The Aging Workforce: How to Implement a Happy Transition to Retirement
We have been talking to candidates and employers recently who are coming up against Australia’s aging workforce. For an older candidate, this may mean that they are factoring the concept of transition to retirement into their career plans. With the average Australian living to the age of 82, people now have between 15-20 years to fund and fill after turning 65.
This discussion paper by Australian Institute of Management talks about the expected decline in the Australian workforce participation rates, driven by the retirement of Baby Boomers and Generation X over the next 35 years. The GFC in particular scared many older workers out of retiring at 65. Retirement ages are increased in Australia – to 67 by 2023. Older workers will be in the workforce longer. Older workers in a “transition to retirement phase” will become more commonplace.
For an employer, our aging workforce means two things
A Need to Extract Corporate Knowledge
For a company, this means the challenge of dealing with long term employees that have extensive knowledge of your corporate history. They might be the only one who knows the reason why a particular thing is done in a certain way. This team member may be a key staff member and the business needs to ensure succession planning occurs to ensure you can go on without them. An older worker has years of experience and wisdom that has built up over time. In some instances an older worker may even have built up a key strategic client relationship over their time with your company.
Understand when they are likely to retire – so you can plan. The AIM discussion paper suggests mixed age teams are a useful tool to spread older workers knowledge across the business.
The Older Worker Opportunity
The aging workforce in Australia also presents a massive opportunity. This means that companies can actively engage/ retain and recruit older workers.
An older employee adds to your cultural diversity, which helps with both company decision making and productivity.
There are several ways you can continue to attract older workers to your company.
- Offer flexibility – Australians are increasingly wanting to work part time before they retire.
- Offer development opportunities: The AIM discussion paper presents the concept of “encore careers”. This is where older workers transition to a career with a social impact after they have retired from their “day job”. This means that your older workers may still be looking for development opportunities.
For the Employee:
Our aging workforce is not just a challenge for employers. Those employees nearing retirement age also need to prepare themselves emotionally and psychologically.
We recommend taking a transition approach to retirement. This may include working part time for several years. For the reasons outlined above, Employers are starting to understand the value of an older employee. For this reason it is certainly worth asking whether flexible or part time hours may be possible.
Retirement might mean stepping out of the paid workplace and into a volunteer role. You might take a position on a board or a more active role in a local activity.
Your Self Esteem
For an employee, a large part of your identity can be caught up in your working life. Your job title, your level of seniority and how people perceive you as you make your way through your workplace all contribute to your sense of self. You may be respected and held in great esteem in your workplace. It can be quite an adjustment to leave all that behind you. Be aware that this will require some effort on your part to accept this as a natural part of the world. Consider how you can continue to add value and contribute to society.
Once you walk away from that you need to find a new purpose. When planning for retirement it is worthwhile to take some time to consider exactly what you are going to dedicate your time and energy to once you no longer need to show up at work.
We have all heard the horror stories of people who lived for their job, and then once retirement occurred, dropped dead within months having not enjoyed a single moment of their retirement plans.
Having a purpose, hobbies, plans and goals are all still relevant once you have left the workforce.
You are prepared financially for the years ahead. Psychologically, you also need to get your head around no longer being in a wealth accruing phase of your life. It can be challenging to outlay for travel and large expenses when you know your funds are at the mercy of the economy and the global markets.
Most people will undertake a cost benefit analysis as to whether they need to keep working in some capacity after retirement. This should be done in conjunction with an expert. This will ensure any impact to your pension is considered and that tax implications are thought through.
Your Bucket List
This is the fun bit! Have some big goals. Make a bucket list of things to look forward to. Match up to your budget and spread it out over 10+ years.
If you have played a senior role in a company your self-esteem is likely to be wrapped up somewhat in your career. This is a good time to consider mentoring junior staff members. You can stay in touch with former colleagues easily via professional networking tools like LinkedIn. Take the time to have a coffee with those whose careers you think you can add value to. This is a great way to give back.
Just because you no longer have to head to the office every day, you still need to keep your brain active. Puzzles, crosswords and games can help with this, however there is also nothing stopping you heading off to further education. This is a great time to learn that language that you always meant to!
Your networks and friendship circles remain valuable. Keep in touch and keep them active.
This one really belongs first on the list. It is the most essential part of a great retirement. Ensure you have regular check-ups and make exercise part of your daily routine.
In Australia our aging workforce makes retirement planning essential for employers of older workers and employees. We suggest you start thinking about how this might impact your own plans, or those older workers in your workplace. If you need help with career planning for older workers or implementing transition to retirement programs, get in touch with our team at Career People. We can help.