The End of the Employee Life Cycle, Part 2 - Retirement

Rachael Wilterdink > Communication > The End of the Employee Life Cycle, Part 2 – Retirement

in Part 2 of the ways the Employee Life Cycle can end, I tackle retirement. In addition to resigning, another way to depart an organization is to retire. During my more than 20+ year career, I have only known a few colleagues who retired because they felt financially safe and comfortable. Before deciding, you need to consider whether you even want to retire or if you can (or can’t) afford to.

Why someone might not want to retire

Ah, the golden years. The part of the Game of Life in which you comfortably kick back and relax in your Millionaire Mansion… uh, yeah – maybe not so much.

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Fear of Investment Volatility

In today’s market, I’m seeing older employees stick around because they fear the volatility of their retirement investments, and they don’t want to risk not having enough money to retire. The stock market is on a wild ride right now with inflation and the unpredictability of the economy and foreign activities. If you want to outlive your money, you need a minimum set of funds and a sound investment strategy. Without a comfortable nest egg that can weather the peaks and valleys of investing, you may not be ready to pull the trigger yet.

Threat of boredom

Another reason for delaying retirement is anticipated boredom or having a lack of purpose without meaningful work. I have known countless retirees who came out of retirement merely for this reason. Having a job means you have a reason to wake up every day, and without one, you may meander through life without direction. I don’t think I’ll ever entirely retire – I’ll always want to do something productive.

Future age discrimination

an elderly woman looking at her smartphone

If someone decides to retire but later discovers that their plan won’t sustain them through the rest of their life, they might decide to try and re-enter the job market. However, ageism is still a thing (although often ignored). Older workers who need to continue working during their retirement years may have a much harder time returning to gainful employment.

Death before retirement

I have also been at companies when people died before retiring, and that’s a real tragedy. In one instance, the gentleman was in the middle of running a 5k race for his company, and he dropped dead of a heart attack. His death wasn’t expected, and medical help was too far away because it was a small town. Another time, I watched people suffer through long battles with horrible diseases like cancer, only to continue working while undergoing treatment because they couldn’t afford not to. In the end, many succumbed to their illnesses anyway, without ever getting a take a break to enjoy life. I don’t want to work until I die – I want to have a little fun before then.

Why you do want employees to retire

When older employees decide to retire, sometimes it can be advantageous, both to you and the employee. Here are a few reasons you might want your seasoned employees to call it quits.

Ability to get younger talent at a lower cost

When someone retires from a company, they are at a point in their career where they are probably highly compensated. If a high-paid employee leaves the organization, you can often snag young, green candidates who will accept a fraction of what the previous person made. But this is a catch 22 – you lose a lot of knowledge when someone leaves, and it takes a long time to rebuild that in someone new.

Reward people for their long years of service

close up shot of a gold medal on a black surface

If an employee, who has worked at your company for many years, decides to retire, you ought to wish them well. Loyal people are in short supply, and if the employee has any tenure at your organization, your success is mainly due to the people who work there. It’s rewarding to see someone graduate from being a working stiff to being a retiree, and it gives hope to those of us who see retirement as a distant (and almost unattainable) dream.

Planned succession

Successful organizations have succession plans for their leaders. Just because someone started a company doesn’t mean they’re the right person to grow it to the next level. Sometimes, people decide to leave, and there is a huge gap where that person was; they’re hard to replace. It is essential to train the next level of corporate leadership at your company, so there’s a smooth transition (usually over several years) before a leader retires. Planned exits should be communicated along the way to give employees higher confidence in the new leader.

People deserve to be able to relax and enjoy their golden years

I believe that people should have a little bit of fun before they die. After working hard for a lifetime, every person deserves to take a break, breathe, relax, and soak up life’s little pleasures. Many people save experiences such as travel until they retire, but the lessons you could learn from your travels may no longer be applicable by that time in your life. Rather than sapping every last drop of energy from your employees, please encourage them to retire when they are ready, so they can have a chance to enjoy their final years.

man and woman sitting on brown wooden bench

Why you don’t want your employees to retire

Sometimes, it’s better to try and keep people who express a desire to retire. If you haven’t carefully planned succession, you may want to hold onto folks until their knowledge can be successfully transferred to someone else.

Loss of valuable institutional knowledge

a elderly man drinking on a ceramic cup while reading a document

Well, people who have been around for a while tend to have a lot of organizational knowledge that’s hard to replace. Knowledge is tacit and takes time to transfer between people. You can’t just drop a new person into a role with no experience or context and expect them to succeed. Keeping your seasoned employees longer may help ease this transition.

Skill and experience

If someone has stayed at your company for a long time, they’re probably quite skilled at their job and have a ton of experience built up over the years. While you can teach skills, it doesn’t mean they will be performed as well by someone new versus someone who has been doing the same thing for their whole career.

Loyalty

People who have long tenure with your organization also display that the employee was satisfied enough to stay with the company for that length of time. Tenure is a strong indicator of loyalty and people want to work where they know they will be happy and appreciated.

Cost of acquiring replacement employees

It’s super expensive to find and hire replacement employees – from advertising, recruiting costs, hiring bonuses, interviews, etc. Most companies recognize this and will do whatever they can to keep people employed for as long as possible to avoid spending the money to find new candidates

Final Thoughts

When it comes to ending the Employee Life Cycle, retirement is a nice way for some people to move into the next phase of their lives. However, not everyone may be ready to move on when you expect them to. There may be advantages to losing an employee to retirement, or there could be negative consequences. Whatever happens, handle the situation with grace.

There’s only one more blog left in this series, and it’s the third part of this sub-series. In conclusion, I cover the last way to end your relationship with an employee – removing them. This isn’t usually a pleasant thing to do, but sometimes it’s necessary, so check back soon to read the final chapter of this blog series.

If you missed any of the previous blogs, here’s your chance to check them out:

How to Understand the Employee Life Cycle: