Retirement Security: It’s Not Just About the Money
Posted Friday, May 20th, 2016| Comments Off on Retirement Security: It’s Not Just About the Money
Little-Known Facts about Flexible Work Options
The issue of retirement security gets frequent attention in the media, for the simple reason that many workers are not building the financial resources that they will need to maintain an acceptable standard of living after their retirement. As much as financial planners and media tell workers that their retirement income should meet or exceed about 70% of their preretirement income (replacement rate), many Americans will fall far short. The expectations of employers in helping their employees to build retirement wealth are spelled out in laws such as ERISA, and pensions exceeding those minimums are one of the most frequently sought-after benefits among employees.
Investment in Psychological Security Post-Retirement
With all the attention paid to financial retirement security, psychological retirement security has gotten short shrift. In American culture, paid employment is a central part of many people’s identities—a way through which they are a contributing member of their families and society. But, retirement security isn’t just about money — it’s also about meaning and identity. Even those who say they hate their jobs often find meaning or purpose in bringing home a paycheck. What happens when that disappears?
Retirement can be a shock for workers who do not have enough resources to replace the psychological benefits that they got from work. Workers are constantly told to diversify their financial investments, but almost never warned that they should diversify their psychological investments, as well. How can workers be better prepared to replace both the financial and psychological benefits of paid employment?
Many workers are answering this question partly by staying in the workforce longer. Some continue a successful career, while others move into retirement by scaling down their responsibilities gradually. Many seek bridge jobs to transition from full-time jobs to retirement. Gradual retirement, under the best of circumstances, can create a window of opportunity during which workers can build their financial and psychological retirement security. On the financial side, they may benefit from income and health insurance, among other benefits, from their less-demanding paid jobs. On the psychological side, they can explore new interests and roles—such as caregiving and volunteering — without disconnecting entirely from the psychological benefits of work. This can help them to remain engaged in productive activities as they age.
The Benefits of Bridge Policies
The sad truth, however, is that not all workers have good options for gradual pathways out of the labor force. Many older workers face long-term unemployment and, when older workers leave their jobs, their new jobs are often much less desirable in terms of benefits and pay. Others have to decide between retiring abruptly and continuing full-time because their employer doesn’t offer other options, and because part-time options in their field are limited. Employers who offer bridges between a full workload and full retirement can be a powerful force in building their employees’ financial and psychological security.
Many employers would support “bridge” policies, such as phased retirement, simply to do the right thing for their employees. But employers also have a vested interest in adopting these policies. Gradual retirement can build in time for succession planning, knowledge management, and retention of the valued skills and abilities of older workers. Yet, evidence suggests that the business community greatly undervalues bridge policies. For instance, the 2015 Talent Management study conducted by the Center on Aging & Work found that the leaders of American organizations typically are less committed to options for post-retirement-age work than they are to other benefits, such as training and development or competitive pay.
Benchmark yourself against similar employers in options for continued work and retirement, as well as other policies, and get customized tips: Workforce Benchmark Tool.
About Flexible Work Options: Quick Insights from the 2015 Talent Management Study
Posted Tuesday, April 26th, 2016| Comments Off on Little-Known Facts about Flexible Work Options
Passion, Purpose, and Impact: The Encore Secret Sauce
Posted Wednesday, April 6th, 2016| Comments Off on Passion, Purpose, and Impact: The Encore Secret Sauce
Building Usability: 3 ways for employers to create a supportive environment for working caregivers
About a year ago, I asked in AGEnda if wisdom that deepens with age, when joined with a passion for leaving the world a better place, translate into a unique path to social impact. Is there a special “encore career” secret sauce, one that allows someone with maturity and the desire to give back to have a super-sized impact?
At the time, Encore.org, where I work, was embarking on research to see whether programs that use what we call “encore talent” experience forms of impact that make a sometimes unexpected and often substantial difference.
Two recent reports suggest the answer is yes.
Masters in Service to Society
The first, “The Encore Talent Impact Project: A Study of Encore Talent at Work,” reports on the observations of more than 100 supervisors and managers in social-purpose organizations on the impact of nearly 1,700 people in encore roles. One of the biggest surprises from the data is that many introduced improvements conventionally associated with the work of full-time, paid staff—such as contributing new approaches, tools, and ideas to the organization.
The second, “Doing Good by Doing Well: Encore Fellows Build Nonprofits’ Capacity to Serve Children and Youth,” reports on three case studies. The author, Jacquelyn B. James, co-director of Boston College’s Center on Aging and Work (which hosts the AGEnda blog), teases out the dynamics whereby Encore fellows (participants in the Encore Fellowships Network, who serve one-year, stipended fellowships) combine business skills acquired over decades in the private sector with personal attributes to deliver exceptional value to the organizations they serve. For example, across all three cases, she noted that the fellows brought an ability to organize networks and groups, patience with process, good listening and negotiation skills, and a generally high level of emotional maturity.
Here’s that recipe for the “encore secret sauce.” The attributes that Dr. James observed are reflected precisely in the literature on mastery. And when we asked the respondents in our Encore Talent Impact survey whether the characteristics of mastery were present in the people they supervised, very high percentages said they were. For example, more than 80 percent of these encore engagements were carried out by people who “successfully explained, mentored, coached and built relationships with others.
Opening the Door to Encore Talent
It’s important to recognize that these characteristics, so tied to our notions of wisdom, translate into impact at a time when many people are rethinking the so-called “retirement years,” seeking instead to use their time and accumulated experience to improve their communities or to help future generations succeed.
We also know that often, abundant desire does not find its match in opportunity. According to 2014 research, 21.5 million people hope to move into social-purpose encore roles. But stubborn barriers still keep experienced adults from making the most of their talents in organizations that could benefit from them. Ageist stereotypes about the productivity of older people, whether in volunteer or paid roles, persist. And many nonprofits still won’t gamble on people coming to them from a corporate background. “They won’t fit in our culture,” they say.
It’s time to break down the barriers that keep talented people who want to serve from contributing to the nonprofit sector, which badly needs their talents. Nonprofits that understand the “secret sauce” of wisdom, experience, and mastery will welcome encore-stage adults in service of their mission. As these two reports illustrate, they’ll reap significant gains.
Posted Wednesday, March 23rd, 2016| Comments (3)
Positive Deviance: Supporting Working Caregivers
Caregiving is an unavoidable reality for the workforce. Human resources policies such as “flexibility and breaks” and “financial supports and resources” can help working caregivers, but only if these policies move from employee handbooks to actual workplace practices. Many employees are uncomfortable about using these benefits, because they are concerned that doing so will make their coworkers, supervisors, or managers view them as less dedicated or competent, potentially jeopardizing their jobs. As Susan Eaton and others have observed, formal HR policies are insufficient if the workplace culture diminishes their usability—the extent to which employees feel free to act on those policies, confident that their career prospects and job security won’t suffer.
How can employers make caregiving policies more usable by the typical employee?
Workers: Education on site and on time
Educating workers about caregiving can help them to transition into and sustain their engagement both in work and caregiving over time. Keep in mind that employees may already be under pressure to balance work and caregiving responsibilities, so it’s smart to make caregiving-related informational resources available to workers on site and during regular work hours, preferably at times that don’t interfere with work tasks.
Lunch and learns are a good example of how to handle this. Typically offered on site during the lunch break, lunch and learns are opportunities to convey practical information to caregivers. Here are two models:
- Learn + share: Some of the meeting is instructional, presenting solid information on such pertinent topics as advance directives. During the remainder of the meeting, participants share ideas and process emotions.
- Learn from community resources: Bringing in presenters from community agencies and omitting time for participants to share their responses can appeal to employees who are not yet able, ready, or willing to make their status as caregivers known.
Coworkers and work teams: Pay it forward
Caregivers often fear that their coworkers see them as shirking or less serious about their work. Connecting these workers to coworkers (individually or as a group) in caregiving-supportive relationships can increase their confidence to take advantage of other caregiving policies. Coworker- and work team-based information and support programs often function best as pay-it-forward arrangements, in which new caregivers learn from experienced caregivers, and eventually become resources and mentors themselves.
Informal collaborations are a good way to organize such an arrangement. Here are two models:
- One-on-one: An employee known to have some caregiving experience can be invited to mentor a colleague new to caregiving, helping the newcomer negotiate challenges both at work and in health service systems.
- On-site support groups: Employees join such a group voluntarily, and spend the first meeting brainstorming about the kinds of topics with which they could use help. Each week, group members are given “homework,” to encourage a sense of process.
Managers and supervisors: Gateways to organizational culture
Managers and supervisors have a huge influence on how comfortable workers feel about using their caregiving-related benefits. For this reason, both groups must buy in to the idea that support for working caregivers is in the organization’s best interests.
Training and educational resources can promote buy-in. With the right training and information, managers will learn to identify employees who are caregivers and help them to connect with community services (if needed) or to negotiate flexible work schedules to accommodate caregiving responsibilities. Here are two strategies:
- Direct manager training: Offer training sessions in which managers learn what they can ask appropriately, how to help employees identify needs that conflict with work schedules, and what combinations of support and fair compromises by the employer they can offer.
- Articles in company newsletters or on company websites: These could be original pieces on caregiving issues by HR staff or produced on contract by community agencies, such as the Alzheimer’s Association or Caregivers Alliance. People who don’t like the group approach will be especially appreciative of this alternative learning method. Consider linking to such resources as Employer Solutions for Family Caregivers, as appropriate.
Creating a workplace environment where people recognize, accept, and support the organization’s policies and programs for workers with caregiving responsibilities is essential for these policies to count. Building such acceptance within your organization at the individual, coworker/work group, and managerial level, by providing information and support, can ultimately increase the usability of other work/life balance programs, as well.
Posted Wednesday, March 2nd, 2016| Comments (2)
“But your mother lives 1200 miles away!” Using flexibility and breaks to support long-distance working caregivers
Posted Tuesday, February 9th, 2016| Comment (1)
Disrupting the Workplace: How Small Changes Can Make a Big Difference
Posted Monday, November 9th, 2015| Comments (2)
Should employers provide eldercare benefits?
Posted Wednesday, September 30th, 2015| Comments Off on Should employers provide eldercare benefits?
Are You Sitting on a Lost Knowledge Time Bomb?
Posted Wednesday, September 9th, 2015| Comment (1)
What does the future hold for “emerging” retirees?
Many organizations are sitting on a ticking time bomb of lost knowledge – or lost capabilities. The common refrain is, “we have lots of veteran employees with deep knowledge of complex systems or products, and no idea how we’re going to sustain these capabilities when our people retire.” When these older workers go, the performance of their organization is going to take a big hit.
Here are four questions to determine whether retirements are likely to threaten your organization’s capabilities:
1. Are your offices or operations located in a rural, suburban or urban setting?
Organizations operating in rural settings are usually at a distinct disadvantage when it comes to recruiting replacements for highly skilled workers and managers. Not only is there a smaller talent pool to recruit from, but it is also harder to entice younger talent to relocate to your part of the world. If you’re running this type of operation, or have part of your organization in a rural setting, you need to plan even further ahead for key transitions because it will take longer to fill those roles.
2. Are you clear about which jobs matter and which don’t?
All jobs are not created equal when it comes to sustaining critical capabilities. An industrial distribution company in the Midwest has a 70-year-old salesman who is their only expert in making and selling hydraulic hose couplings. Top management recently reclassified him as a hydraulics specialist, so he could focus on transferring his unique knowledge to other sales people.
Meanwhile, the company’s purchasing manager retired on short notice, and the CEO saw that as an opportunity to bring a more skilled person into this role. When it comes to transferring and retaining knowledge critical for future performance, you must be clear about which employees pose a risk and which present an opportunity to upgrade your talent.
3. Are you making the right assumptions about how much time you have to deal with the risks of knowledge loss?
Executives consistently underestimate the time they have before facing these problems. Many leaders don’t see a link between their aging workforce with the problem of serious skills gaps.
One of the hardest things to deal with is unplanned retirements of employees you’re counting on to stay longer. As an employer you have a right to do succession and workforce planning. That means you can ask valued employees to keep you informed about their retirement plans, but these conversations must be handled extremely carefully to avoid any suggestions of age discrimination. It is important to get advice from an attorney or HR expert before broaching the subject of retirement because you need to know what to do and what not to say. But if handled appropriately you will greatly reduce the risks of being blind-sided by an unexpected and costly departure.
4. Can you recruit, develop and RETAIN the Millennials needed to replace retiring workers?
One reason that an aging workforce is so problematic for many companies is that leaders have learned how difficult it is to develop and retain a new generation of highly skilled employees. The needs, values and behavior of the generation entering the workforce are a consistent source of frustration for many managers. Different priorities, work styles, and ways of learning clash with what many Baby Boomers expect.
But, as frustrating as these differences are, you have no choice! Aging Boomers are going to retire – or die – eventually. And every organization that expects to survive, much less grow, is going to have to figure out how to prosper with a Millennial workforce. Organizations that find a way to engage and retain productive younger workers fastest are going to be much more successful in negotiating the great wave of Boomer retirements. If you ignore this problem, your organization is much more at risk of losing critical capabilities as more Boomers retire.
What do you think? Do you have essential knowledge at risk in your organization? What questions are you asking to determine where your greatest risks are? I’d welcome your comments.
note: Dr. DeLong is the author of the book “Lost Knowledge: Confronting the Threat of an Aging Workforce”.
Posted Wednesday, August 5th, 2015| Comments (2)
Jacquelyn B. James, PhD
Co-director, Center on Aging & Work at Boston College
Research Assistant, Center on Aging & Work at Boston College
As a society, we are just starting to grapple with the wide-reaching implications of population aging and its effect on working lives. Many reports and surveys have described the changing expectations about work and retirement for the Baby Boom generation. (See for example, recent reports from SHRM, AARP, and Careerbuilder). There is still work to be done on the part of researchers, employers, and individuals to adapt to changing ideas about work for this generation, the largest in history. That said, the context of work and retirement continues to change rapidly, and future generations may face even stiffer challenges. For the sake of conversation, let’s call these future older adults “emerging” retirees, building on the idea of emerging adulthood.
Older adults of tomorrow — the “emerging” retirees — will face financial pressures unseen by previous generations of retirees: changes in eligibility for Social Security retirement benefits, a slower-growing economy, increasing healthcare costs, and changes in the availability and design of employer-sponsored retirement benefits (see surveys by MetLife and Transamerica). The employer/employee relationship may also be changing — we read about the “uberization” of the economy, the “gig” economy, and precarious jobs. There is even discussion of a “no-growth” economy. With these kinds of pressures and instabilities, the expectation of a secure retirement is becoming increasingly unrealistic for many people.
Older Baby Boomers and the generation that preceded them seem to have done better than did cohorts of retirees that came before them. As such, they appear to be just ahead of being seriously affected by the aforementioned trends, at least in terms of financial resources and planning. A recent New York Times article described how well these cohorts are doing. Younger Baby Boomers, however, are not faring as well, and things are even less promising for the ones just behind them, Generation X.
Furthermore, the Great Recession affected Gen Xers at the point that would typically be considered, or at least hoped, to be the highpoint of their careers. While Gen Xers were hit by the recession when they would have hoped to be doing their best, Millennials were hit right as their careers were starting. Added to this hitch in the path to later life, Gen Xers and Millenials, more so than preceding generations, have had to borrow uncommon sums of money to acquire their education. They have also been more likely to have intermittent employment spells making it difficult for them to save in preparation for retirement. Today, job security is disappearing, higher education is becoming a necessity, and student loan debt strains even good incomes.
Available research on these trends, however, can be contradictory. For instance, Transamerica reports increased optimism about retirement from all cohorts in recent years, while according to the National Institute on Retirement Security 86% of Americans in 2015 believe that we are in a retirement crisis. Clearly these trends reflect very important and complex issues that warrant increased attention and more research.
The one thing everyone seems to agree on is that, moving forward, retirement in the future simply will not look like it does for today’s cohort of retirees, which is complicated enough. Increased longevity means that, even without financial hardships and career setbacks, typical retirement plans will be insufficient for a growing number of people.
We believe that action needs to be to taken now to avoid a crisis for emerging retirees. What do you think? We welcome your ideas about action steps in terms of research, policy, and/or advocacy.