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Early Dialogue May Get Retirees to Stick Around

June 6, 2007
Related Topics: Future Workplace, Motivating Employees, Workforce Planning, Latest News
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Employers and HR consultants for years have pondered ways to retain aging workers as the retirement wave nears. But as companies start to tackle the issue, many are realizing that the solution is not just about coming up with new ways of working; it’s about creating a culture where employees close to retirement age feel comfortable discussing their plans with their managers.

By the time companies initiate conversations with older workers about what they can do to get those employees to stay, it’s often too late, said Bruce Monte, director of retirement plans at PepsiCo, during a presentation at the WorldatWork Total Rewards Conference this month in Orlando, Florida.

These employees already have a date in mind and have discussed their plans with friends and family, he said.

“We realized the need to establish a dialogue about retirement with these employees,” Monte said. “It’s not something people need to feel closeted about.”

To address the issue, PepsiCo recently conducted interviews with a dozen top corporate executives to see what their retirement plans were and what would keep them at the company. The company is based in Purchase, New York, and has more than 150,000 employees worldwide.

A number of the executives revealed they were burned out and wanted time to rejuvenate, but could work longer, said Samira Kaderali, a senior consultant at Towers Perrin who made the presentation with Monte and helped analyze results of the interviews.

PepsiCo is talking to a select number of executives who are approaching retirement about how the company could keep them on longer. For example, one company executive will be working part time for a few months and a few executives have been invited to participate in a global sustainability task force, Monte said.

While PepsiCo’s pilot program is in its early stages, the company believes there is potential for having such discussions on a more formal basis with select executives approaching retirement, Monte said.

And employees value the frank discussions, according to Bruce Barge, principal in human resource management at New York-based Buck Consultants.

During a separate WorldatWork presentation, Barge cited a recent study conducted by the Tennessee Valley Authority in which workers were asked about their retirement plans.

“They got a tremendous amount of data and employees really liked the fact that they were being asked,” he said.

It would behoove companies to be proactive in this area because once employees start planning and talking about retirement, it might be harder to get them back, says William Love, a financial advisor with the Marshall Financial Group, a Doylestown, Pennsylvania-based registered investment advisor.

Love, whose clients include top executives planning to retire, says that often they are burned out, and by the time he talks to them they are focused on their retirement accounts. They just want to know what “number they need to hit so that they can retire,” Love says.

“By the time I see them, they are set on that number,” he says. “It would be good if companies could get ahead of that.”

Jessica Marquez

Read more about dealing with the aging workforce.

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