Have the bad economy and the associated belt-tightening, layoffs, and furloughs totally distracted you from the impending crisis you were thinking about a couple of years ago? How will your company fare if and when the economy recovers and an avalanche of baby boomer retirements occurs? Do you have any idea whether you can really count on them staying longer because of the damage done to retirement portfolios?
In Ernst & Young’s 2007 poll of the Fortune 1000, HR executives acknowledged the lack of preparedness for the “brain drain.” They also noted that succession planning was especially deficient at the middle management level. No matter how much you’d like to push this concern to the back burner, the fact of the matter is that over 7,000 people are reaching the “traditional” retirement age of 65 every day. How are you planning to develop qualified leaders, in the face of younger generations who are less likely than the boomers were to stay around and be groomed for the next level of responsibility?
Why Does Retirement Have to Be an On/Off Switch?
We probably fell into that thinking because corporate pensions and government-sponsored supplemental income programs are much easier to administer if employees are either not yet eligible (OFF = employed) or eligible (ON = unemployed) for benefits. By the 1970’s when most boomers were in their early career years, social security income had risen to the level that it had largely eliminated the poverty of the elderly it had been designed to address. Perhaps this was an early reinforcement of the idea that everyone could or should just stop working at age 65, although some would aspire to do so even earlier.
Health studies show that such abrupt change is a great driver of mortality. The earlier the retirement occurs, the greater the increase in mortality rates. Not only is our current social philosophy killing people, it could also be the next corporate killer. On the heels of an economic recovery and increased employment needs, companies could be faced with too few workers and too few experienced middle managers to keep the company on track.
New Horizons™ - Planning for a Retirement Transition
Career Partners International has just launched a program – New Horizons – that supports employees thinking through their preparedness for retirement, not just financially but from every angle. This program is initially receiving lots of attention and deployment as an optional component of our outplacement programs. However, CPI will be helping its clients to structure innovative win-win plans that use the New Horizons program as one method of calmly steering companies away from a potential future disaster – the boomer brain drain. Why not help the boomers map out a smooth path to retirement that is less likely to leave you in a lurch?
According to a Fidelity Investments survey, 82 percent of the near-retirement-aged couples they polled didn’t even agree on when to retire, whether to continue with part-time employment, or how to spend their new leisure hours. No wonder retirement proves to be so stressful and harmful to health! Financial advisors cannot begin to develop a plan until such fundamental questions are resolved. That’s why the New Horizons program is so valuable – it provides a reality check for every aspect of retirement, not just the financial considerations.
New Horizons™ - An Individualized Approach to Planning
Unlike most retirement training programs, the New Horizons program begins with an assessment that helps each individual understand how well he or she is prepared for retirement as compared to others with similar profiles. This makes the task of retirement planning become more manageable and practical, both for employees and for CPI’s specially trained and certified retirement coaches. Your support in helping employees map out a sound retirement path with New Horizons could have a great boomerang effect. You could open the door to developing a graceful retirement process that is truly a win for both parties.
Call your local CPI partner firm to learn more about New Horizons™ to discuss getting a better handle on succession planning. Consider New Horizons™ as a benefit that could improve the morale, and potentially the productivity, of workers aged 50 and over. Or in the short term, consider making New Horizons™ a component of your outplacement or voluntary retirement program. Let us help you and your employees start thinking about retirement in a new and more informed light.