A fresh approach to offboarding a generation of insurance professionals

For years now, the workforce has been inching toward a historic wave of retirement. From 2024 through 2027, more Americans will turn 65 years old than at any point in our country’s history. About 50% of the insurance industry workforce is in line to retire by 2028, and all of the baby boomers will be past the traditional retirement age by 2030.  Many of these professionals are already planning their exit strategy.

We often imagine retirement as a long vacation from the drudgery of work, but, in truth, most of us derive satisfaction and happiness from our work. If we suddenly go cold turkey, we may begin to feel adrift.

I saw this firsthand a few years ago when one of our long-time employees retired. Just two weeks after leaving, he contacted me for advice because he was missing work, and it was negatively affecting his health and demeanor.

The coming retirement collapse is more than just a personal problem, too. Companies are facing tough choices with how they might overcome the catastrophic loss of years of knowledge and experience.

With all of this in mind, I knew there had to be a better retirement process than the traditional way of cutting ties. To that end, we created Retirement Journeys, which are a personalized pathway for transitioning out of work that are developed with each individual.

For the employees, Retirement Journeys help them transition to a new challenge. For the company, they are vital to ensuring we don’t lose the knowledge that has helped anchor our business.

Here are three concepts that helped us start this process and keep us on the right path.

Start with a safe culture

Retirement Journeys begin with extended conversations and detailed plans, which we start when our people begin to consider retirement. Establishing a safe culture where people feel free to discuss the subject is critical to this process.

A person nearing retirement must feel like they can approach their manager to discuss options. If they worry that merely mentioning it might get them fired, then you forfeit any possible collaboration that can help both the employee and the company.

At the same time, creating a plan together with your retiring employees is a guarantee that the person has a voice and presence in the process. This gives them a channel to understand how they can share the institutional wisdom that they have accumulated over their career.

Unless your people feel welcome to share their thoughts and hopes about their future at work, they won’t bring up the subject of retirement until the very end, and then it will be too late. That culture of safety has to exist within your organization upfront or the Journey will never take its first step.

Let the employee guide the way 

Once your employee has decided to retire, the next step is to start brainstorming possible pathways with them. I suggest giving them time and space to consider on their own how they might begin working in a different role, working a different schedule or a different setup.

From the company’s perspective, your hope is to preserve all the amazing knowledge your employee has gathered. Usually, they know their role and their part of the business so well that they have really good ideas about how to start offboarding some of their responsibilities and some of their schedules.

I’ve now been able to create a variety of plans with people. One particular individual started by decreasing his working schedule to four days a week, and we adjusted his salary by 20%. He still had the same type of work and engagement but with a three-day weekend every week.

We got to glean his knowledge and input a while longer, and that one day of work was easily absorbed within the organization because we weren’t losing an entire role at once. Spread out over several people, it wasn’t nearly as impactful as it would have been simply losing the person and all of his knowledge at once.

Engage the whole team

The Retirement Journey helps more than just the employee in question. It’s also an opportunity for new people to step into roles and learn new skills and for the company to spot places where it can automate systems or processes. Best of all, the person whose absence is creating those openings can help oversee it all and ensure the transition is seamless.

In the case of our retiring individual, he first went to four days a week, then three days a week, then to an on-call basis and has now officially retired. But, he is not out of the loop forever — we invited him to attend our customer summit with his old team last fall, which included some educational sessions and mingling opportunities.

Everyone likes working with companies that treat their employees well, so it was very positive for customers to see our retired employee still passionate and involved with the company. He spent time interacting, advising and encouraging confidence that our products were the right solution for our customers.

For a different employee, it worked better for her to shift her status from full-time to a 1099 contractor. She worked in that fashion for about four months, and, of course, we were able to benefit from her wisdom and experience until she was ready to permanently retire. That also gave us the runway to figure out whether we wanted to hire someone to step into her shoes or adjust responsibilities among the existing team.

Ultimately, neither the employee nor the company does well when forced to go cold turkey.

The traditional working, experience and knowledge challenges of retirement are unnecessary burdens on both employees and companies. Creating Retirement Journeys is a better way to help guide your people into a new phase of their lives.

By beginning with a safe culture, working together on a transition plan and engaging the rest of the team, a company can better prepare for a streamlined transition and bridging any knowledge gaps that arise.

Related: 

• Reinventing retirement in the insurance industry
• Help! I’m 65 and want to sell my insurance agency
• NCCI President, CEO Donnell to Retire in 2025

Alicia Garcia is chief people and culture officer at MasterControl.