Jon Katz
11/28/2007, 04:52 PM
As the baby-boomer generation nears retirement, too many employers are not prepared for the looming consequences. Of course, the most notable drawback from this loss is the struggle to find replacements. But when experienced employees depart they also take with them years of knowledge that’s difficult to replace.
I’ve seen this in my own industry when seasoned writers and editors retire and are replaced by talented but young and less-experienced journalists (I’m including myself in the latter category). The result is a mass exodus of invaluable knowledge that takes years to develop.
According to a recent Ernst & Young survey, employers face economic and productivity challenges in the next five years if they don’t have a retention plan for older workers and transition strategy in place for when they retire.
While human resource managers are taking steps to tackle the challenges presented by an aging workforce, four key findings by the Ernst & Young study reveal that:
Although 44% of HR executives say it would be desirable to have senior management stay beyond the normal retirement age, 60% say current programs are “neutral” in terms of encouraging or discouraging retirement at a certain age.
When it comes to keeping employees on board, 39% agree health care is the main driver in one’s decision to retire, but more than half are considering increasing employee co-pays, which could lead to the loss of talent.
Only 29% of HR executives surveyed say they are considering phased retirement programs, with only 9% having such programs in place.
Fifty-eight percent of HR executives have not or do not know if their company has analyzed their benefit plans and conducted a compliance review to gauge whether employees are receiving accurate benefit amounts.
Analysts cited in the report say employers need to help HR executives understand how certain regulations will impact their benefits and compensation programs to reduce financial risks associated with retirement.
For more suggestions, take a look at AARP’s Best Employers for Workers Over 50 (http://www.aarp.org/money/careers/employerresourcecenter/bestemployers/winners/2007.html) list. For instance, John Deere offers a formal phased retirement program that allows employees to move to part-time hours.
It might be worth thinking about before you let those high wages or salaries go because the knowledge will be leaving with them.
I’ve seen this in my own industry when seasoned writers and editors retire and are replaced by talented but young and less-experienced journalists (I’m including myself in the latter category). The result is a mass exodus of invaluable knowledge that takes years to develop.
According to a recent Ernst & Young survey, employers face economic and productivity challenges in the next five years if they don’t have a retention plan for older workers and transition strategy in place for when they retire.
While human resource managers are taking steps to tackle the challenges presented by an aging workforce, four key findings by the Ernst & Young study reveal that:
Although 44% of HR executives say it would be desirable to have senior management stay beyond the normal retirement age, 60% say current programs are “neutral” in terms of encouraging or discouraging retirement at a certain age.
When it comes to keeping employees on board, 39% agree health care is the main driver in one’s decision to retire, but more than half are considering increasing employee co-pays, which could lead to the loss of talent.
Only 29% of HR executives surveyed say they are considering phased retirement programs, with only 9% having such programs in place.
Fifty-eight percent of HR executives have not or do not know if their company has analyzed their benefit plans and conducted a compliance review to gauge whether employees are receiving accurate benefit amounts.
Analysts cited in the report say employers need to help HR executives understand how certain regulations will impact their benefits and compensation programs to reduce financial risks associated with retirement.
For more suggestions, take a look at AARP’s Best Employers for Workers Over 50 (http://www.aarp.org/money/careers/employerresourcecenter/bestemployers/winners/2007.html) list. For instance, John Deere offers a formal phased retirement program that allows employees to move to part-time hours.
It might be worth thinking about before you let those high wages or salaries go because the knowledge will be leaving with them.