Retaining older employees in the workforce
A study find Hong Kong employees see an increased need to do so.
A study finds that Hong Kong employers are seeing an increased business need to retain older employees in the workforce. The study called 2022 Older Age Workforce Study by Aon, a professional services firm, revealed 44 percent see this need and expect this to be the key focus in the next five years.
The study, a first of its kind in the country, focuses on critical human resources practices and employee benefit and retirement plan data to help organisations create a compelling benefit package for older workers and differentiate themselves from the competition to tackle the increasing talent shortage. One hundred and forty-four companies took part in the study.
The study also found that among employers that have increased or are considering to increase the retirement age, the majority (56 percent) cited the need to retain employees’ experience in their Hong Kong workforce and are monitoring public sector retirement age trends. In Hong Kong, there is no statutory retirement age and this provides older workers to work longer but does not compel them to do so.
Ashley Palmer, regional managing partner and head of Wealth Solutions, Asia Pacific at Aon, said, “Aon’s study finds Hong Kong is in the midst of a talent crunch, with the reported size of the labour force having dropped to the lowest level in a decade given net emigration and continuing restrictions in the wake of the COVID-19 pandemic.
“Organisations need to be more proactive in retaining and engaging the talent they already have. Investing in specifically designed employee benefits with flexible retirement options and financial wellbeing support demonstrate that organisations value more experienced talent. Employers with an effective older workforce strategy are able to drive agile succession planning, retain key skills, and provide a soft-exit through flexible retirement options. These are all critical to further accelerating talent pipelines and organisational people objectives, such as to increase diversity and gender representation in leadership roles.”
The survey also found 34 percent of Hong Kong employers are providing employees with additional support around retirement options and financial well-being. In addition, 17 percent of employers demonstrate their appreciation to retiring employees by providing an ex-gratia “golden handshake,” which can include a cash bonus, gold, gift coupons and celebratory meals.
Added Stella Ho, Aon’s head of Wealth Solutions, Hong Kong, said, “The long-term success of an organisation is underpinned by its investment in driving a more flexible, engaged and resilient workforce. The results of the study highlight that employers need to increase focus on communication and ensure sufficient working/retirement flexibilities within competitive employee benefit and retirement practices to optimise their older talent.
“Business leaders typically underestimate employees’ need for well-being support, especially for retirement and financial well-being. Financial stress is not based on income or age, but is closely linked to mental health, and in times of increasing costs of living, supporting employees to make better financial decisions has never been more important to drive workforce resilience and productivity.”
The study also found that 57 percent of employers allow employees to work beyond the retirement age on mutual agreement. The Aon also shared that most of the employer participants or 83 percent are not sure or are not aware if their contractual retirement age or CRA has ever been reviewed for Hong Kong employees. Also only nine percent of participants in the study have increased their CRA in the last five years or more. This suggests that employers have not been actively reviewing their CRA, possibly in part due to other human resource priorities over the pandemic in recent years.
The study noted, “Reviewing CRA can reduce need for temporary contracts and reduce the administration burden on HR resources. It can also give employees more certainty over their employment duration and greater ability to plan ahead.”
(** PHOTO CREDIT: Joseph Chan/Unsplash)