Why You Need an Exit Strategy

If you’re like most companies in NH, a significant portion of your employees are baby boomers as the state’s (and the nation’s) workforce is increasingly skewing older. In fact, the NH Center for Public Policy predicts by 2020, the state’s shift to an older population will reach its peak, and by 2030, the “silver tsunami” of Granite State residents over the age of 65 will reach nearly half a million, or almost one-third of the population.

In fact, you’ve most likely already experienced the loss of experienced workers since the beginning of the boomer retirement wave six years ago. The U.S. Census Bureau calculates that 10,000 retire every day. That means by 2020, 55.9 million people in the United States will be age 65 or older, and by 2030, that number will reach 72.7 million.

As baby boomers retire, they are defining this next phase of their lives differently than how we’ve traditionally defined retirement. A report from the nonprofit Transamerica Center for Retirement Studies (TCRS), titled “Baby Boomer Workers are Revolutionizing Retirement: Are They and Their Employers Ready?,” examines the retirement vision among Baby Boomers and the level of involvement among employers to facilitate their transitioning into retirement.

Boomers “are forging a new model of retirement that is a radical departure from that of previous generations,” says Catherine Collinson, president of TCRS. “In doing so, they are overturning long-standing assumptions about working until age 65, calling for dramatic changes in current employment practices, and proving that retirement and working are not mutually exclusive.” Additionally, nearly half the boomers still working say they don’t expect to retire until they are 66 or older, including one in 10 who predict they will never retire.

What Does This Mean?
We know as significant numbers of baby boomers seek retirement, businesses will be severely affected, especially those that continue policies that don’t consider rapidly changing demographics. Many will find their competitive edge evaporate as large numbers of experienced workers walk out the door.

Others will be concerned about ensuring younger workers have a professional development path forward that is not blocked by older employees. It’s key to understand that while many baby boomers are contemplating full retirement and a completely new life post-career, others will want to keep work in the picture. The most successful companies will be those who anticipate the impact it will have on business, develop responsive practices to increase engagement of an aging workforce and retain valuable talent through flexible work arrangements.

There are measures you can take that will put you ahead of the “silver tsunami” and propel you forward.

• Create a mentoring program. Whether your boomers want to go or stay, creating succession plans and the orderly transfer of knowledge are key components in helping organizations prepare and effectively manage their aging workforces. Mentoring is an organic way of patching experience gaps, providing role models and cultivating an environment for creating leaders.

• Offer a flexible and phased transition into retirement. Put the emphasis on “transition,” not an abrupt exit. Employers can do much more to accommodate older workers who aren’t quite ready for full retirement but would benefit from scaling back. This vision of a flexible, phased transition to retirement needs to be carefully planned with employers adopting the needed programs and employment practices. By doing so, they not only support their employees’ needs for flexibility and retiring on their own terms, they can be more strategic with regard to engagement and productivity, project management, succession and continuity planning, and training and mentoring.

• Implement programs to support wellness and retirement. The standard conversation about benefits such as pensions and health insurance can only go so far. Pre-retirees are under considerable stress. Fears tied to retirement and a major life transition can actually aggravate existing health conditions, bringing on new medical concerns as well as resulting in decreased productivity, all of which is costly for workers and their employer.

By anticipating these factors and offering pre-retirement programs that focus both on wellness and taking charge of navigating and designing their next life chapter, companies can give their employees a needed sense of empowerment and well-being. Training and coaching programs to address the factors in a successful retirement transition can also increase overall company morale by modeling a caring and supportive culture through change.

What do successful retirement strategies look like in practice? “Helping employees prepare for retirement needs to happen years before they actually do so. In our organization, human resources plans a ‘retirement series’ every two years, which includes topics like Social Security/Medicare, financial planning as it relates to the company retirement plan, and psychological and emotional preparation in transitioning out of the workforce,” says Connie Roy-Czyzowski, vice president of human resources at Northeast Delta Dental in Concord. “This year we had a special panel discussion with a few retirees from the last few years who returned to NEDD to share how retirement has worked out for them, offer advice based on their own financial preparation and answer participants’ questions. This series is our gift to employees thinking and planning ahead for the day they’ll happily move into a new phase of life.”

Creating programs that actively support prized contributors’ need to transition while you sustain your company’s culture and mission is doing the smart thing for both.

Sandy Demarest is president of Demarest Directions and is an experienced professional coach and trainer. She can be reached at 603-801-6689 or sandy@demarestdirections.com.