Where Have the Over 50’s Gone? – 3 ways to attract early retirees back

Where Have the Over 50’s Gone? – 3 ways to attract early retirees back

We often refer to the skills shortage across the Transport & Infrastructure sectors, but when it comes to tackling the shortages, immediate strategies are often around training up apprentices and bringing in a new wave of talent.

But the reality is, our sectors are made up of highly talented, highly experienced “older workers” (as the UK government now officially refers to this group). And they are leaving in their droves.

The number of people in their fifties and sixties that have left employment has increased by more than 250,000 since the start of the pandemic, and more than half of the increase is attributable to early retirement. In 2021, only 11% of 50- to 69-year-olds leaving work could be explained by redundancies or dismissals, with redundancy rates falling compared with 2020.

There are a combination of factors that have influenced this mass exodus from the market of over 50’s.

  1. A significant proportion of experienced professionals within the market have built up a very sizeable pension and have the financial independence to retire early if they wish. Add to this the fact that the Pension Lifetime Allowance was reduced in 2016, has meant for some people it is not tax efficient to continue paying into a pension pot for another 5-10 years.
  2. House prices for this demographic have soared since they started on the property ladder.
  3. And, of course, no comment on current affairs can pass without adding the pandemic in to the mix. COVID-19 really altered people’s outlook and approach to their work and has made some think hard about whether they wish to continue working.

A lot of people saw what life would be like if they spent more time away from the office. So, if you’re sitting on a comfortable pension pot and you’re financially secure – why return to life in the fast lane?

We frequently see on our searches, that highly specialised senior individuals tend to fall into the 50 and above category. Particularly when it comes to construction. Tunnelling for example is an area that, due to timings of major projects in the UK, many of those with the best experience are close to retirement age.

While it goes without saying that we need to develop the pipeline of talent going forwards, one way we can immediately make a big difference to the lack of available talent is by attracting this demographic back into the workplace.

Understandably, this is no easy task. How do you attract and retain people who are financially independent? This sector of the market will have entirely different motivators and need to be considered in a totally different way to the wider talent pool.

1. Provide Alternatives to the pension benefit

A lot of companies do not offer a cash allowance in lieu of pension contribution. Therefore, once someone maxes out their Lifetime Allowance, they lose their pension contribution value to their overall package.

In order to retain people hitting this milestone, it is important to offer an alternative benefit, or to pay this amount in cash in order to incentivise them to continue in employment.

This may seem obvious, but for a lot of companies, this hasn’t been an issue until recently and so hasn’t been something they have had to consider until the LTA was decreased.

2. An Engaging Workplace

If the work environment and company culture are stressful and unappealing, you need to undertake a lengthy commute 5 days a week and you’re working 12-hour days, then where is the incentive to carry on working?

If you take out any financial incentive to work each day, it is understandable why many over 50’s are choosing early retirement.

Consider everyone’s values and motivations and weave them into the company culture and environment.

3. Meaningful work

Consider what roles you are offering. From speaking with candidates, we know that as people start to reach the latter stage their careers they want to focus on a different type of work. Experienced employers often want opportunities to pass on their knowledge and make a meaningful contribution to their industry.

There may be more of a shift towards advisory roles across multiple work streams where experience can be passed on to others within the organisation rather than direct line management of 500 people.

We often talk to people who want more influence on how the industry operates. They want to make a difference to the future of the sector rather than managing the day to day operations.

Obviously, this is a big generalisation of a large group of people. Not everyone’s situations will be the same. That’s why it is so important to keep an open dialogue at every level of the organisation and ensure that you are keeping every level motivated. It is easy to assume that money is an important motivator.

If you’re feeling the skills squeeze and struggling to place people into your senior positions, then you may find it beneficial to carry out a talent map of the market.

Our talent mapping service provides you with a detailed examination of who is in the market and where they are before you commit to a full executive search.

Get in touch to find out more information.

Author: Jim Newsom

Jim Newsom

Managing Director