Consider this scenario: An employee of yours is reaching 65. They have been with the company for decades. You could always count on them through thick and thin, and now they’re going to walk out the door, because as far as they know, that’s the only option they have.
This situation is quite common, but it’s more damaging to organizations than you might think. If you were to do some high-level accounting of assets, you would see that you lose much of your value and institutional intellectual property when your employees retire.
It doesn’t have to be this way. In fact, recruiters and C-suite folks with an eye toward the future should be shaping career paths differently from the beginning, with a focus on supporting employees’ goals. If more companies did that, they would be able to avoid these situations where the people they have groomed and trained for years suddenly disappear,
Laura Carstensen, founding director of the Stanford Center on Longevity, told Quartz that working constantly until you retire “doesn’t work, because it fails to recognize all the other demands on our time. People are working full-time at the same time they’re raising children. You never get a break. You never get to step out. You never get to refresh. …There is no real reason why we need to work this way.”
While it’s true that employee tenure overall is not what it once was — a median of 4.2 years, according to the Bureau of Labor Statistics (BLS) — it tends to be much higher for older workers. The BLS found that more than half of actively working adults aged 60-64 have been working for their current employers for at least 10 years.
What’s more, older adults are the fastest-growing sector of the workforce, also according to the BLS. By 2024, roughly a quarter of the US workforce will be 55 or older. In this climate, succession planning is crucial.
But who should be in charge of the planning, and what should it involve? The short answer is it all starts at the level of the CEO, and this is what it would entail:
1. Revisit Career Modeling to Allow Older Adults to Stay in the Workplace
Get to know the whole person so you can map out ways to keep them active and available. Where possible, remove or adjust age limits or restrictions. Make ergonomic adjustments to the workplace in order to support older workers, as BMW and others have done.
2. Invest in Talented Older Workers Through Reskilling and Retraining
Determine what older workers want/need in their careers, and offer ways for them to obtain those skills. For example, AT&T created an online portal that shows employees what positions are open and what training they would need to qualify for those positions. The company is also taking steps to connect interested employees directly to training resources in order to reskill themselves for these positions.
3. Offer Older Workers Gig and Consulting Work
Full-time, in-house employment is not the only model for work. Gig roles have become increasingly popular, with one poll finding that 20 percent of US workers hold contract roles. Consider offering older workers contract positions to continue leveraging their skills without forcing them into the confines of a full-time job.
4. Create Mentoring Programs for a Multigenerational Workforce
Multigenerational teams may outperform single-generational teams, according to emerging research. You can drive productivity even higher by creating mentoring programs pairing workers of different generations with one another. Under such arrangements, older adults in the workforce can exchange expertise with younger workers, with each party learning new skills and knowledge from the other.
Saving money by reskilling workers you already know and trust makes a lot of sense. According to a report from the Stanford Center on Longevity and the Milken Institute Center for the Future of aging, older workers tend to have better mental health, take fewer sick days, and feel more loyalty toward their employers. Loyalty alone is incredibly valuable, as hiring and training a new employee can cost 6-9 months of their annual salary. When you keep an employee for the long term, you’re making good on that investment.
To keep older workers around for longer, it’s important to offer them a variety of work arrangements that work for them. Contract work, job shares, remote work, flexible hours, and nontraditional employment models can help older workers maintain work/life balance while still brining their expertise to your organization.
Unfortunately, these nontraditional arrangements are still the exception, not the rule. According to SHRM, just 19 percent of companies are offering phased retirement, whether formally or informally.
As the Stanford and Milken report puts it, “Older workers represent a fountain of age — a massive human capital resource, ready to contribute to employers, younger colleagues, and a vibrant economic future.”
It’s high time we take advantage of this resources. Who wouldn’t love to work for a company that knows how to value and leverage employees’ wisdom and experience? It’s good for the bottom line, and it’s good for the individual.
Jeannette McClennan is founder and president of The McClennan Group.