If you have employees – and they stick around long enough – the day will come that retirement knocks. In some cases, you may jump for joy! For the most part though, it will likely mean significant knowledge exiting your organization. The same can be said for employees who leave your organization prior to retiring; however, we’ll keep the focus on those “pensioning out”. And if you have employees retiring from your organization, you must be doing something right – otherwise, no one would be around long enough for this to actually occur.
Ideally, staff members will give ample notice prior to retiring. Having a provision in your employee handbook to this effect is important. For example, your handbook could state that staff are to give at least three months’ notice prior to retiring. That said, nothing prohibits an employee from giving far less notice; the lengthy notice period is a courtesy. One way to entice an extended notice period would be by providing an incentive. An example would be that if three or more months’ notice is provided upon deciding to retire, that a cash bonus of $500 will be paid out on the employee’s final cheque. Depending on the position, the notice period can be of significance, as it will allow time to recruit into the position and provide for proper knowledge transfer. This is a luxury that you likely won’t have when an employee is resigning to take a position with another organization. From an employee’s perspective, there is an advantage to providing as much notice as possible, as it allows the necessary administrative time for such items as pension plan/RRSP administration and health benefit transition, to ensure no disruptions.
Pension plans/group RRSP contributions are typically a significant part of an organization’s total rewards package. These benefits both attract and assist in the retention of employees. One benefit that likely isn’t as common is financial planning assistance – either fully funded by the organization or offered at a subsidized rate – that would assist employees in preparing for retirement. This type of benefit is great from the perspective of looking after the overall life cycle of the employee.
As with all employees that work – or have worked – for your organization, those that retire are ambassadors from a marketing/public relations perspective. If they had a positive experience working for your organization, they’ll tell people about it. Of course, the opposite is true for those who have a less than desirable experience working for your company (although these folks likely won’t stay around long enough to retire). Just another reason why employee engagement is so important!
The next blog post will be a continuation of this topic, where we’ll take a look into succession planning.
On a personal note, this post has been inspired by my Mom, who is retiring this month from her job after 22 plus years. Congrats Mom – well deserved!