have a little bit more balance in their life and do other things that they want to do,” explains Brown.
Supporting their employees’ work-life balance is helping Lumen to establish a culture that “has really been good to keep people around,” she adds. “It’s this thing that’s not any kind of monetary benefit, but it’s more of a work-life balance benefit that people love.”
Key benefits employers may utilize include:
Tinsley-Fix notes, “being able to retain health coverage,” is important, at least until age 65.
“After 65 when you do qualify for Medicare, then it becomes a little less important but in that crucial 10-year period [from] 55 to 65 it’s really, really important for companies if they’re offering phased retirement to include health coverage in that and to dictate if it’s [available to people working] 20 hours or 30 hours, whatever the threshold is that you need to maintain to keep those benefits [is key],” she explains.
In addition to parental leave, emerging employee benefits include grand-ternity leave, explains Cyrus Bamji, chief strategy and communications officer at the Alliance for Lifetime Income.
“Caregiving is such a big issue, for everybody out there, especially women,” he says. “Cisco [Systems] for example, I know, gives three days … of paid time off for a [new] grandparent.”
Retirement plan sponsors should also offer their participants “protected income and annuity solutions,” he adds. “There’s no doubt there’s data to show that, number one, employees need it and want it in their plans.”
With the employer’s organization the domain of the retirement and other benefits of the plan sponsors could be empowered to a greater degree, he adds.
“HR departments very often don’t even have as much decision-making and control these days on these types of things,” he says. “They’re made by committees at a higher level and or at the CFO level, which I get, and I understand for liability reasons and so on and so forth, but I think it all just kind of snowballs to—rather than looking at what’s best for our employees, what products, what services, what benefits are best—these folks, so many of them are just there to execute on a benefit versus actually develop strategies long-term. The appreciation for your HR departments and the skills that some of those folks have just needs to improve. You need to be able to trust some of those folks more.”
Pursuing a flexible approach to retirement will require employers to amend their plans and other benefits. Keeping their skilled experts may require employers to allow workers to remain enrolled in the retirement savings program and continue to make retirement contributions as well, explains Neil Costa, founder and CEO of HireClix, a digital recruitment marketing firm based in Gloucester, Massachusetts.
“Not everybody [wants to draw down assets], if they’re still interested in working, they’re not ready to withdraw, from the retirement plan, and I think they may even have more discretionary income to put away into retirement,” Costa says.
“Many companies focus their flexible retirement options, targeting them towards the employees who have the most specialized skills or who have a ton of experience,” adds Tinsley-Fix. “In sales, for example, or in legal or compliance departments, there’s a lot of focus on those people who have a deep base of knowledge, and they don’t want to lose that knowledge or that skill set.”
Employers are tackling retention challenges in part by providing employees with a transition approach to retirement that involves employees continuing to contribute to their retirement plan, continuing employees’ health insurance until age 65, enabling flexible and hybrid work schedules, and cross-training employees in certain, distinct roles.
In 2024, the U.S. population entered the first Peak 65 year when more than 11,000 Baby Boomers will turn 65 every day, finds the Peak 65 Economic Impact Study from the Alliance for Lifetime Income.
“Many companies are nervous about a lot of traditional knowledge and experience walking out the door in large volumes,” explains Heather Tinsley-Fix, senior adviser, employer engagement at AARP. “Between 2024 and 2027, [more than 4 million] Baby Boomers turn 65 each year, and that’s a typical common age for retirement, so I think companies are nervous about just the volume of people leaving.”
Totaling about 11 million, the older workforce has almost quadrupled in size since the mid-1980s, found research by the Pew Research Center, published in 2023. Adults ages 65 and older are projected to be 8.6% of the labor force in 2032, up from 6.6% in 2022; and older adults are projected to account for 57% of labor force growth over the period.
Employers have developed focused strategies to retain older workers.
“The best way to leverage older workers is to continue to employ them, to give them flexible options to stay with you, and to develop age-inclusive policies and practices, like providing support for working family caregivers, providing health and financial benefits, making sure that you have learning and development opportunities that apply to everybody [and] making sure that older workers are treated the same as everyone else,” explains Tinsley-Fix.
Sponsors, as employers, must tackle their own challenges with regards to recruiting, hiring and training personnel to work in human resources and benefits. For employers, regarding sponsor-specific roles in HR and across positions, generally there is an “acknowledgement that because the workforce is graying in such large numbers because there are fewer babies being born to enter the labor force,” says Tinsley-Fix. Companies are realizing “that they need to have these kinds of talent management strategies and a very deliberate offboarding process and approach as well as a process to welcome people back in, like return-ships and things like that. So, they know it’s important.”
Employers Preparing
A 2023 study by business management consultant Bain & Company finds 25% of the workforce will be over 55 by 2031; representing a near 10% increase from 2011; and approximately 150 million jobs will be done by older employees, the data shows.
For employers, remaining competitive requires retaining the institutional knowledge of older workers because hiring is costly, explains Frances Brown, director of retirement and policy at Lumen Technologies, Inc.
“We’re always preparing for that, cross training and having people move roles or rotate through roles,” says Brown.
The Monroe, Louisiana- based telecommunications company taps specific techniques, “making sure there’s always a backup or somebody that knows the same [skills] as somebody else—that’s been our philosophy and how we manage,” the graying of the workforce.
For employers, retaining their institutional knowledge is vital, explains Brown.
With Lumen’s approach, “you [are able to] keep that knowledge, and then transition it,” adds Brown. “Hiring someone take can take months to do, so if we can do this and find somebody who will take over that position—you don’t have that [employment] gap. For Lumen, there’s costs in hiring, versus somebody remaining in that role, so it helps us.”
In 2020, U.S. Census Bureau data found the 65-and-older population grew by more than one-third (34.2%) or 13,787,044 in the 10 years between 2010 and 2020, by 3.2% (1,688,924) from 2018 to 2019 and the population increase has contributed to a rise in the national median age from 37.2 years in 2010 to 38.4 in 2019, according to the Census Bureau’s 2019 Population Estimates.
“For employers, they’ve got to figure out flexible ways to retain their older workforce, and some of them are not set up to do that,” adds Tinsley-Fix. “There’s lots of different ways that companies can flexibly retain those folks.”
Retaining With Benefits
Bolstering employee benefits is another method employers are using to prepare.
In 2023, Delta Air Lines launched an emergency savings program.
Delta does not “necessarily go out and tout the emergency savings program over other aspects of our employee [benefits] program, but I do think it’s an incredible retention tool, and not just because Delta provides this program and gets a $1,000 bonus into it,” explains Josh Jessup, general manager of global retirement and financial wellness at Delta Air Lines.
“It’s a piece of the puzzle,” to both retain older workers and attract new hires of all ages, he adds.
The “most common” method employers have used is have employees “work fewer days per week,” adds Tinsley-Fix. “You can work four days a week or three days a week and you’ll have a commensurate drop in pay, but you’ll keep some key benefits.”
Lumen employees can work flexible schedules, says Brown.
On Brown’s team, for example, “some [employees] work four days a week and some work three to four-and-a-half days a week, and then their hours are flexible,” she says.
“[It] allows for people to have a little bit more balance in their life and do other things that they want to do,” explains Brown.
Supporting their employees’ work-life balance is helping Lumen to establish a culture that “has really been good to keep people around,” she adds. “It’s this thing that’s not any kind of monetary benefit, but it’s more of a work-life balance benefit that people love.”
Key benefits employers may utilize include:
- Flexible work hours
- Hybrid work programs
- Arrangements to phase into retirement over one year
- Providing practical mentorships to retain older workers
- Upskilling
- Offering in-retirement-plan protected retirement income options and annuity products
- Offering employees the option to retain their health coverage until age 65; and
- Providing family leave policies for parents and grandparents.
Tinsley-Fix notes, “being able to retain health coverage,” is important, at least until age 65.
“After 65 when you do qualify for Medicare, then it becomes a little less important but in that crucial 10-year period [from] 55 to 65 it’s really, really important for companies if they’re offering phased retirement to include health coverage in that and to dictate if it’s [available to people working] 20 hours or 30 hours, whatever the threshold is that you need to maintain to keep those benefits [is key],” she explains.
In addition to parental leave, emerging employee benefits include grand-ternity leave, explains Cyrus Bamji, chief strategy and communications officer at the Alliance for Lifetime Income.
“Caregiving is such a big issue, for everybody out there, especially women,” he says. “Cisco [Systems] for example, I know, gives three days … of paid time off for a [new] grandparent.”
Retirement plan sponsors should also offer their participants “protected income and annuity solutions,” he adds. “There’s no doubt there’s data to show that, number one, employees need it and want it in their plans.”
With the employer’s organization the domain of the retirement and other benefits of the plan sponsors could be empowered to a greater degree, he adds.
“HR departments very often don’t even have as much decision-making and control these days on these types of things,” he says. “They’re made by committees at a higher level and or at the CFO level, which I get, and I understand for liability reasons and so on and so forth, but I think it all just kind of snowballs to—rather than looking at what’s best for our employees, what products, what services, what benefits are best—these folks, so many of them are just there to execute on a benefit versus actually develop strategies long-term. The appreciation for your HR departments and the skills that some of those folks have just needs to improve. You need to be able to trust some of those folks more.”
Flex-tirement?
Pursuing a flexible approach to retirement will require employers to amend their plans and other benefits. Keeping their skilled experts may require employers to allow workers to remain enrolled in the retirement savings program and continue to make retirement contributions as well, explains Neil Costa, founder and CEO of HireClix, a digital recruitment marketing firm based in Gloucester, Massachusetts.
“Not everybody [wants to draw down assets], if they’re still interested in working, they’re not ready to withdraw, from the retirement plan, and I think they may even have more discretionary income to put away into retirement,” Costa says.
“Many companies focus their flexible retirement options, targeting them towards the employees who have the most specialized skills or who have a ton of experience,” adds Tinsley-Fix. “In sales, for example, or in legal or compliance departments, there’s a lot of focus on those people who have a deep base of knowledge, and they don’t want to lose that knowledge or that skill set.”
