Depending on the country or state that they live in, everyone has an age at which they are legally allowed to retire. However, there are also cases when people tend to retire early – or later than they were supposed to.
Still, considering that every company needs to have a plan, you also need to know when exactly your men (or women) of the business are about to retire. This is exactly what this metric intends to do: to tell you the average age of the people who have retired over the past year.
How to Use the Average Retirement Age Metric
When a business is growing, you have to know precisely what is happening in its midst. The average retirement age metric, for example, will show you precisely the development of a long-term trend – letting you know whether or not the trends are decreasing or increasing over certain cycles.
Having this in mind, the Average Retirement Metric is a fairly useful tool that will tell you precisely when your employees will start retiring – and at what rate they will be doing so.
For instance, if the average retirement age starts speeding up and reducing its cycle, then you might also want to step on the acceleration with the succession planning. You don’t want the knowledge and experience to be lost – which is why you ought to know when it is time to bring interns or people with the necessary experience.
The average retirement age is fairly easy to calculate. You ought to sum the age of all employees who are retiring – and then divide it by the number of people who are planning to retire (the same people that you have made a sum of). The result will be the average age at which your workers will retire – and which will tell you exactly when it is time to replenish the workforce.
In the public sector and in work environments that revolve around employers and pension plans, the average retirement age seems to be lower. For example, with the traditional age retirement of 65, people tend to retire one or two years early.
On the other hand, people who are self-employed tend to work way past their retirement age – in an attempt to gather more money. Around 6/10 people nearing retirement believe they will be retiring at the planned age – with the others waiting until their retirement plan comes to “fruition.”
In itself, the Average Retirement Rate can be used to develop a long-term strategy for your company. However, in order for it to be efficient, you ought to use it as a combo with other metrics as well – including the following:
- Average age
- Retirement rate
- External time to fill
- Vacancy rate
On a final note, knowing the average retirement age can help you make a long-term plan regarding your company. If you know exactly when your workers are expected to retire, you will know that you have to bring more employees to replace the previous ones.