14 July 2008
Incentives to persuade older workers to delay retirement
Making workers feel needed could partly ease the talent shortage.
Better get in employee incentive suggestions now or risk losing your company's knowledge bank, survey suggests.
A private, nonprofit research institute, the Employee Benefit Research Institute (EBRI) released the findings of its survey which advises that employers have only 2 years in which to change retiring workers' decisions. How? By offering them incentives to remain with the company.
Make employees feel needed
The purpose of the survey was to better understand the tools and practices that might encourage workers to postpone retirement and remain longer with their company.
Steps likely to be most successful are:
- making workers feel needed;
- offering them a full or partial pension while working part time; and
- making seasonal or contract work available.
The survey is based on responses from 4,981 workers in aerospace and defense industry companies who retired in 2003 or later and are currently between the ages of 55 and 65.
Communicate potential incentives early
"Although no single incentive is likely to motivate the majority of retirees to stay longer with their employer, it appears that employers may be able to assemble a toolkit of alternatives that would be effective in retaining substantial numbers of workers," said a report on the survey, published in the July 2008 EBRI Issue Brief.
A strong majority of retirees (61%) would have been open to an approach from their employer asking them to stay longer.
The timing of the offer of a delayed retirement incentive is important, the survey found.
Nearly two-thirds of retirees (63%) report that these offers would have been a lot more effective if the retirees had known about them in the 2 years before they communicated their intention to retire.
The survey found that a strong majority of retirees (61%) would have been open to an approach from their employer asking them to stay longer.
Ways to encourage workers to stay
The survey tested 19 possible incentives that might encourage retiring workers to postpone retirement, and found the following were likely to be especially persuasive:
- Feeling truly needed: Half of retirees (48%) indicate that feeling truly needed for an assignment would have been extremely or very effective in encouraging them to delay their retirement. Moreover, of those ranking this as one of the top 2 most effective incentives, 72% say it might have prompted them to stay at least 2 more years with the company.
- Contract work: Thirty-eight percent report that being able to work seasonally or on a contract basis would have been effective in encouraging them to delay retirement. Among those rating this as one of the top 2 incentives, more than three-quarters (77%) say it might have prompted them to stay 2 years longer with the company.
Other incentives that received significant support from recent retirees include:
- More meaningful work: Doing more meaningful work (36% effective, 67% 2 years or longer).
- Working from home: Telecommuting, so as to avoid the daily commute (28% effective, 68% 2 years or longer).
- Part-time work: Being able to work part time rather than full time (36% effective, 64% 2 years or longer).
- A pay raise: Receiving a pay increase (33% of all retirees say it would have been effective, 56% ranking it among top 2 most effective might have stayed 2 years or longer).
In general, workers begin thinking seriously about retirement not long before they actually retire, the survey found.
- Health benefits: Continuing to receive company-subsidized health insurance benefits at the same level as full-time workers while working part time (46% effective, 56 % 2 years or longer).
When does the retirement clock start ticking?
In general, workers begin thinking seriously about retirement not long before they actually retire, the survey found.
Twenty-two percent of the surveyed retirees first began thinking seriously about retiring only 6 months before they left the company, while another 22% began thinking seriously about it a year beforehand.
Twenty-eight percent started thinking about it 18 months (10%) or 2 years (18%) before.
Have your say
Does your organization have an active communication plan in place to help retain key older workers? Is there a formal process to ensure your company taps into their knowledge bank before they leave the organization?
Does your communication strategy include messaging older employees with information about potential delayed retirement incentives?
Discuss these issues with other comms practitioners by joining the Internal Comms Hub members' group on the Communicators' Network.
Other recommendations:
Improve retirement communication or deter new talents
A communicator's guide to Generation Y
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