The baby boomer generation is reaching retirement age, but they aren’t retiring—at least not at the same rate as their parents. This is having a significant impact on the age of the workforce.
Why aren’t the baby boomers retiring? For one, the official social security retirement age has been increasing since 1998, keeping many older employees in the workforce longer. In addition, the recession depleted the retirement savings of many baby boomers, forcing them to delay their retirement or return to work.
This trend is important because of its sheer magnitude: not only is the workforce aging, it is doing so at an alarming rate. Over the past ten years, the total full-time workforce increased by approximately 1, while the 55 and older segment increased by 45.
The rapidly aging workforce comes with increased levels of absenteeism, as mature employees tend to take more time off for health issues. Studies have shown that employees aged 55 to 64 miss 10.8 days due to illness, while their coworkers who are ten years younger miss 8.5 days. It’s no surprise, considering that 80% of older Americans have at least one chronic condition and more than 50% have at least two.
Employee absenteeism is not only inconvenient, it brings significant costs. According to the Census Bureau and the Bureau of Labor Statistics, the direct financial impact of absenteeism adds up to $74 billion. A study by Mercer found that absences cost organizations an average of 12.2% of payroll. As the workforce ages and absences rise, these costs can be expected to increase.
But it is important to remember the many advantages of mature workers: they tend to be well-trained, have specialized skills, exhibit a strong work ethic and take greater pride and satisfaction in their work compared to younger generations. Here are six tips for organizations to accommodate these valuable workers while still managing their own costs:
# Health programs on-site: Encourage workers to lead healthier lifestyles by having a health program at your workplace. These kinds of programs have been shown to improve health and well-being, lower health risks (leading to lower healthcare costs), reduce absenteeism and increase productivity.
#2 Flexible work arrangements: Many older employees would like to continue working, but want more flexibility and more personal time. Flexible work arrangements, telecommuting, job-sharing and project-based work are all ways to allow the employee to feel she is contributing while still being responsive to her needs.
#3 Employee assistance and work-life programs: Consider giving mature workers access to services to help with personal and work-related issues, such as elder care. Employees can use services for themselves or their families, which reduces stress and lets them focus better and contribute time to work.
#4 Care management: This new approach uses a voluntary payroll deduction to fund the employee’s access to geriatric care managers. A care manager works with the employee to create a comprehensive plan for their health, safety, social and financial wellness. Care management programs can allow workers to fully concentrate on the job.
#5 Creating an “aging plan”: For workers in high-risk positions, it is wise to create a preventative plan for alternative work options. As they age, these employees may not be able to continue contributing in the same way, but there may be other ways they can make an impact on the business.
#6 Succession planning: As experienced, mature employees in key positions begin to retire, or face health issues that keep them from working, it’s important to have a plan in place for who will fill important positions. Organizations must devote time to training and developing the employees who will step into key positions when older workers retire.
The workforce is aging at a rapid rate, and employers must be ready to deal with increased absenteeism. As employers are planning their strategy for dealing with their mature workers, they will need the right data and analytics to make decisions. Paycor’s Custom Web Reporting gives organizations quick access to important information like employee demographics, hours worked and retirement plan eligibility, enabling them to make informed decisions about their business. Learn more by contacting us today.
Source: PayTech Magazine
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