What is the silver tsunami, and how can you prepare and support your workforce.

The silver tsunami is a metaphor for the expected population shift caused by aging baby boomers nearing retirement. This major population shift impacts many areas including healthcare systems, government and social services, and the labor market

The silver tsunami, coupled with the fact that many employers are struggling to fill roles, makes it increasingly more important for businesses to try to find more ways to hold on to their loyal senior workforce.

How much is the aging population impacting the workforce?

The good news is, there aren’t as many workers leaving the workforce as some feared. About 19% of adults over 65 are still employed, and because the number of seniors over 65 who are continuing to work part- or full-time, only 45% of seniors would label themselves as retired.

There are several contributing factors to this increase in working seniors, including:

• Improved health, allowing workers to remain employed longer
• Inflation, making retirement unattainable financially
• Longer lifespans, which often means current retirement savings will not cover the retirement period
• Evolved retirement plans, which allow for more flexible retirement ages
• Changes in social security that discourage early retirement
• More age-friendly work environments supporting aging employees.

While the threat of losing a significant portion of your workforce may feel daunting, there are steps you can take to prepare for the transition and minimize the impact.

1. Offer part-time and flexible work options

Many retirees see entering retirement as more of a marathon than a sprint. They aren’t racing toward retirement as soon as they reach retirement age. Instead, they are gradually transitioning to retirement over time.

Offering part-time options allows retirees to make a slower transition. Moving your senior employees into part-time roles keeps their knowledge and experience in the office while you train and prepare the next rising talent. It also offers your senior retirees extra time to begin enjoying their retirement while continuing to contribute money to their retirement accounts.

You can also consider switching their role to offer hybrid or remote flex work options during their transition. This allows them to spend less time commuting and enjoy more time in the comfort of their home as they shift the scale in their work-life balance.

2. Moving retirees into new roles

Due to changing labor laws and technology support, the average job today isn’t too labor heavy. Because of the ease of the average working conditions, employees can work much longer, even with the health challenges that come with age.

With the support of technology, some roles will remain more demanding than others. For instance, managerial roles experience high-stress levels and require quick decision-making skills.

To keep those in the silver tsunami age range comfortable longer at the office, consider moving them to less-stressful, less-demanding positions.

For instance, moving your older workers into consultant roles allows them to train new employees, so you can still benefit from their knowledge without exposing them to the stressors of their original position.

3. Adjust your flexible retirement benefits and rewards

Employees approaching retirement have different benefits priorities than your younger employees. Just think about what they have going on in their lives. They are often grandparents and may have children all over the country they might enjoy visiting. They might also be living with aging relatives or be struggling with various health conditions.

Having benefits that support their health and well-being is crucial for attracting retirees to stay longer and fill gaps in the workforce as you train additional talent. You may also consider adjusting your retirement plans, such as offering greater rewards for later retirement to encourage them to stay longer in the workforce.

4. Offer flexible time-off arrangements

Seniors may require more leave time than other employees due to different demands. Some common events that require them to take significant time off include:

• Medical episodes and hospital stays due to health conditions that come with advanced age
• Grandparent’s leave to help support a grandchild during and after birth
• Caregiver’s leave to help support aging parents

Employers might offer senior employees more flexible leave policies or additional days for those common needs. Offering remote work options can also support many situations, especially medical needs where they might not feel up for coming into the office or their driving is restricted.

5. Create a knowledge funnel

A knowledge funnel moves information from the top down through the company. Even though you may improve your benefits, rewards, and flexible working arrangements, your senior staff will eventually retire.

You can prepare for that day by creating a flow of information.

As your senior members near retirement, begin setting up programs to pass along their information. Those employees could act as consultants, mentors, and trainers. You may also adjust the job description to include a transition guide containing their insights into their role and the company as a whole. You can then reference the guide after they retire and are no longer available as an information source.

Be prepared for a silver tsunami

A gradual movement from full-time employment to retirement is beneficial to your employees and the company. Your employees will be much happier as they can work in environments that support their health and other commitments. They will also have longer to save for retirement, helping their saving go farther and giving them time to reach more personal goals.

Your company will also benefit as you can keep those talent gaps filled longer. During that time, you can tap into their knowledge, prepare new talent for those roles, and create a smoother transition for new managers.

Creating a benefits and rewards package that will attract and retain your older workers begins with knowledge of what they need most at their stage of life.

Mercer offers comprehensive reports and data that cover what those in your industry are looking for in their roles.

Contact us at surveys@mercer.com or 855-286-5302 to learn what resources we have to help you set up a gradual retirement plan.