How Do We Successfully Succession Plan and Help Employees Prepare for Retirement?
It sounds like you are experiencing the effects of two current trends in the labor market: 1) job stagnation and inability to retire among lower-level employees and 2) a need to plan for turnover at the upper levels. Many organizations find their older employees are continuing to work past the traditional retirement age, partly because they are financially unable or otherwise unprepared to retire. At the same time, the average tenure of CEOs and other top executives has shortened significantly due to a number of factors, including shareholder pressures, consolidation and the simple fact that the workforce at senior levels is aging.
Organizations that want to help their lower-level employees prepare for retirement need to encourage them to save for retirement, to develop interests outside of work and even prepare for part-time post-retirement jobs. Ongoing training is important for all employees, regardless of their age. Encourage people to enhance their technical and other skills to keep pace with the changing requirements of the job and better prepare for life in retirement. You may also want to initiate conversations with employees who are both above and below your voluntary retirement age to discuss their post-employment plans. Both your employees and your company benefit by a better understanding of all employees' plans and problems.
At the same time, it is important to prepare the organization for the day when more experienced lower-level employees leave—which they all will, eventually. Companies do not want to find themselves without people who have the necessary skills to handle the evolving requirements of even entry-level positions in the new economy. Steps must be taken to simplify, codify and map the company's processes so that critical institutional knowledge is transferred to the next generation.
At the executive level, where excessive rather than low turnover is the issue in many organizations, you are right to be initiating a succession-management program for senior positions. Organizations need to plan carefully for transitions in these roles to ensure business continuity.
Because upper-level employees tend to be better prepared financially for retirement, they don't have the same constraints as lower-level employees to keep them on the job. To deal with upper-level employees who want to and can afford to retire, some organizations encourage them to stay on in part-time consulting roles to help train their successors and bring them up to speed. This can be an excellent way for an organization to safeguard its business continuity. However, most critically, organizations need to anticipate the requirements of senior level roles in the future. They must work to develop talent from within while keeping channels open for the potential of bringing talent in from the outside.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.