The story of the Great Resignation was that the pandemic allowed people to pause long enough to discover the meaning of life. The extra hours of sleep and joy-filled family meals led them to dream of quitting their current jobs to find purpose and passion at work. I wish. Surveys made headlines announcing that 40% of workers planned to quit—soon. Proof was the massive 4.3 million Americans leaving their jobs this past August—a record since records began. But is it true?
Those numbers sound big, but represent 3% of the workforce, not 40%. The dream hasn’t yet the headed for the door. Instead, recent research from Goldman Sachs’ economists offers a completely different take on the now hotly debated tale of spiritual awakening. Fully two-thirds of the folks leaving jobs this past August weren’t actually ‘quitting.’ They were retiring. One million were ‘normal’ retirements, an additional 1.5 million opted for early retirement. That’s a whole different story.
We could applaud a natural generational handover and welcome the increase in jobs and upward salary pressures for young people. But that would be ignoring the divided reality behind the data, between well-off knowledge workers and the harsh reality of the long-term unemployed.
Some older workers may be sailing off into purposeful third quarters, sitting on comfortable assets, and intent on starting a range of enticing opportunities, including launching a new business (25% of start-ups are being created by the over-55). But over half of US job seekers 55 and older were long-term (more than 6 months) unemployed. Job losses during the pandemic particularly hit the age extremes, the under-30s and the over-50s.
Age is not (yet) an element of most corporate diversity dimensions. If companies are struggling to find talent in a newly competitive job market, where the U.S. has more than 10 million jobs open and the U.K. 1.1 million, they may want to get more mindful of the generational balance of their workforce and tap into a potential longevity dividend. One of the easiest steps to managing retention, is to not unwittingly and unnecessarily lose talent in the first place.
3 Steps to Retaining Older Workers
One: Count Them. Start by measuring your company’s current age distribution. Most companies aren’t measuring the percentage of their workforces and talent by age, so they may not be aware of what percentage of today’s staff is eligible for retirement or early retirement. Get a sense of where your employee demographics lie, and what the knowledge deficits and implications of a wave of retirement might be. What are the risks to the business, and is there a robust succession plan in place? Also, don’t neglect external data. What are your customer demographics? Older customers (especially older women) hold huge purchasing power and are regularly complaining of being under-served and overlooked.
- Case Study: Insurance company AVIVA suddenly discovered in 2018 that fully a third of its people were eligible for retirement. They had never crunched the numbers before. Most of my clients don’t. Do you know how many of your colleagues are retirement ready?
Two: Develop Them. Many companies no longer invest in or develop employees over 50. In addition, many individuals at this age no longer think of investing in themselves. Workplaces are rife with unconscious ageism, one of the last ‘isms’ to be widely accepted and largely unseen. It’s also largely absent from the current Diversity & Inclusion agendas. One director laughed to the 55-year-old manager meeting him for her annual development review that the conversation ‘wouldn’t take long.’ If you want to retain staff across much longer working lives and careers, you’ll need to adjust career management to integrate lifelong learning and interesting and varied later career options.
- Case Study: American pharmacy CVS launched a Talent is Ageless program to explicitly invite workers of all ages to continue learning and growing. Their ‘Discovering You!’ training module invites mature employees to put newly acquired skills and knowledge to work.
Three: Kill the Cliff. The traditional retirement is a move from 100% employed to 100% retired. Overnight. Flex the model and offer older employees a range of flexible employment options that can taper over time. Older workers hold a lot of knowledge and expertise, but many may no longer need as much money – nor be ready for 24/7 work cultures. Motivation and engagement in later career may have more to do with sharing mastery and mentoring the next generations than it does with climbing the greasy pole or cashing in a year-end bonus. Make sure your incentive structure is age relevant. Simply extrapolating the ‘up or out’ linear career models that are still often the default ignores a huge – and growing – talent pool.
- Case Study: Unilever started a program called U-Work to flex employment models for three different ages hungry for more flexibility: millennials, perennials (over 50s) and parents. They created an internal ‘gig’ economy model with flexi-security. People keep their employment and benefits but take on projects – for a time.
It is ironic in this age of longevity, when people pushing past 50 are only arriving at midlife, that so many individuals and companies think they are ripe for retirement. The result is a massive drain of experienced talent.
We are likely to regret this loss in the coming years. We may be less likely to reverse it.