Workers and companies facing a new reality
LIFE after 65 is starting to look a lot more like life at .... 64. The percentage of Americans working past the traditional retirement age hit new highs in the most recent jobs numbers, according to recent reports, with 19 per cent of those 65 and older working at least part-time. And it’s only expected to increase: The over-65 set is expected to be the fastest-growing demographic in the workplace by 2024, according to the US Bureau of Labor Statistics.
So what are companies doing to respond? A few have redesigned manufacturing plants to adapt. Some lucky employees are getting higher retirement fund matches to help them save. More recently, many companies have launched financial wellness programs to help employees of all ages make sure they’re better prepared to retire on time.
Meanwhile, one might assume “phased retirement” programs, a benefit begun 15 years ago or so to help employees gradually step away from their jobs, would be hotter than ever, offered to give workers a way to keep working part-time or in alternate arrangements while helping companies hold on to workers with valuable skills.
But the numbers don’t show that. According to WorldatWork, a non-profit human resources association, the percentage of companies that offer the benefit – 29 per cent – dipped slightly in 2017, and growth has stalled over the past six years. The Society of Human Resources Management, whose surveys include more small and mid-size companies,
We haven’t seen a flood of large employers saying we want to have phased retirement programmes lock stock and barrel. We just haven’t seen a huge prevalence. Roselyn Feinsod, a senior partner in Aon Hewitt’s retirement practice
found that the use of formal phased retirement programmes is just six per cent – roughly the same as in recent years – while informal use of the idea has ticked up to just 13 per cent.
“We haven’t seen a flood of large employers saying we want to have phased retirement programmes lock stock and barrel,” said Roselyn Feinsod, a senior partner in Aon Hewitt’s retirement practice. “We just haven’t seen a huge prevalence.”
However, that doesn’t necessarily mean employers are being more stingy about a more gradual retirement. Human resources experts say that instead, companies are offering the option to near-retirees under the broader umbrella of flexible work arrangements – a development that could help older workers in some ways, but possibly hurt if they work for organisations where flexibility isn’t as highly valued.
“If there’s anything employers want, it’s a committed employee,” said Jacquelyn James, codirector of the Center on Aging & Work at Boston College. “They don’t want a sign they’re one foot in and one out the door.”
Phased retirement, human resources experts say, emerged in the early 2000s as companies grew concerned about a Baby Boomer exodus. The programs saw an uptick in popularity around the middle of that decade after regulatory changes helped address questions about how traditional pension benefits would be paid out, said Lenny Sanicola, a senior practice leader at WorldatWork, but then the benefit fell in popularity during the Great Recession, as so many workers felt they could no longer retire.
The prevailing trend now is to include the option in the part-time, job sharing and other flexible arrangements that the employer offers to all workers. “There’s been a levelling off” in offering a distinct benefit, Sanicola said. “I think it’s being done more on an informal basis.”
One upside to this trend for older workers, James said, is that employees won’t have to be as clear about their plans with their boss. “The phased retirement (benefit) has a lot of complications to it,” she said. — WP-Bloomberg