Mind the gap! Employers encouraged to face reality and manage retirement expectations
by Dianne Bown-Wilson
The time has come for employers and recruitment advisors to start taking responsibility for managing the growing ‘expectation gap’ that exists between employees’ hopes and wishes about retirement and likely reality. Evidence suggests that amongst all age groups bar immediate pre-retirees, there is a significant and disturbing discrepancy between employees’ monetary, lifestyle and timing aspirations and financial and demographic statistics that show that the majority are going to have to work longer than ever, before eventually retiring on inadequate pensions.
For example, recent research undertaken by performance improvement specialists pandmm and Pareto Law into the ambitions of graduate job starters in the UK, has shown that 52% say they expect to retire between the ages of 51 and 60. However, this flies in the face of demographic and financial forecasts that show that there is:
- A rising average age for the population
- An increase in the absolute number of older people
- A rise in the proportion of the population who are older
- A lower birth rate than in previous years
- Insufficient pensions provision for the majority of the workforce.
These trends are expected to intensify dramatically throughout the coming decades.
However it is still the case that for the majority of employees in the UK working life can be compared to a marathon. The challenge and excitement are experienced in the early to mid part of the ‘race’; towards the end it becomes increasingly an endurance test to stay the course, cross the finishing line and collapse into retirement as soon as possible. The ‘finish’ - representing a time and state in which work has stopped - becomes an end in itself, with little real thought or planning given to what will happen in retirement once the initial ‘honeymoon period’ is over.
The problem now is that employees who are entering the workplace or are in the early to mid-stages of working life seem oblivious to the fact that the duration of that race is changing and they are almost certainly facing a much longer working life than they realise. In itself this is by no means bad news; it has long been acknowledged by professional advisers – and confirmed by older people themselves - that work is a positive force for good in terms of self-esteem, identity, self-fulfilment and general physical and mental health.
However, the key to happy and effective working over a longer term is to ensure that workers have realistic expectations from an early age. They need to be encouraged to continue to develop past middle age and find new challenges and ways of contributing in the workplace as they enter their fifties, sixties and seventies. Key to this, as people do not leave work one day as ‘young’ and come back as ‘old’ the next, workers should no longer have to face a situation where they are employees one day and pensioners the next.
In future, caring and responsible employers and recruiters should aim for a situation where ‘retirement’ is a gradual and relatively seamless process, individual in its nature and reflecting the specific needs of both the business and the employee. Most important they should challenge and support employees throughout the entire duration of their working lives to create a sustainable work-life balance situation, to ensure they have the knowledge required to make adequate financial provision for the future, and to help them create challenging goals around which to sustain ongoing engagement and satisfaction.
Demographic predictions are not in themselves bad news. The future can be bright – but only if employers and recruiters ensure that it doesn’t involve surreptitiously moving the goalposts.