When Are Employees Likely to Retire?

As the worldwide labor force is growing older, it’s important for leaders to retain talented and experienced older employees and know what factors are at play that will impact an employee’s decision to retire. And new research sponsored by Fisher Leadership Initiative is looking exactly at that.

We took data from 754,856 employees aged 50 and over from 360 U.S. government agencies participating in the Federal Employee Viewpoint Survey from 2006 to 2015. We wanted to see how high-involvement work practices — which represent an employee-centered human resources management  (HRM) system that provides employees with skills, information, motivation and latitude to work — impacted when an employee was likely to retire.

What we found was that the more high-involvement work practices (e.g., job autonomy, participation in decision making, information sharing, training opportunity, and compensation and benefits) an employee experienced, the later they were likely to retire.

This relationship was especially strong for older men workers, older workers aged 50–59 years, older workers without a bachelor's degree, and non-managerial older workers than for older women workers, those aged 60 years or over, those with a bachelor's degree and those with managerial responsibilities, respectively.


This is because older workers who are male, relatively younger, have no bachelor’s degree or managerial responsibilities may need the high-quality jobs defined by those HRM practices more than their counterparts.  We also found that this pattern has become sharper since the Great Recession of 2008 probably because older employees experience more financial pressure and uncertainty surrounding their retirement plans.

So, what does this mean as it relates to practical advice for leaders?

We want to share two aspects:

First, leaders can offer high-involvement work practices to meet the work needs of older employees and thus retain them at work for a longer time.

Second, as one size does not fit all, leaders also need to consider older employees’ individual characteristics and environmental factors to maximize the effects of HRM practices.


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