Say "retirement planning," and most of us think about savings and pensions. But there's another very important angle to this issue, and that's the impact on your company when a key person retires. Regardless of how formal you make the process, the continuity of your company's performance depends on preparing for the retirement of key personnel. Keep these points in mind:
- Have a clear understanding with key managers about when retirement is likely to take place. You need to create an environment where retirement is a continual part of the dialog, where you recognize that this is a natural occurrence, and where you can have discussions that are frank and in the best interests of the company as well as of the individual. Make it clear that your goal is not to force people out but rather to prepare for the inevitable in a positive, productive way.
- Identify potential successors. Know who within your organization has the potential to fill the retiring person's position. Begin grooming those individuals so that an actual successor is easy to select when the time comes.
- Evaluate whether or not the job will change, and if so, why and how. Consider industry trends, your own growth strategy, and other issues that may affect the job and how it is performed. With that in mind, you can develop a plan to prepare potential successors to be ready to take over the job when the time comes.
- Offer support for people approaching retirement to help them make the transition. Such support might include financial counseling or even other types of counseling to make it easier to adjust to the lifestyle change. If appropriate and beneficial, you may also want to retain them in a consultant status for a period of time after they leave.
- Notify customers who will be affected well in advance so they have plenty of time to adjust to a new contact person.
Of course, some retirements take place unexpectedly with little notice, such as when an illness or other circumstances drive a retirement decision. Deal with that just as you have to deal with other surprises. But in the normal course of business, a retirement should be something that is planned well in advance, both for the benefit of the individual and the company.
When you have a clear understanding with key managers about their retirement plans, you've got time to prepare your company. You should be talking about this at least two or three years in advance of the target retirement date. It's an important, prudent step in being a well-managed company.
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