4 Alternatives to Retirement

The issue of an ageing workforce was highlighted by the CIPD back in 2015.

In their initial report, they highlighted that there were 9.4 million employees over the age of 50 in the UK labour market. That’s equivalent to 30% of the workforce. Fast forward five years later—that number has risen. Just under 10.6 million employees are now over the age of 50. Or, in simpler terms, roughly a third of all workers in the UK are now 50 or over.

Of these people, 800,000 of them weren’t in work, but wanted to be.

Why does this matter?

At the moment, UK employers are facing a major issue: understaffing. Some industries have been hit harder than others, but none have gone unscathed.

There are many factors contributing towards this problem—coronavirus and Brexit to name just a couple. In the face of such challenges, it’s easy to feel like there is nothing you can do to stop it. However, you can address one major factor: the ageing workforce.

How?

Present your employees with an alternative to retirement. Referring to the above statistic—800,000 workers of retirement age still want to be working. In some cases, an individual may choose to stay with the business when you present them with the right option…

Four alternatives to retirement

1. A new role

Is your employee retiring because they’re unhappy or tired of their role? If so, offering an alternative position may encourage them to stay. If you do choose this, make sure the new role is equivalent to their current one.  A significant pay cut or reduction in benefits isn’t likely to convince them to stay in work instead of retiring.

You don’t have to offer them a position similar to their current job. If they need training to switch, let them know that this will be the case and offer to support them with it. They may be looking for a new challenge anyway, and you’re never too old to develop new skills.

2. Working from home

Flexible working isn’t just for millennials and Gen Z staff. In many cases, remote work is appealing to those of retirement age. It cuts down travel time and means workers can spend more time with their families.  Those who have dependents or other commitments will also appreciate this option.

Naturally, not every position will be viable for homeworking. You’ll need to assess whether each role can be done from home. If you do decide to allow remote work, you’ll need to conduct a homeworking risk assessment. You may also need to carry out training on new systems to make sure the employee is able to work from home efficiently.

Homeworking doesn’t have to be full time either. Consider flexible options where the individual spends some time in the workplace and the rest at their home office.

3. Reduced hours or part-time work

You could also consider shifting their hours of work. There are a number of alternatives you can implement:

• Moving from full-time to part-time
• Reducing overall hours of work
• Implementing flexible start and finish times

Again, these options depend on the role itself. However, there aren’t many roles where you won’t be able to implement some degree of flexibility. Speak with the individual to see what will work for them—include them in the conversation. Are there certain days they would like to take off? Could they do with a later start or earlier finish?

4. Phased retirement

If you really can’t convince them to stay in the long-term, you could make the most of their time in the workplace. Phased retirements offer quite a degree of flexibility. Typically, it means the individual reduces their hours of work, drawing from their pension pot while retaining a regular income. If this sounds like something you’d want to put into place, you should discuss how it will work with the employee.

There is no strict limit to how long a phased retirement will last. However, the policy cannot be enacted beyond the age of 75. This means you could hold on to your valuable employee for a couple of decades longer, albeit on reduced hours.

You must agree a phased retirement with the individual before you put it into action. Failing to do so could result in tribunal claim.

If you need assistance managing staff pensions during a phased retirement, speak to one of experts today on 01455 858 132.

Expert support

Retirement, pensions, and employee retention. Managing staff is tricky, and keeping the best talent is to business success. Unfortunately, it’s not always simple, which is why Croner is here to help.

Whether you need assistance calculating pension contributions, encouraging staff retention, or managing the retirement of an employee, speak to a expert HR consultant on 01455 858 132.