There is an increase in people delaying retirement or ‘unretiring’. Unretirement is the phenomenon of taking up the reins again after a short period of stopping work. Early this year, Peloton hired a retired CEO, Howard Schultz returned to Starbucks and football star Tom Brady rejoined the NFL just 40 days after resigning. The main reason they all gave for returning? To help drive their organisation to greater heights. The cost of living crisis is another reason cited for working longer, with many unable to afford normal retirement. One in five British people who took part in a 3000-person poll said they expected to delay their retirement as a result of rising prices. Post pandemic, some retirees have realised they can work flexibly from home for companies desperate to fill labour shortages. Extended working lives are in part made possible because people today are generally healthier than generations past. It is not uncommon to have fully-functional individuals in their eighties.
Why is it important?
Businesses may find they now have four different generations in their workforce, all with differing needs. This could be advantageous as older people can transfer valuable skills to younger employees. However, there could also be a slowdown of newer employees entering companies which could result in a drop in new ideas. New employees tend to bring with them a fresh perspective on the business and are able to identify blindspots. This is extremely valuable for keeping an organisation relevant. With later retirement, pension contributions to employees will be extended, but this should be balanced by the costs of recruiting and training new employees.
What can businesses do about it?
Businesses can work towards understanding what employees of different generations need in order to perform their work effectively. They should value their senior employees, the boomer generation, and recognise the contribution they make to the organisation. Can an employee be forced to retire? This depends on whether the employment contract includes an official retirement age. If the contract doesn’t specify a retirement age, the employer and employee need to discuss and reach an agreement about the retirement age or date and this should be confirmed in writing. When it comes to employees’ retirement, South African labour legislation does not make provision for a retirement age, however a company wide retirement policy is advisable to avoid disputes.
By Faeeza Khan
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