Ask six different people when they want to retire, and chances are you’ll get six different answers.
If you’re a business owner with an aging workforce, the answer to that question can have big implications. While business owners might have given thought to their own retirement plans, they need to devote just as much time to planning for when their employees retire.
The traditional retirement age of 65 has long been the target plugged into retirement calculators across the country. According to Northwestern Mutual’s latest Planning and Progress Survey, the reality is a bit different. There’s a noticeable gap in the age pre-retirees believe they will retire at and the age they actually do.
On average, pre-retirees say they will retire at age 68. Yet, the mean age of retirement among those already retired is 59. For business owners, that means your employees nearing retirement age might be retiring sooner than you — and they — expect. As a business owner, the time to start planning for employee retirement is now.
Your employees, especially long-term ones, not only keep your business running smoothly, but they also give you a key competitive advantage. Their many years of experience, strong relationships with clients and business partners and in-depth knowledge of your business make retaining them all the more important.
Here are a few ways you can retain your top talent by making work as enjoyable as that early morning tee time … well, almost.
• Give a little, get a lot: Allowing your older employees to work from home or part-time (with or without benefits) gives them the flexibility they want while helping you keep your top performers for a few more years.
• Old school meets new school: How your company does business might have changed drastically over the years. Even your top talent might require training in new skills. Providing older employees the training they need can remove obstacles in their way and help them continue working.
• It’s all about the perks: Rewarding your key employees with exclusive benefits demonstrates your understanding of how valuable they are to your company’s success. A financial expert can help you develop a plan to enhance your benefits program, helping you protect, reward and retain your most talented team members.
We all want to retire someday. Retirement is referred to as our “golden years,” after all. Eventually, your older employees will leave your organization. All business owners need to have a plan in place to pass along retirees’ knowledge and be prepared for a potential labor shortage.
You should have a formal succession plan and programs to retain the valuable knowledge of your older employees to ensure the continuity of your business.
• Identify key employees: For starters, determine the employees whose knowledge and experience is essential to your business.
• Job shadowing: Once you’ve identified your key employees approaching retirement, consider assigning another employee to job shadow them and learn some of the secrets to their success.
• Give words to thoughts: At this point, for a few of your employees, some duties might be as natural as a reflex. Consider having them write up job processes and workflows as well as list out key contacts and the location of vital documents.
Also, as your older employees retire, you might not be able to hire a replacement immediately. Business owners should prepare for the potential labor shortage. One solution might be to make an investment to improve your technology. It might also be an ideal time to review your current employees’ duties and see how your business might be able to operate more efficiently.
While nothing can replace the contribution of your key employees, one way to help retain them and prepare for their eventual retirement is to establish a mentoring program. Pairing up younger employees with more experienced ones in your workforce holds countless benefits.
Experienced employees can provide younger workers with valuable insight into your organization and introduce them to key business partners. Younger employees also bring fresh insight to the table and could introduce older employees to new technology that makes certain tasks more efficient.
The workforce is more diverse than ever. Mentoring programs bring your employees together, build teamwork and help them share ideas.
While you might not be able to predict when your employees will retire, you can plan for it. So when they do, your biggest concern will be throwing them the perfect party at the office.
Kevin Kaveney is the managing director of Northwestern Mutual in Colorado Springs. Contact him at 636-3844.