A lot of emphasis has been put on “The Great Resignation” and its impact on the workforce. Businesses are seeing employees leave in record numbers as they go in search of jobs that they feel offer more benefits or provide greater personal satisfaction.
Yet, what many companies are failing to realize is that there is another looming threat to retaining an adequate level of employees. It is called retirement.
2022 retirement by the numbers
Data provided by the Federal Reserve Bank of St. Louis indicates that the number of people aged 65 and up who are retiring has increased dramatically, growing 7% between January 2020 and October 2021. This represents more than 3.3 million new retirees in this time frame, with the largest growth occurring in people aged 65 to 74.
A survey conducted by Pew Research Center adds that just over half of U.S. adults aged 55 and older (50.3%) were retired as of September 2021. This is a 2% increase over pre-pandemic rates just two years before.
The age at which people decide to retire appears to change based on where they live. States with the lowest average retirement age are Alaska and West Virginia at 61 years according to GOBankingRates. The District of Columbia has the highest average retirement age at 67 years. This is followed by Hawaii, Massachusetts, and South Dakota—all of which have an average age of retirement of 66 years.
That said, some statistics suggest that people are hoping to begin retiring earlier. According to a 2021 Gallup poll, many of those who are still working are hoping to leave the workforce by the age of 64, representing the lowest expected retirement age since 2002. In the last decade, this age-related goal ranged from 65 to 66.
What this means for businesses
The more employees you have that retire, the fewer bodies you have to do the work. The fewer bodies you have to do the work, the lower your ability to retain current productivity and output levels.
Certainly, you can hire new employees to fill the retirement-created gap. However, this takes time. A study conducted by LinkedIn reveals that the amount of time this takes can depend, in part, on which industry the position is within.
Administrative positions appear to fair the best with a median time-to-hire of 33 days. Conversely, job openings in engineering seem to take the longest to fill at roughly 49 days. Other positions with greater time-to-hire lengths include those related to research (48 days), project management (47 days), and business development or finance (both at 46 days).
Plus, when someone retires, not only do businesses lose a physical body to perform the needed work, but they also lose the wealth of knowledge and experience that person is taking with them. This information can be difficult to replace. Not that newer or younger workers are subpar, because they’re not.
It’s just that many workplace skills take time to build and an advanced level of experience also increases a worker’s ability to problem-solve. The more they’ve seen in the workplace, the greater their ability to draw upon what has worked in the past (and, subsequently, what has not worked) when it comes to processes, workflows, and even equipment.
How to ease the increase in employee retirements
While you can’t stop employees from retiring, there are a couple of things you can do to ease the impact on your company. One is to create an exit program whereby employees who plan to retire in the next year are paired up with newer employees, giving them the ability to share their knowledge—leaving more of it with the company versus taking it all with them.
Another option is to ask key employees to create workflows of their job duties before they go. This gives the next generation of workers a play-by-play of the steps needed to perform their functions effectively and efficiently. It also provides for a smoother transition to a younger, perhaps less-experienced workforce.
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About the AuthorVisit Website More Content by Christina DeBusk