Do we finally have the opportunity to get retirement right?

The coronavirus pandemic has had the strange effect of making things in life the opposite of what they’ve always been. In the day and age of mass global transportation, for example, none of us would have imagined a world where we were told – and forced – not to leave our own homes. Likewise, after decades of Australian companies saying, even this year, that flexible work doesn’t work, and that a four-day week is all but impossible, suddenly, thousands of professionals are working reduced days and all of us are working from home. What looked implausible or even impossible back in February has, overnight, become our new reality. 

A potential silver lining of the pandemic is that we can finally give ourselves permission to reimagine parts of the employee experience that have long been broken. And one area that is ripe for such a reimagining is retirement. 

For as long as retirement has existed, businesses have put much more thought, effort and resources into attracting people, as opposed to the opposite of that: making their exit as meaningful as possible. And in the days of golden watches and defined benefit funds, this was largely ok: your thank-you came by way of guaranteed financial support for life. Now, with limited superannuation funds and people living far longer than before, businesses can – should – be doing more to support their longest-serving and most loyal mature-aged staff. In other words, retirement should be less of the ‘abrupt’ end that most organisations see it as, and more of a mutually beneficial, productive and enjoyable transition. 

Whichever way organisations see the transition, one thing is true: it would be irresponsible for businesses to force mass amounts of people into an abrupt retirement now, given that more than 15% has been wiped off the value of most superannuation funds. Yet during the last global financial crisis, downsizing efforts disproportionately affected mature-aged employees. Will we see a wave of unsatisfied retirees shortly, or will we finally use this opportunity to get retirement right? 

Retirement – an increasingly complex issue 

In the days of old, life was more or less a regimented and chronological affair. You finished school, got a job through your network, got married, had your children and then at a certain age, you retired. Your employer, whom at that stage you’d worked for for life, rewarded your hard work by paying you a defined benefit for life. This was feasible then: on average, people only lived 7 years beyond the date they retired. 

Today, that reality doesn’t resemble our careers, or our lives. Jobs for life are increasingly rare, and defined benefit funds are a thing of the past. Retirement is a much longer and more enjoyable lifestage, with the average retirement now lasting more than 18 years. And as we’re healthier for longer and there’s more jobs than ever in the knowledge economy, it’s incredibly feasible to continue working in some way, shape or form far beyond what one would typically consider ‘retirement age.’ 

Wayne Bishop, Director of Changing Gears, a retirement consultancy, believes that most organisations, and indeed, people, are still catching up when it comes to all things retirement: : 

‘So much has changed in such a relatively short space of time. What we repeatedly and consistently find is that both businesses and people are remarkably unprepared.’ 

‘There’s so many options and variations of what you can and should do, people tend to float. Very few people have a plan for what a meaningful life after work might look like.’ 

Organisations don’t know how to do better 

One of the reasons that businesses may favour the ‘abrupt’ retirement is that they simply don’t know how to do better. But doing better isn’t hard – and indeed, right now there’s a strong business case to support it. 

Retirement is a major life stage transition and as such, needs to be gradual – just like the onboarding process for a new job, or returning from maternity leave. A ‘gradual’ transition from work may include the opportunity to work flexibly or part-time, while simultaneously focusing on activities that may feature more heavily in retirement, including spending more time on hobbies or travel. 

Prior to the pandemic, many businesses were reluctant to offer flexible work – they deemed it ‘too hard’ and, on the sly, doubted their mature workforce would be able to keep up with the technology required to support it. With everyone now working remotely, organisations actively looking to reduce days at work and mature workers also at increased risk from the coronavirus, a staged transition to retirement has gone from ‘too hard’ to a much-needed reality. 

Beyond the simple logistics of a staged retirement though, the pandemic, with its over 300,000 deaths, and many in those of retirement age, has seen people think more deeply about their purpose and goals in life – a fundamental shift that Wayne Bishop thinks is way overdue when it comes to retirement: 

‘So often we see that people simply haven’t thought about life after work. They haven’t realised how much work brings to their lives in terms of social connections, problem solving and feeling like they have a purpose.’ 

‘This leads to people, 6 months into retirement, feeling as if they’ve lost their identity.’

The change in identity, according to Wayne, is another element of retirement that many organisations simply don’t know how to do well, with many focusing simply on the financials in order to ‘tick a box.’ 

‘But retirement planning needs to be so much more than that.’ Says Wayne. 

‘It needs to help employees consider every facet of their after-work life, from their health, to how they’ll spend their time. Hopefully the “life and death” nature of the pandemic will help both employers and employees understand and plan for this.’

Creating pathways for mature-aged employees to progressively transition into retirement is much easier than most businesses think, Wayne says, and he helps many do just that with his program, Changing Gears. 

‘Having a staged transition and holistic planning helps both employees and employers feel as if retirement is something to celebrate – and indeed, it is. But to do so, it needs to be done right.’   

Businesses don’t understand why they need to do better

For every organisation that doesn’t know how to do retirement better, there is another who simply doesn’t understand why they need to do it better. Interestingly, this is yet another awakening that the pandemic may have enabled. 

Organisations who see little value in delivering a holistic retirement transition program often don’t see the value in mature workers themselves. These organisations usually ascribe to tired stereotypes of older workers, believing that they’re ‘expensive,’ ‘stuck in their ways’ and ‘not as productive, efficient, or as good with technology’ as younger employees. 

From a technology and productivity perspective, our pandemic work-from-home experiment thus far has blown all of these tired stereotypes out of the water. 

Beyond that though, in this crisis, mature workers have something their younger counterparts don’t – and can’t – have: experience in other crises. Wayne believes this experience is invaluable: 

‘Understanding what to do when things go wrong is an essential workplace skill that almost all mature-age workers would possess. Those who have only been in the workforce for a decade or a little longer have only seen the world in stable times, in boom times.’ 

‘For this reason alone, among others, mature aged workers are invaluable, and appropriate knowledge transfer must be arranged (via mentoring or other techniques) so as current employees can access their wealth of experience.’  

Now, more than ever, losing cohorts of mature-aged workers equates to losing decades of critical knowledge on business continuity – exactly the knowledge that the business can’t afford to lose right now. 

An opportunity to do things right 

Experts from all over the world are warning that things ‘won’t go back to normal.’ But for so many elements of our working lives, is that a really bad thing?

Over the next few months and even years, HR teams everywhere will need to figure out how best to navigate downsizing. Looking after long-serving staff here should be a priority, and from this perspective a transition to retirement program makes excellent business sense: encouraging mature-aged workers to work less may well save jobs elsewhere.  

More importantly, though,the world has lost far too many people who undoubtedly had so much more to give their employers, families and societies. So now, more than ever, it’s critical that employers help their people transition to retirement with the choice, dignity and control they deserve. 

Career Money Life is a digital career benefits platform that helps businesses of all sizes transition their employees by giving them the flexibility to design their own experience. To help all employers through the COVID crisis, we are currently offering free access to our platform. 

In conjunction with the Changing Gears team, Career Money Life has also developed a Life Stage Plan’ program that helps retiring employees holistically plan their retirement, leading to a more fulfilling transition. 

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