Employers Called on to Retain Older Workers

During a webinar held Wednesday on longevity and retirement, speakers said that, because people are living longer, workers want to remain in the workforce longer and policymakers and employers need to recognize this. They also said a multigenerational workforce is not only more productive, as people from as many as five generations share ideas, but that it is more profitable.

The Aegon Center for Longevity and Retirement, Transamerica Center for Retirement Studies and Instituto de Longevidade Mongeral Aegon hosted the webinar called, “Age-Friendly Employers Are Integral to the New Social Contract for Retirement.”

In his introduction, Mark Twigg, executive director of Ciero/AMO, and moderator of the panel, said the relationship between employees and employers is evolving. “Longevity means we need to rethink retirement,” Twigg said. “For many, employment is becoming more flexible.” He noted that a survey of 60,000 workers that the three sponsors conducted in 15 countries found that “57% expect a phased transition into retirement because they want to stay active and for financial reasons. However, ­­­­33% of workers do not think their employer is fostering a multigenerational workforce.”

Twigg said the survey also found that 26% of workers said they receive no training to keep their skills up to date. He noted that, beyond training, employers could help older workers to remain in the workforce by allowing them to transition from full-time to part-time work. Currently, only 28% of workers are given that option.

Debra Whitman, executive vice president at AARP, said, “It is important that when we say ‘age-friendly,’ we mean all age friendly—that is meeting the diversity of all of your employees and their needs. Women have children and take maternity leave. Many people are caregivers for parents or relatives. Employers need to think more broadly about the care needs of workers in an inclusive environment.”

If employers need to be convinced of the benefits of a multigenerational workforce, Whitman said, “If we allowed all people who wanted to work to do so, GDP [gross domestic product] would be 19% higher. Employers should care because mutigenerational teams work better and meet the needs of the market better. We did a study on the longevity economy. Older Americans would contribute $8.3 trillion of economic activity.”

Catherine Collinson, CEO and president of Transamerica Center for Retirement Studies, said, “In our work, we like to define an ‘age-friendly employer’ as one that offers diversity, inclusivity and that is age friendly. We need to reimagine the way people live, work and retire. Retirement systems around the world are undergoing severe strain due to increases in longevity, population aging, globalization and evolving employment trends. The coronavirus pandemic and economic downturn are intensifying existing risks to retirement security—and creating an even greater urgency for a new social contract among governments, employers, individuals and other stakeholders. Individuals are increasingly expected to self-fund retirement income, but only 25% of workers feel they are on the right course to meet their retirement income needs.”

Where can employers start? Since only 52% of workers are offered a retirement plan, Collinson called this “a really important starting point,” along with all the other services than come with a plan, such as investment guidance and financial wellness resources.

Collinson then outlined what she said she believes to be the five fundamental aspects of retirement readiness: “Save early and habitually. But only 40% of workers right now are habitual savers. Second, have a retirement strategy. Only 17% have a written plan for retirement. Third, have a back-up plan for life’s unforeseen circumstances. Only 35% have a back-up plan should they be unable to work before their planned retirement. Fourth, adopt a healthy lifestyle so you can work as you would like or need to. Fifth, embrace lifelong learning and improve financial literacy.”

For their part, employers not only have to offer retirement plans but, Whitman said, “make sure the benefits you offer are affecting all of your employees and meeting their unique needs across the lifespan.”

Whitman also encouraged employers to employ “age-blind hiring,” noting that, “discrimination against older people is real. We are losing a lot of talent and productivity.”

Collinson noted that policymakers are thinking about increasing the retirement age. “This is a really big issue and should become a greater topic of conversation,” she said. “We have a long way to go in terms of a policy and employers supporting these new realities.”

Whitman added: “Those countries that embrace the needs of an aging society will be the countries that succeed.”