Reflecting a growing global trend, recent surveys of U.K. workers approaching retirement age indicate that a majority are considering continuing with part-time work instead of retiring.
An Abrdn survey of 2,000 U.K. workers revealed that two-thirds (66 percent) said they plan to remain in some form of employment in 2022, compared with 56 percent in 2021 and 34 percent in 2020. And nearly half of 1,000 workers surveyed by insurer Aegon said they want a preretirement period with a lightened workload, either working fewer days each week or fewer hours each workday.
The severe worldwide deficit in retirement savings, as noted in a 2019 World Economic Forum report, coupled with global economic uncertainty related to the COVID-19 pandemic, has left many workers anxious about their financial futures in retirement. Other workers cite nonfinancial reasons for their choice to continue working, such as maintaining a sense of purpose and enjoying the mental and social benefits of continued employment. The overarching reason most often expressed for older workers’ intention to continue work but with a lighter workload is the desire to avoid an abrupt end to working life and to find a more fluid transition to retirement.
Flexible Work Arrangements Can Benefit Employers
Although some employers still perceive older workers as more expensive and less productive than younger ones and thus less desirable to keep on the payroll, others are viewing preretirees’ plans to continue working as a positive development, said Yvonne Sonsino, Mercer partner in London and global co-lead of Next Stage, an initiative to help employers capture the value of age and experience.
Many employers “are now seeing the more experienced, older population as a rich seam of talent, especially given the Great Resignation,” she said. “Age itself is immaterial, but experience and tenure add value.”
Sonsino noted that many employers are working to develop flexible employment options and phased retirement, enabling employees to transition gradually from full-time employment to retirement. Allowing employees to work reduced hours for several years provides them with time to train the younger generation and facilitate succession. “Knowledge transfer is invaluable,” she said. “This type of arrangement puts preretirees on a glide path toward retirement, allowing them to develop a new work/life balance while maintaining high productivity.”
The traditional three-stage life model—study, work and retire—has been disrupted by globalization, artificial intelligence, the gig economy, and increased life spans, according to Amy Butterworth, head of consultancy at Timewise, a social enterprise and flexible working consultancy based in London. Further, the COVID-19 pandemic has changed how people think about work.
“Flexibility can have a massive impact on the working lives of people aged 50 and over,” Butterworth said. Workers can accommodate caregiving responsibilities for family with flexible hours, reduce time spent commuting by working remotely or cut back their hours to maintain an income while making time for other interests.
“For many employers, being able to retain older workers and benefit from their skills and experience for longer is a big driver in offering flexible working,” Butterworth said. “It is a win-win for the employee and their employer, particularly in sectors such as health care.”
Flexible working is especially important to older workers because it enables them to strike a work/life balance with their caregiving responsibilities and possible health conditions, said Luke Price, senior evidence manager at Centre for Ageing Better in London. “Flexible working is the No. 1 thing that would enable more older workers to remain in work for longer, and health conditions and caring responsibilities are the two biggest factors that result in older workers leaving the labor market.”
Price emphasized that employers should more actively encourage older workers to apply for jobs at their organizations by mentioning flexible working hours in job advertisements. Failing to do so means they “are potentially missing out on a huge untapped pool of older workers.”
Contrary to some assumptions, working flexibly doesn’t necessarily mean fewer hours, Price said, but can be individualized, such as by offering different start and finish times or compressed hours worked in fewer days. “The key takeaway here is to have a policy or approach to flexible working that is reason-neutral—i.e., don’t start with the ‘why,’ but rather, with ‘How could this work in your role/team?’ “
How Employers Can Help Employees Prepare for Retirement
Employers have many opportunities to help employees transition to retirement or partial retirement, Sonsino said, including:
- Offering flexible employment.
- Providing alternative types of employment, e.g., a gig contract for three days a week.
- Ensuring that health benefits cover issues more relevant to older workers—such as vision, hearing, and menopause support—and that these benefits are adequately communicated to employees.
- Providing financial education courses and seminars to prepare employees for retirement.
The Centre for Ageing Better has created a toolkit to guide employers in developing clear policies around flexible working, facilitating open conversations between managers and staff, and creating a sense of shared responsibility to make flexible working arrangements viable, Price said. He added that the Centre also has developed a guide to becoming an age-friendly employer, outlining principles that can make the workforce more inclusive and supportive: “Making our workplaces age-friendly is crucial in adapting to our shifting demographics, and we must ensure that health and well-being needs of older women at work are considered in designing age-friendly workplaces.”
“Employers should consider a range of solutions for their older workers to enable them to continue to work for longer, more flexibly,” Butterworth said. Employers need to approach flexible working options with older workers in a considered, thoughtful way and as part of a broader effort exploring flexible options for all staff.
Rosemarie Lally, J.D., is a freelance legal writer based in Washington, D.C.