Although many baby boomers report that they plan on working beyond retirement age, employers could face talent issues if they do not plan for these departing employees, according to research by Challenger, Gray & Christmas, an outplacement and career transitioning firm in Chicago.
Simply because more workers expect to remain employed beyond the traditional retirement age of 65 does not mean they will, says John A. Challenger, CEO of Challenger, Gray & Christmas. Nor does it mean that they will stay with their current employer. With the leading edge of the baby boomer generation reaching age 68 in 2014, it is critical that companies understand their exposure to brain drain related to retirement.
The research, which is based on feedback from human resources executives, finds that 20% of respondents say half of their work force is 55 or older. Another 30% of respondents say that age bracket makes up 11-20% of their work force, and 12% of respondents do not track the levels of their near-retirement employees.
In a related study by PNC Financial Services Group Inc., 49% of workers near retirement worked longer than expected to save more, yet 58% of those under age 70 retired soon than anticipated.
The latest data from the Bureau of Labor Statistics job openings and labor turnover survey show that, on average, 366,000 American workers are voluntarily separating from their employers each month due to retirement, disability or death, Challenger says. Workers who do stay in the work force may decide to leave their current employer for a new industry, a new geographic location, to work part-time or volunteer. The point is employers cannot count on their most experienced to stick around based on some national surveys.
To keep up to date on retirement plans, 59% of respondents from the Challenger survey gather that information from department managers while only 6% use employee surveys. For 30% of respondents, no steps are taken to determine retirement readiness.
Among the respondents tracking retirement, just 6% anticipate more than one-tenth of their workers to retire over the next two to three years. Another quarter of respondents say 7-10% of their workers are ready to retire in three years.
With the work force transition, 24% of respondents report that they are very concerned about filling those key positions, and 30% of respondents say they are somewhat concerned with the potential increase in retirements. Still, 35% of respondents say they are not very concerned because of their large employee pools.
Small- to medium-size companies will probably feel the biggest impact of any retirement surge that comes to pass, Challenger says. Their size means that they are less likely to have a deep pipeline of talent to feed into the positions left by retirees. These companies may need to do more to retain their most experienced talent.
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