Nearly half (49%) of all tech workers plan to retire early, which is set to cause disruption as senior talent could leave the workforce en masse. This is far more than the average across the UK (35%), with more tech workers planning to leave before state pension age than those working in finance, professional services or sales.
Feeling that “they won’t be wanted in the workforce when older” is the key driver behind tech workers’ accelerated retirement plans.
Of those planning to retire early, eight in ten (78%) cited this as their motivation, with the remaining 12% expecting to retire early because they are worried about age discrimination in the sector: (83%) of tech employees report feeling this pressure, compared to 75% of typical workers across all sectors in the UK; and 36% of employees in the sector say this pressure is ‘significant’, while only 14% say they don’t feel any pressure.
This will exacerbate the current talent shortage in the IT and technology sector as the baby-boomer generation nears retirement.
A recent report by Ros Altmann, the pensions minister, suggests that by 2022 the number of people in the workforce aged between 50 and state pension age will have risen by 3.7 million to 13.8 million and the number aged 16-49 will have reduced by 700,000.
As these older, and often more senior, workers reach state pension age and exit the workforce, their departure will worsen the current severe skills shortage – which is already holding back the technology sector.
Employers need to allow their more senior staff to have flexible working hours to help them fit their career around potential pressures like caring for a loved ones and health issues if they want to improve the retention of older workers. This was the most important factor for 43% of workers in the sector.
Another major change that could help persuade tech workers to stay in the sector was a change of role for older workers to become mentors to more junior staff, allowing them to share their experience (41%). Younger employees could also see the benefits of having guidance from older staff.
Introducing retraining schemes so that older workers can learn to use the latest technology will also be important in persuading older staff to stay in the sector, with 34% saying it would be the best change employers could implement. This was a more important factor for other tech staff than the rest of the UK, where the average was 28%. This shows the importance of understanding the latest developments in such a rapidly changing industry.