In 2019 there are a number of factors that affect retirement planning for organisations. The number of people in the UK over 65 rose from 15.9% in 2007 to 18.2% in 2017, and is estimated to reach 20.7% within the next ten years according to the Office of National Statistics (ONS). People are also working for longer; some because they want to, others because of the increased retirement age.
An ageing population means that for most organisations, there is an increasingly large proportion of their workforce approaching retirement age. The question: is your organisation prepared to deal with this group of employees?
In our experience, people are increasingly unwilling to think about retirement planning. Often it’s the case that an individual’s work becomes a large part of their identity; after 40 or more years in work, making the decision to leave that life behind, to move forward into the potential unknowns of retirement, can be daunting. Even the mention of ‘retirement’ can be off-putting for these individuals, and coupled with the slowly increasing pension age, the net result is that individuals often simply ignore the issue of retirement altogether.
For an organisation, this makes it very hard to engage in succession planning. No clear timeline for bringing up fresh talent through the organisation can cause projects and strategic initiatives to stall. If left unchecked, the lack of fresh thinking and new ideas from new employees can reduce your organisation’s ability to evolve and stay competitive. This is especially true when one considers that often it’s the senior leadership in an organisation who are the ones approaching retirement age, complicating succession planning at the most senior echelons of your organisation.
It’s plain that organisations need to help their employees to make the transition to retirement. But this has to be done carefully. If retirement planning isn’t handled correctly, not only will you find that older employees lose their motivation; it could also cause brand damage as those leaving feel ‘forced out’ and speak out about being mistreated or mishandled.
The good news is that there’s a lot the HR function can offer to support employees to create retirement strategies that work for both them and the organisation.
When it comes to preparing for retirement, the key is to help employees reframe their thinking on the subject. Retirement doesn’t have to be ‘the end’ of anything; there are many opportunities after work for individuals, including voluntary work, non-executive director (NED) opportunities, and more. HR can support individuals to carefully consider their options for life after work, helping them to build a plan that energises them and builds enthusiasm for the next phase of their lives.
Organisations can draw on the support of external retirement coaching services to help them prepare their employees for retirement. These providers could offer retirement workshops for groups, or even tailored retirement coaching for high-level individuals or individuals with unique circumstances. A retirement consultant can also work with HR on longer-term workforce planning for the organisation, to ease the pressures bought about by an ageing population and people working for longer. If you can combine these strategies, your organisation will be able to help its employees smoothly transition away from work, improve succession planning, and protect brand reputation.
Connor has years of experience in creating tailored retirement plans for organisations and individuals. If you want help with retirement planning then get in touch on 01491 525 501 or learn more about our retirement planning support on our website.