Eight trends are changing the way people are retiring, according to Neal Bruce, vice president, product management for Peoplefluent, a workforce talent management company. The demographics may even affect the future performance of some companies, especially those in the energy and nuclear power fields. “Some companies may fall off the knowledge cliff when their retirees actually retire,” Bruce predicts.
Here are the trends and his suggestions for mitigation:
On the employer side:
1. Demographic changes. Do the math. Generation X (people in their 30s and 40s) is smaller than the baby boomers, who are in their 60s. Bruce estimates there is a 15-year gap when there won’t be enough Gen Xers to fill the management slots left vacant by the baby boomers.
Who will fill those roles? Retirees.
2. Failure of today’s knowledge management systems. Bruce says for decades companies have been talking about knowledge management systems, but the “practical situation is these usually just capture documents.” For example, only the long-time account managers truly understand the political nuances of their customers. “The company will have a hard time initially when that long-term knowledge walks out the door,” says Bruce.
3. Flexible work arrangements are becoming the norm. Working mothers pioneered the way for flexible work arrangements. “It’s now the new normal to work two days a week,” says the Peoplefluent executive.
4. Corporate financial motivation.Corporations have discovered retirees will work for less compensation than those climbing the ladder. For example, they don’t need health insurance because they already qualify for Medicare. “These seasoned employees are a good value for corporations,” observes Bruce.
On the employee side:
5. The financial situation of the retirees. They look at the prices of their homes or the value of their 401(k) plans and they weep. The past four years have not been good to them. “Many retirees are freaked out about this,” says Bruce. “So they are thinking going back to work isn’t such a bad idea.”
6. Boredom. “The coach gets old,” points out Bruce. Retirees who have worked their whole lives often have their identities linked to their work. “Many are eager to get back in the game,” Bruce adds.
7. “70 is the new 50.” Today’s seniors are living longer. When Social Security began in August 1935, people lived three years after they began collecting their funds. Today Bruce says it’s common for people to live 30 years after their last paycheck. How many people have saved enough to live three more decades? Those who didn’t still have to work
8. Technology. Today most RPOs have sophisticated vendor management systems (VMS) to manage their contingent labor force. “Today we have the technology to easily match retirees with job needs,” says Bruce.
The Peoplefluent executive says RPOs are adding retirees to their applicant tracking systems (ATS) to identify future workers. In fact, he says many RPOs are integrating their ATS and VMS with their CRM systems to create common reporting.
“When companies have a problem and need certain people to solve it, we go to this integrated database to reach out to the people we need,” Bruce says. Now they are easier to find thanks to the integrated databases.
A real life example
My friend Cecille handles customer orders for a commercial plumbing company here in Las Vegas where we live. She turned 65 in 2010. By then the plumbing company was struggling since the commercial building boom in Las Vegas was over. The company couldn’t afford to keep her full time but also couldn’t afford to lose her intimate knowledge of all its customers.
So, Cecille became a part-time employee, working Monday through Wednesday. She has no benefits but doesn’t care because she’s got health insurance through Medicare.
The employer benefits because its customers are happy since Cecille knows just what they want. Cecille is now not a fully-loaded employee, so the company saves money by not paying her benefits. She’s happy because she loves her job, but just doesn’t want to do it every day. And she doesn’t mind the extra money, either.
So, the image of retirees sitting on the porch in a rocking chair is now old hat. They are still rocking the employment world, just not full time. And the RPO community developed the technology to make it possible.