Rapid Change and Prolonged Employment

The volatility of the past year has resulted in a temproarily frozen workforce. Those that have jobs are focused on maintaining them; those without remain largely shut out. Several recent studies I have been involved in all point in the same direction, although from differing perspectives.

The well reported impression that the boomer generation will now be working longer in order to recoup investment/retirement savings losses isn't really the news. Rather in the absence of tools to encourage movement of workers into new roles or into retirement there is little room for adequate internal organizational change to promote innovation and fresh ideas. Tools also need to provide for managed retention capabilities to avoid unplanned departures.

The demise of Defined Benefit plans has left workers and executives to rely primarily on their own savings or equity in the business enterprise - retirement income sources that have been uniformly flattened by the market downturn. The increased public scrutiny and government intervention combined with the need for retirement savings vehicle replacements will drive new approaches to wealth creation for the near term.

New wealth creation vehicles are likely to be less transparent supplemental retirement plans or external market offerings in the form of savings or dividend appreciation plans. As an example I recently had the opportunity to work with a mutual benefit insurer of physicians providing rebate credits into a fund with long-term wealth accumulation capabilities.

Top performers who are frequently the ones left standing after several previous rounds of reductions in force are increasingly losing their engagement with and loyalty to their employers. For employers the challenge will be to find vehicles that promote job flexibility combined with organizational affiliation as the employment markets slowly begin to expand. Merely providing compensation will not be sufficient. Organizational affiliation will be needed to avoid excessive turnover while phased retirement and other forms of job flexibility will be needed to promote proper workforce management.