Employers are reviewing their policies of managing older workers, trying to take advantage of employees' knowledge and experience while worrying about potentially higher costs — for benefits and pay — of retaining them, according a survey published Thursday by Willis Towers Watson.
"There's a very compelling business interest" for companies to capitalize on older workers' skills while managing the costs, said Alan Glickstein, managing director for retirement, in an interview. Willis Towers Watson conducted this first-time survey due to the "increasing significance" of addressing these issues, Mr. Glickstein said.
Among employers' concerns, the survey said 49% of employers worried that workers' delaying retirement will raise benefit costs over the next five years. Also, during this period, 41% said delayed retirements would force up overall wage and salary expenses. In addition, 37% feared younger employees would be blocked from promotion if too many older workers stay on the job.
At the same time, 80% of employers said older workers are "crucial" to the company's success, the survey said. Fifty percent said they were worried they would have trouble finding workers "with similar knowledge and skills" over the next five years, while 48% worry about "the loss of organization-specific knowledge," the survey said.
And 54% said the loss of older workers to retirement "will be more significant than other labor market risks over the next five years," the survey said.
The survey, which was conducted in August, was based on responses from executives at 143 large U.S. employers with an aggregate of 2.9 million workers. Although 53% of respondents said they had a good understanding of when employees will retire, 25% said they "effectively manage the pace and timing of employee retirements."
Among actions taken by employers, the survey found that:
• 66% offer retirement planning or financial well-being programs aimed at workers approaching retirement, and another 19% said they would offer these programs within the next two years.
• 27% allow older full-time workers to switch to part-time jobs, a practice that will increase by 2020.
• 49% allow retired employees to work as consultants or contingent workers, a practice that could increase by 10% by 2020.
• 9% offer a formal phased retirement program, which could grow to 23% by 2020. Other employers have informal phased retirement practices.