Retaining Potential Retirees

Incentives to stay

Source: ADP Canada

Sometimes winning isn’t just about age.


With baby boomers retiring in large numbers, concern in the corporate world is growing regarding the loss of experienced employees. How do we slow down the brain drain and keep potential retirees in the workforce while we transition into replacement with the younger generations? The 2008 Recent Retirees Survey conducted by the Employee Benefit Research Institute was undertaken to better understand what employers might have done to encourage workers to postpone their retirement and remain longer with their company.

Why do people retire when they do? Respondents typically retired from employers for one of four reasons: retirement becomes affordable, lack of job satisfaction, a desire for more personal or family time, and/or their own health status.

However, some retirees would have reconsidered staying on if employers had been aware of the following factors discovered by the survey:

People will work longer if asked soon enough.

One of the major findings from the survey is that employers have a narrow window of up to two years in which they may be able to intervene to change retiring workers’ decisions by offering them incentives to remain with the company.

Employers may just need to ask.

Many retirees report they would have been open to an approach from their employer asking them to stay longer with the company. Sixty-one percent say they would have viewed the experience positively. Just 10% indicate they would have reacted negatively to an approach asking them to delay their retirement.

Work incentives vary in appeal.

The survey tested a total of 19 possible incentives that might encourage retiring workers to postpone retirement. Four of these appear especially likely to be successful:

1. Nearly half of retirees (48%) indicate that feeling truly needed for an assignment would have been extremely or very effective in encouraging them to delay their retirement. Moreover, of those ranking this as one of the top two most effective incentives, 72% say it might have prompted them to stay at least two more years with the company.
   
2. Half of the respondents with a defined benefit pension state that receiving a full pension while working part-time would have been effective in delaying their retirement (50%), and almost as many feel this way about receiving a partial pension while working part-time (44%).
   
3. Seven in 10 of those rating each of the top two most effective incentives report they would likely have stayed at least two more years if it had been offered to them (72% for full pension, 71% for partial pension). However, this would necessitate a change
   in federal law, and several other compensation-related incentives may be almost as compelling.
   
4. Thirty-eight percent report that being able to work seasonally or on a contract basis would have been effective in encouraging them to delay retirement. Among those rating this as one of the top two incentives, more than three-quarters (77%) say it might have prompted them to stay two years or more with the company.

It’s clear that, with the right motivators, it’s possible to keep some retiring workers on the payroll, thus enabling younger generations to benefit from their skill and experience during the transitioning years ahead.

More information: Visit the Employee Benefit Research Institute 

Article originally published in Volume 11-1 of Your Workplace magazine