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Working through your retirement to beat the recession

Tue, 05 May 2009 09:05

Recession cost-cutting is a hot topic at the moment. Businesses need to plan for and consider their futures in the current economic climate.

The last real “recession” was more than a decade ago and it is likely that employers will require experienced and knowledgeable staff to help them weather the downturn.

During uncertain and tough economic times, companies will need to optimise the productivity of their workforces and this is where older workers can call on their wealth of experience.

Working into the retirement period will also benefit those over 65, as many struggle to keep up with the rising cost of living and inflation levels. Maintaining an income will help supplement a pension.

Jan Coetzee, Managing Director at Manpower South Africa says, “Retirements can often be perceived as a cost cutting exercise for companies; however this is a naive outlook. In a recession and consequent downturn, the core business areas need to be tightened and made stronger, and experienced staff are therefore central to this process.”

Employers often make the mistake of assuming that all employees want to retire as soon as possible, in fact, most employees believe that pensions alone are inadequate and are consequently working longer to fund retirement.

In addition, according to a recent survey, almost a third of all employees nearing retirement requested to work beyond their intended retirement date. It is noteworthy that employers granted 81% of those requests.

Coetzee continues: "Employees should therefore keep a transparent line of communication with their employers about their intentions for retirement and consider how they can still be of help if retirement is imminent."

As the working world becomes more flexible, employers may be willing to offer attractive packages, such as part time work. As a result, intellectual capital is retained to the employer's benefit and the mature worker eases off work while remaining employed.”

Although older workers provide experience during periods of economic downturn, they may also provide companies with cost saving opportunities with regards to training: taking on new staff means that companies need to pay for recruiting and training across a number of business areas.

On the other hand, during a downturn, the danger of retirement is that companies fail to replace older workers due to cost-saving measures. This can have an extremely damaging effect and highlights the crucial position that older workers can hold in many organisations.

Coetzee continues: “Unfortunately, in many cases, training and development opportunities dwindle as retirement age approaches. Those nearing retirement should ensure that their employer is giving them the correct training in all aspects of the business so that they have the same skills and opportunities as new employees.

"Employers need to think about attractive packages to incentivise employees nearing retirement. Attractive, flexible packages will allow both parties to plan for future business needs."

Manpower offers these top tips:
To employers:

- Listen: take advantage of the information and advice from the older workers in the business and take on board their experiences to plan for the future.

- Company retirement strategies: it is important for every company to have its own “transition plans” in place to ease the change process. Retirement options for employees could include flexible working and job sharing opportunities. Employers could also develop a pool of retired employees who might work on a variety of projects in order to preserve institutional knowledge.

Partnering a full time employee with an experienced retiree could also be a useful way to transfer intellectual capital. It is worth noting that a qualified consulting firm can advise organisations on how best to approach retirement strategies.

- Encourage older employees: by investing time and money in training older employees, productivity will increase and their confidence will grow. This will encourage them to continue working and provide valuable contributions to the business.

To employees:

- Use your experience: make sure you voice your ideas and opinions to express your views on how best the company can survive the current downturn. It is a matter of reminding your team of your knowledge, putting things in perspective and reinforcing the fact that your skills could further help the business get through a tricky economic period.

- Stay transparent: ensure that you inform your employer of your retirement intentions and be open to ideas about flexible working opportunities. If your company offers these opportunities, it is likely you would be able to work on a part time basis allowing for a smoother transition into retirement.

- Keep training: encourage your employer to keep your training up to date so that you do not fall behind and you have the same skills as new employees.

For more information please visit Manpower.