Employees taking early retirement are putting a strain on employers. According to a recent Washington Post report, millions of Baby Boomers have left the workforce since 2020.1 Some may be holding out for better jobs or more pay, planning to eventually return to the workforce, but many more will certainly stay in retirement.

"One in four workers in the U.S. is a Baby Boomer, amounting to 41 million total employees," writes Adecco USA, citing data from Pew.2 "This trend of mass retirement will lead to an even wider workforce gap as companies race to fill positions left by retirees. As these workers also normally hold higher-level management positions due to their extensive working experience, the competition to find replacements will be tough, with many businesses turning to recruiters to look for top talent."

So how can small businesses keep key employees from retiring early?

1. Increase Their Pay

More money is likely to be the most convincing way to get an employee to stay at your company. A significant pay raise is likely to convince many employees to continue, especially at a time when inflation continues to hit people's wallets all over the country. Higher pay for the remainder of their career is an opportunity to improve not only their current lifestyle, but that of their eventual retirement. That may be enticing enough to keep them around for a longer period of time.

2. Be More Flexible

More and more employees are demanding flexibility in their jobs. Allow them work from home when it won't compromise their ability to do their job properly. If you can give them more control over the hours they work without issue, do so. Less commuting and more convenience will make staying on the payroll much more appealing. Consider offering flextime.

"Flextime is a type of alternative schedule that gives a worker greater latitude in choosing his or her particular hours of work, or freedom to change work schedules from one week to the next depending on the employee's personal needs," explains SHRM.3 "Under a flextime arrangement, an employee might be required to work a standard number of core hours within a specified period, allowing the employee greater flexibility in starting and ending times."

3. Treat Them With Respect

Be sure you are always respectful to your employees. Older employees who are looking forward to retirement are more likely to do so early if they don't feel their employer appreciates them. Show them respect by listening to them, praising their good work or ideas, asking for their feedback, and ensuring the work you give them is worthy of their time as a senior-level employee. Look for opportunities for promotions or assigning exciting new projects.

4. Address Their Concerns

If an employee voices concerns, address them to the best of your ability. The goal is to keep them content and not resentful. Everyone wants to be heard, and if there are concerns that are making their job less pleasant, there might be solutions that can not only change their situation, but improve operations altogether. Discuss their concerns and listen to their ideas for solutions.

5. Make Sure They Have a Competent Team Around Them

Hiring great employees has been difficult for many businesses in recent years, but make sure you are doing so to the best of your ability. A longtime employee is more likely to consider an early retirement if they find themselves surrounded by an incompetent team. It can take time for a newer hire to get completely comfortable with a job, and a learning curve may be unavoidable. However, if you don't have an adequate training process in place and newer employees are allowed to get by while doing an inferior job, frustration is bound to build among your long-term employees.

One solution to this problem may be to set up a formal mentorship program in which seasoned employees are encouraged to share their knowledge with new team members. This will not only assist the younger employees and improve your team, but it will also help the older employees feel valued, which may increase their job satisfaction.

If an employee has found early retirement to be financially within their grasp, it might be difficult to keep them from moving on, but you can do everything in your power to give them a better working situation, and by doing so, you just might be able to retain them until they reach the traditional retirement age.

1. https://www.washingtonpost.com/business/2022/02/25/great-resignation-older-workers/

2. https://blog.adeccousa.com/2022-hiring-trend-great-retirement/

3. https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/managingflexibleworkarrangements.aspx

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC