Employers talk a lot about how to adapt to younger workers, especially the millennials. But how about the older workers, the baby boomers and the middle-aged, who are going to be occupying key jobs in our workplaces for the next 15 to 20 years?
As a story in this week’s IBR explains, Idaho’s workforce is getting older, and that trend is going to continue. By the year 2030, 20 percent of the state’s population will be above the age of 65, according to Kevin Cahill, a project director who studies demographics at ECONorthwest. And many of those people will be working. Where the average retirement age was 63 in 2002, now it’s 66. We’re just living longer, healthier lives these days. Also, the economic turmoil of the past several years has forced many people to keep working past the time they expected to retire.
So, while employers are turning themselves inside out to accommodate younger workers with amenities like ping pong tables, kegs of beer, and dog-friendly offices, they’re also starting to talk about ways to retain their more seasoned workers.
One of these ways is phased retirement. Similar to the flexible time so prized by working parents, phased retirement enables workers to cut back to 30 or even 20 hours a week while retaining their original position. According to Boston College’s Center on Aging & Work, where Cahill is a research economist, employers take the trouble to do this because they want to prevent the loss of institutional knowledge that results when employees retire all at once.
Northwest Lineman College in Meridian, which employs about 100 people in three states, is working on a phased retirement plan now that would extend health care benefits to workers who put in at least 20 hours a week, and also allow them to start withdrawing from their retirement plans.
Healthcare is a barrier to retirement for people under age 65, said Leanna Whitney, the school’s “chief culture officer” and human resources leader.
Whitney said the company offers flexible and part-time work because it enables the college to hold on to workers who have the depth of experience to train other employees. It also makes workers happier if they can take time off to care for family or pursue other activities, she said.
“We are real believers that if employees are happy and engaged, then it’s a benefit to us,” she said. “They’re going to be more productive and more enthusiastic, and their customer service will be better.”
The Center on Aging & Work studied the workforce in 2014 and found that most workers of all ages see retirement as a gradual process, not as something that happens overnight. The expectation of being able to leave the workplace slowly is actually something shared by baby boomers, Generation X (the group that was born after the baby boomers), and the millennials, according to a retirement survey carried out by the Transamerica Center for Retirement Studies.
Yet only about half of all employers nationally offer phased retirement now, such as part-time work or consultancies, according to the group’s research. One of the main reasons for that is the legal and regulatory hurdles that make it difficult to change the distribution of pension benefits.
That’s something the Lineman College is working on right now as well, said Whitney. They’re talking to the administrator of their 401(k) plan now with a goal of having a formal phased retirement policy in place by the beginning of 2017.
Whitney, a baby boomer herself, said her generation tends to have invested a lot in their careers, and they’re proud of what they do. Many see work as part of their identity, and they don’t want to stop contributing their time and talents overnight.
“One of the primary offerings that an employer can provide is flexibility,” she said. “If it’s something that is going to make them happier and more productive during the time they’re here, it’s worth it.”
Anne Wallace Allen is the editor of the Idaho Business Review