Turning the Great Retirement on Its Head: Look to Hire the Retired
One of the biggest challenges for independent agency owners today is recruiting and retaining talent. A variety of surveys taken pre-pandemic indicated that most of the industry workforce would be age-eligible for retirement within this decade.
Over the last several years as I’ve spoken to agency principals across the spectrum, it’s clear that the problem is getting more acute. Now, post-pandemic, the so-called “great retirement” is creating real stress in many agencies. While long-term solutions remain elusive, an immediate solution is right in front of us.
Re-engage the ready-to-retire and rehire the retired.
But before we explore strategies to do that, let’s consider why it’s a good idea.
For one, older workers have a great deal of hard-to-find (in new workers) knowledge. This may be obvious, but I think it’s often overlooked and sometimes undervalued. So, to put a price on it, consider how long it takes to “validate” a producer. Typically, it takes three years and success rates can be low. Part of that time is simply spent with the employee acquiring knowledge.
Meanwhile, the cost to the agency for that is easily in the six figures. A highly knowledgeable commercial lines CSR similarly takes three-to-five years to become reasonably productive and the salary and training expenses for that also easily represent six figures.
Also, older workers have an intangible attribute that younger employees cannot match — wisdom. This wisdom can translate into more creative or tailored risk solutions in difficult markets, anticipation of problems and appropriate solutions and other valuable considerations. This wisdom is acquired through experience. If you allocate a part of employment cost to this experience acquisition over 30 or more years, it’s easy to see how valuable it is.
Because these older workers are so valuable, and even more so due to the current supply and demand imbalance, it’s worth considering how to hang on to them a bit longer. The first thing to do is to understand why they’re quitting.
Reasons Why Older Workers Quit
Most people I speak to who are preparing to retire tell me the number one reason is they are “tired of putting up” with something. The something varies. In these conversations, I often ask the question “if you could eliminate the thing(s) you are tired of, would you still want to retire?” and often the answer is “no.” The solution for managers here is obvious. Ask that question and identify ways to eliminate the problem. Often that solution can be as simple as job reinvention. Perhaps the older worker focuses on the higher-order work where experience counts the most, while the younger people take on the other tasks as they earn their own wisdom.
The second-most common reason I hear is a desire for more freedom. This often comes in expressions of desire to travel, spend more time with grandchildren and similar things. When I drill down into this objection, the real issue for many is that their current job doesn’t offer flexibility.
The older worker has the same work hours and vacation or personal time off opportunities as younger employees. When asked if they would like to continue to work either part time or with more flexibility, many near retirees tell me they’d love that opportunity.
Less frequently than the first two answers, I hear a desire to move to a different community to be closer to family or to experience a different way of life. When I follow up with the question “if you could continue working for your employer part time, or even full time, from wherever you’d like to settle, would you want to do that?” I often hear an enthusiastic “yes.”
Reengaging the Ready-for-Retirement
The word retirement in general means to “be put out of use.” It’s clear to me that many people who choose to leave the workforce don’t really want to be “useless,” they just want to be productive in a different way. And that is where the opportunity for agency owners lies.
They need to ask what their current, and prospective, older workers want and then provide it. Fortunately, meeting many of these requests has never been easier.
The COVID-19 era has led many workers to reflect on why they don’t like their jobs — why they no longer want to put up with the things, places or time necessary to work in their current jobs. At the same time, it has also created and accelerated the adoption of many tools and management strategies that make redefining work for this valuable, experienced and wise cohort possible.
Clearly, remote work is possible and effective. The experimentation with continued work-from-home flexibility is ongoing in agencies and the obvious solution to having workers relocate using work-from-home technologies is clear. Not only can current employees easily relocate, but agencies can hire experienced and otherwise ready-for-retirement employees regardless of their geographic location.
This management flexibility that COVID forced can be expanded. We recognize that the number of hours worked per week does not necessarily correlate with employee value. Schools closed, parents took over education responsibilities, employees cut working hours for family care, and as employers we came to see that was okay. For many agency tasks, the where and when these tasks were completed were less important than we originally thought. Extending this management strategy to older workers allows for part-time, even episodic, work where employees might only work part of the year, freeing them to pursue the things that heretofore forced them into retirement.
This flexibility of time can also allow older workers to do the things they want to do like spend time with family, care for family members, hobbies and so on — while they continue to work.
Redefining the Work, Rewarding the Employee
COVID has also forced many businesses to reexamine the work that various employees need to do to make the business run properly. If agency owners embrace this creativity and flexibility to redefine jobs, they may find older workers eager to remain working or return to work. They simply need to redefine the job in a way that addresses the things the employee was “tired of putting up with.”
Job sharing, work reorganization or hiring other employees who enjoy those tasks are all effective strategies to help redefine positions.
Another strategy that can be used in combination with those already mentioned is rewarding older employees with greater compensation. It’s clear that the experience and wisdom discussed earlier often translate to greater effectiveness and productivity. Why not analyze that in a given business and then create pay programs that reward it? Doing so holds the promise of maintaining the agency’s capability to get the needed work completed while increasing job flexibility and remunerative incentive to continue working.
Retaining or recruiting older workers isn’t the only solution to the talent crisis. But it does hold the promise of solving part of it for agencies that are willing to think differently and engage in and promote a different, and I think better, kind of teamwork. That teamwork and improved engagement can begin by asking older employees what they want. With those answers in hand, it’s not difficult to redefine agency operations in a way that benefits everyone.
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