Almost half (49 per cent) of U.S. employers are concerned that employees delaying their retirements will increase benefits costs, according to a new survey by Willis Towers Watson.
The survey, based on responses from almost 150 large employers in the United States, also found 41 per cent of respondents are concerned that delayed retirement will increase salary costs and 37 per cent said it will block promotions for younger employees. The majority (83 per cent) of survey respondents said they have a significant number of employees nearing retirement, but just 53 per cent said they have a good understanding of when employees will retire.
“Many employers say they are not managing the retirement of their older workers effectively,” said Alan Glickstein, managing director of retirement at Willis Towers Watson, in a press release. “With growing numbers of workers either planning to retire or delaying their retirement, the stakes are high. As a result, employers are rethinking how they manage their workers’ retirement patterns and are taking action.”
A majority (80 per cent) of employers said older employees are crucial to their success and 54 per cent said the talent loss due to workers retiring will be more significant than other labour risks in the next five years. Half (50 per cent) of respondents said they anticipate having difficulty finding employees with similar knowledge and skills in the next five years, while 48 per cent said they’re concerned about the loss of knowledge specific to the organization.
The survey also found 66 per cent of employers are offering financial well-being or retirement planning programs aimed at workers approaching retirement, while 19 per cent said they plan to offer these programs next year or are considering them for 2020. More than a third (36 per cent) of respondents said they’ve changed working conditions to meet the needs of older workers and that figure is expected to jump to 43 per cent by 2020.
Almost half (49 per cent) of survey respondents said they allow retired employees currently collecting benefits to work as consultants or contingent workers. Phased retirement programs were less popular, with just nine per cent of employers offering them formally.
“Older workers are a sought-after resource and our research shows there is a definite supply of employees who would like to work into their 60s or beyond,” said Lauren Hoeck, director of retirement at Willis Towers Watson. “Many employers misunderstand their employees’ motivations and circumstances for retiring. Therefore, they do not have a grasp on their likely retirement patterns. We believe employers can effectively draw on the expertise of older workers, and this opportunity will require careful management.”