As has become an annual tradition in the business world, BlackRock chairman Larry Fink issued his latest ‘Dear CEO’ letter in the run up to the recent World Economic Forum, held from 22 to 25 January in Davos, Switzerland. [1]
In his missive, Fink alerted the global community of business leaders to the looming threat of “political dysfunction”, noting: “Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues.”
Urging firms to tap into the “inextricable link” between purpose and profit, he noted: “Retirement, in particular, is an area where companies must re-establish their traditional leadership role. For much of the 20th Century, it was an element of the social compact in many countries that employers had a responsibility to help workers navigate retirement.
“In some countries, particularly the United States, the shift to defined contribution plans changed the structure of that responsibility, leaving too many workers unprepared. And nearly all countries are confronting greater longevity and how to pay for it. This lack of preparedness for retirement is fuelling enormous anxiety and fear, undermining productivity in the workplace and amplifying populism in the political sphere.”
In response to this issue, he stressed, “companies must embrace a greater responsibility to help workers navigate retirement, lending their expertise and capacity for innovation to solve this immense global challenge. In doing so, companies will create not just a more stable and engaged workforce, but also a more economically secure population in the places where they operate.”
His message chimes with comments made by CIPD diversity and inclusion adviser Jill Miller in October 2017, when she told HR Magazine: “Offering phased retirement options can help people plan ahead for their retirement and achieve the balance they want between their work and personal circumstances.” [2]
Which other things could leaders do to improve their support for staff who are preparing for the transition into retirement?
The Institute of Leadership & Management head of research, policy and standards Kate Cooper says: “We explored the very question of how to help people make the transition from full-time work to no paid work at all in our 2015 research report Untapped Talent – a study of the multigenerational workforce. That led us to devise a set of guidelines for how to manage an age-diverse staff base, which we produced in partnership with Ashridge Business School (now Ashridge Executive Education), together with the Positive Ageing Company and the Department for Work and Pensions. We published those guidelines under the title Attract : Grow : Engage.”
Cooper points out: “There is always a strong demand for advice on how to plan financially for retirement, and that is something that HR departments can facilitate by offering staff the relevant seminars. But during our Untapped Talent research, we heard some interesting views on that approach at a workshop held by Ros Altmann, who was at that point engaged as the UK’s business champion for older workers. [3] One of the experts at that workshop advised leaders: ‘By all means, put on the seminars – but don’t assume that you already know what your various staff demographics will want to learn.’
“Leaders often take it as read that their older workers will want to hear about pensions, while younger ones will be seeking advice on, say, how to repay their student loans. But the expert urged leaders not to restrict choice – and to ask staff what they want to hear about, rather than simply frogmarch them into seminars based upon their age categories.”
Another important suggestion that emerged from the event, Cooper notes, was for employers to phase in retirement. “Have a plan in place that will provide for a steady reduction in the retiree’s role,” she says, “rather than a situation where that person faces a sudden, jarring cliff edge between lots of work and none whatsoever. That’s critical not just for providing the retiree with enough scope to adjust to the change, but for the organisation’s ability to implement a workable succession plan.”
Looking beyond that phased process, Cooper explains, it would also benefit organisations to recognise their retired staff as alumni, and to keep them in discreet contact. “You can hold events at your organisation enabling those people to make return visits, ensuring that their wisdom and experience are still accessible. According to research from Robert Gordon University in Aberdeen, the social exclusion that retirees suffer is much worse for men who don’t belong to any professional associations, as they tend not to sign up to community-based support or campaign groups. Indeed, the RGU research suggests, many of them will drive their wives to such groups and then wait in the car outside. So a well-organised alumni programme will help those men to maintain some kind of voice.”
Cooper adds: “One path that we at The Institute would strongly advocate is for retirees to explore work in the charity sector. Charities are always looking for trustees who can step onboard and provide assistance with a range of governance matters. This is an area in which employers can help retiring staff to develop the required links – and in cases where firms happen to be affiliated with specific charities, the connections will already exist. Charitable work is certainly one route that will enable retirees to continue to feel significant, to be part of a collective, community effort and to give something back.”
For further insights into the themes raised in this blog, check out the Institute’s resources on understanding HR